Letters to the Editor
Across the River
Published Letters: 1 Editor's Choice: 1
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Liquidity injections
[Read the article: Stronger government equals more freedom]
[Read more letters about this article: Here]Please remember that injecting liquidity does not mean a subsidy or a gift has been made to the financial institutions. The Fed is buying securities (typically ones that have the full faith and credit of the US Government behind them) from the institutions. It does that frequently for reasons having nothing to do with bailouts of risk - for example liquidity is injected during peak holiday shopping periods, so that there is enough cash in the banking system for credit card transactions to clear. It is just helping markets clear and getting compensated for doing so. The Fed does not use tax receipts for a bailout. Its actions are really not applicable to the libertarian vs. statist debate.
That said, I do support letting losses lie on the risk takers here and hope we won't have any bailouts.
And your headline is very, very Orwellian.