The Corner

Monetary Policy

Jeet Heer’s Fed Jeer

As Congress debates the next coronavirus-relief package, Senate Republicans have emerged as a voice for fiscal restraint, while Democrats call for an extension of enhanced-unemployment benefits and for $1 trillion in assistance to states and localities. It’s a puzzling political choice on the part of the GOP, since a more generous bill would likely bolster the president’s reelection prospects.

Could it be that Senate Republicans are acting on … principle? “No!” says Nation columnist Jeet Heer. Heer peered into the Republican mind and figured out why the GOP isn’t pushing a more generous spending package: Republicans care only about Wall Street, and Wall Street is already taken care of.

Because the Fed has lent more than $7 trillion to businesses, “no strings attached,” corporate America has survived the crisis, and Republicans are no longer worried, says Heer.

One minor inconvenience: The Fed’s entire balance sheet is worth $7 trillion. The vast majority of those holdings are in Treasurys and mortgage-backed securities. The Fed has thus far lent $12.2 billion to corporations. Payments to households, on the other hand, have totaled $600 billion.

Look, it’s an honest mistake. Heer only overstated the Fed’s corporate lending by 570,000 percent. Not to worry — the inaccuracy has been removed from the column, with a note stating that the article “has been updated.”


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