The Gary Null Blog

By Dr. Paul Craig Roberts

Global Research, July 30, 2011

http://globalresearch.ca/index.php?context=va&aid=25813

As the second decade of the 21st century began, the US economy had not recovered from the Great Recession that began in December 2007.

The economy’s failure to recover was despite the largest fiscal and monetary stimulus in the country’s history. There was a $700 billion bank bailout, a $700 billion stimulus program, a couple of trillion in “quantitative easing,” that is, in debt monetization or the printing of money to finance the government’s expenditures. In addition the Federal Reserve’s balance sheet had expanded by trillions of dollars as the Fed purchased troubled mortgage bonds and derivatives in its effort to keep the financial system solvent and functioning. According to the Government Accountability Office’s audit of the Federal Reserve released by Senator Bernie Sanders, the Federal Reserve provided secret loans to US and foreign banks totaling $16.1 trillion, a sum larger than US Gross Domestic Product (GDP).

Despite the enormous fiscal and monetary stimulus, the economy remained dead in the water.