[dragonwriter]

> This is quite literally "printing money", right?

No, its not literally printing money. (That’a what happens in the big presses run by the Bureau of Engraving and Printing.)

It is arguably figuratively printing money, but that’s exactly one of the Fed’s primary tools to acheive its job, by design.

> Wasn't the Fed not supposed to be allowed to do that?

What gave you that idea?

[vdupras]

I don't know, general principles. If you can balance your budget with money printed out of thin air, why bother with selling treasury bills to anyone but the Fed, at 0%?

[dragonwriter]

The whole reason for a central bank with its own mission and decisionmaking on monetary policy is to separate that function from budgeting done by the Congress, so that the people controlling the budget cannot balance the budget through monetary policy.

Now, if you had evidence of the Fed making decisions on the basis of impact on budget fiscal balance rather than on the basis of balancing the tension in its “dual mandate” on full employment and price stability, then you’d have something the Fed wasn’t supposed to do. But money printing (in the figurative sense) is exactly one of the things that the entity handed the reigns of monetary policy under the law is supposed to use as a means to acheive its mandate.

[vdupras]

Oh, alright, we speak the same language. Of course I don't have evidence, only hunches, and they of course mean nothing.