However, according to the Fed’s December 10th H.4.1 report, almost 9 months after the CARES Act became law, Treasury has handed off to the Fed only $114 billion of the authorized $454 billion total.
by Dave Allen for Discount Gold & Silver
The International Forecaster
Under the historic, bipartisan CARES Act, passed by Congress and signed into law in late March, the plan was for the Treasury Department to allocate $454 billion of taxpayer funds to the Federal Reserve.
The Fed, in turn, was to leverage that money by 10 times, or roughly $4.54 trillion, to preserve the economy – particularly by keeping workers on the payroll and businesses surviving until the pandemic was brought under control.
Fed Chair Jerome Powell explained the plan like this: “We’re required to get full security for our loans so that we don’t lose money.
“So, the Treasury puts up money as we estimate what the losses might be…Effectively $1 of loss absorption of backstop from Treasury is enough to support $10 of loans.”
However, according to the Fed’s December 10th H.4.1 report, almost 9 months after the CARES Act became law, Treasury has handed off to the Fed only $114 billion of the authorized $454 billion total.