Agreed, the one thing that people seem to happily disregard is that the politicians' incentives are even more mis-aligned than those of a worst bankster out there, so to entrust economic policy to them is suicide. However, it's the new reality. And someone mentioned the independence of the Fed. We're so far beyond such trivial details as the independence of the CB, we might as well forget it. This is the brave new world.
I guess this is what Fed buying will look like http://www.newyorkfed.org/markets/pomo/display/index.cfm?showmore=1&opertype=orig Operation 1 - RESULTS Operation Date:03/25/2009 Operation Type:Outright Coupon Purchase Release Time: 10:30 AM Close Time:11:00 AM Settlement Date:03/26/2009 Maturity/Call Date Range: 02/29/2016 - 02/15/2019 Total Par Amt Accepted (mlns) : $7,500 Total Par Amt Submitted (mlns) : $21,937 CUSIP ID Security Description Par Amt Accepted ($) 912828KS8 T 02.625 02/29/16 2,836,000,000 912810DW5 T 07.250 05/15/16 115,000,000 912828FQ8 T 04.875 08/15/16 1,031,000,000 912828FY1 T 04.625 11/15/16 739,000,000 912810DX3 T 07.500 11/15/16 147,000,000 912828GH7 T 04.625 02/15/17 35,000,000 912828GS3 T 04.500 05/15/17 950,000,000 912810DY1 T 08.750 05/15/17 238,000,000 912828HA1 T 04.750 08/15/17 702,000,000 912810DZ8 T 08.875 08/15/17 159,000,000 912828HH6 T 04.250 11/15/17 0 912828HR4 T 03.500 02/15/18 0 912828HZ6 T 03.875 05/15/18 0 912810EA2 T 09.125 05/15/18 23,000,000 912828JH4 T 04.000 08/15/18 0 912828JR2 T 03.750 11/15/18 0 912810EB0 T 09.000 11/15/18 193,000,000 912828KD1 T 02.750 02/15/19 0 912810EC8 T 08.875 02/15/19 332,000,000 Exclusions: CUSIP ID Security Description 912828FF2 T 05.125 05/15/16