If they bought the bonds from the treasury instead of the market, the newly printed money would be in the hands of the treasury. They want it in the hands of the private sector - which makes sense.
Treasury bonds finance Federal spending which ends up in the hands of the private sector--a much broader swathe of the private sector. Buying them from the private sector just means a select group of banks get to slice off a chunk before it gets to the rest of the economy.
Comments
You're right about the macro-economics, but the Goldman Sachs angle is still a wtf.
There's nothing fishy about it. They buy treasury bonds from primary dealers, which include Goldman Sachs.
http://en.wikipedia.org/wiki/Primary_dealers
How about the part where Bush's Treasury Secretary (http://en.wikipedia.org/wiki/Henry_Paulson), and Clinton's Treasury Secretary (http://en.wikipedia.org/wiki/Robert_Rubin), and the NY Fed Chairman (http://en.wikipedia.org/wiki/William_C._Dudley) are all ex-Goldman Sachs. Doesn't that sound a little fishy?
If they bought the bonds from the treasury instead of the market, the newly printed money would be in the hands of the treasury. They want it in the hands of the private sector - which makes sense.
Treasury bonds finance Federal spending which ends up in the hands of the private sector--a much broader swathe of the private sector. Buying them from the private sector just means a select group of banks get to slice off a chunk before it gets to the rest of the economy.