Should the Feds buy Corporate Debt?

  • Federal Reserve policymakers are signaling they could raise U.S. interest rates soon but they are already weighing new tools they may need to fight the next recession.
    A solid U.S. labor market “has strengthened” the case for the first rate increase since last December, Fed Chair Janet Yellen told a central banking conference in Jackson Hole, Wyoming. Several of her colleagues said the increase could come as soon as next month if the economy does well.
    Further rate hikes are expected to be few and far between as the U.S. central bank tries to balance a desire to fuel growth against worries it could overheat the economy.
    But Fed officials at three-day conference that ended Saturday also said they need to consider new policy tools for use down the road, such as raising the inflation target or even Fed purchases of non-government-backed assets like corporate debt.

I am not going into depth on this but my impression is if the government buys corporate debt it gives the government even more control of that company and can result in demands on what they do and how they do it. This brings up pictures of socialism where industry is totally controlled not only production but employment.


We are laying the foundation for socialism in the based loosely upon the Nazi model. Buying up Corp debt puts the govt in the drivers seat, they can dictate and start placing their own people in at the top…REMEMBER who fired the CEO of GM??? Obama! Since when did Obama have the authority to fire a civilian working in a corp.

I don’t think the Nazi model will work because of 2 key factors: Lack of nationalism, Germans LOVE their country and have a lot of collective pride and not being on a war time footing. But who ever said a far left Dimocrat Economist was smart.

The goal is the 3 class society: the masses, who are poor, the uber rich and the all powerful class the Politicos that is the goal and we are well on our way, in fact past the tipping point already.


I wish I could agree that Germans love their country but the fact that Merkle is still in office despite importing muslims in which attacks is a daily occurence and the Germans are told by the government to stand down and permit it.


Who knows today. I lived in Ger in Post WWII, then again in the 70’s and agin in the 90’s and that was my frame of ref, I have not been back since.


Should the Feds buy Corporate Debt?
No. Our politicians would end up buying the debt of every company on the verge of failing so that their friends could get their money out while the general public lost money.


This, as noted, is the essence of socialism.

Ownership of the Means to Produce…given over to government. Not by legal fiat, in this case; but by a stealth campaign - by inflating the currency by printing money and using these new fiat-dollars to purchase ownership of previously-private industries.

It’s a dangerous step; it’s a threshold; and look for the Left and its apologists to cheer this on.


In the traditional sense buying corporate debt does not give them the power that buying stocks does. Corporate debt is not supposed to elect the board of directors. The debt holders can get more power there is a default if there is anything left. Of course if the government buys bonds that are convertable into stock, that’s another story.

But, yes, these does look like the Nazi model in action.


It still opens the door to cronyism.

And when a failing corporation’s first-line debtor, holder of its commercial paper, is the government - it’s a lot easier to sell voters and holdout-congressmen on the idea of Too-Big-To-Fail.

This is the camel’s nose under the tent.


Oh, yes, let our sainted government take control of all those evil companies.