‘This tweet is beyond misleading—it’s horses**t…’
(Claire Russel, Liberty Headlines) Rep. Alexandria Ocasio–Cortez, D-N.Y., was caught spreading misinformation about the federal government’s response to the coronavirus and using the virus’s outbreak as an opportunity to push for socialist policies.
After the stock market crashed last week, the Federal Reserve announced it would push $1.5 trillion in capital into the market to offset the economic imbalance.
Ocasio–Cortez immediately claimed that the Fed’s response is proof that the federal government can and should forgive student loan debt.
FYI, the amount that the Fed just injected almost covers all student loan debt in the US.
There is absolutely NO excuse for not pausing student debt collections, planning for mortgage &rent relief, etc.
We need to care for working people as much as we care for the stock market. https://t.co/IT6qZA2gtt
— Alexandria Ocasio-Cortez (@AOC) March 12, 2020
This is false. The Fed did not just write a $1.5 trillion check to the banks. Rather, it engaged in “short term transactions with banks to ensure financial stability,” according to the National Review.
This is a significant distinction, said Justin Wolfers, an economist with the Brookings Institute.
The Fed’s short term loans *cost us nothing* when they’re all repaid the next day. This tweet is beyond misleading—it’s horseshit—and the sad thing is @RBReich knows it.
These juxtaposition of these two facts simply show a similarity—that two groups both borrow money. Harumph. https://t.co/2FAYBu8oNP
— Justin Wolfers (@JustinWolfers) March 13, 2020
The Fed is not bailing out the banks, as Ocasio–Cortez is suggesting. Instead, it’s “lending to banks and strategically purchasing assets,” said Richard Morrison, a fellow at the Competitive Enterprise Institute, according to Fox News.
“The short-term lending the Fed engages in is quickly repaid by the financial institutions in question, even when, as in this case, the Fed has decided to dramatically scale up certain categories of lending in response to a market downturn,” Morrison continued.
“Whether this policy is the best one is a different question, but at the very least, American taxpayers should know that it is definitely not the fiscal equivalent of $1.5 trillion in new federal spending,” he said.