Anna Bernasek in the New York Times points out that since the Federal Reserve began its third round of "quantitative easing", QE3, it has purchased more than $800 billion in government bonds, in addition to monetizing mortgage-backed securities.  The purpose of QE3, she notes, is to lower long-term interest rates to encourage borrowing, boost the housing sector and employment, and incentivize greater risktaking in the stock market, and yet, the change in 10-year Treasuries is higher now than when this round of QE began. She writes that "the Fed’s outsize presence in the markets for Treasuries and mortgage-backed securities may have changed those markets in ways no one can predict".

But her only real criticism of any of this is that "quantitative easing disproportionately benefits those who are already well off". Her solution? The Fed should continue doing what it has been doing, only instead of printing money and lending it to other banks, it should just lend it directly homeowners: "With $800 billion, for example, the Fed could have given every homeowner in the country a $10,000 loan at a near-zero rate of interest. Think of what that might have done for the economy."

Um, for starters, it would put a lot of people even further into debt and cause price inflation and an unsustainable illusion of growth, such as, perhaps, another housing bubble?

Is that the right answer?