I just saw this as a solution for the consumer credit crisis:
By putting that money in the hands of holders of consumer and mortgage loan securities, the government hopes more money will flow to consumers than has occured so far in previous bailout plans.
But the program to make $200 billion available for a range of consumer loans – including credit cards and car loans – likely won’t be up and running until February. Government officials briefing reporters couldn’t say how much additional credit the program might make available to consumers in time to feed purchases for the holiday shopping season.
That $200 billion aimed at spurring consumer borrowing will come from the Federal Reserve Bank of New York, which will lend that money to holders of securities backed by consumer debt, such as credit card debt.
Maybe I am missing something but isn’t a big part of the “credit crisis” the fact that credit has been too easy to get and many people have gotten in over their heads. How is giving them more credit so the can buy more stuff going to help that.