central bank

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Stacy Carney
Stacy Carney's picture
central bank

when the market crash at 2008 and the big companies got money from the government is that mean that the central bank was printing money?

Jason Pride
Jason Pride's picture

Hi Stacy,

During the crisis in 2008 the companies receiving bailouts from the government were granted loans or loan guarantees. These funds were financed through a variety of sources within the federal budget. So in that regard, no the government was not just printing money. It is worth noting however that US currency is no longer backed by any security. The government can choose to simply print more money, but this will cause inflation in the country and a devaluation of the currency in the international market.