Quick Comment on “Making Money” from the Bailout

Folks probably recall that the federal government made money from the last bailout. Guess what? Were going to make money from this one too.

Lets go through the simple logic here. The Fed is by far the lowest cost borrower in the country. It can borrow right now at an average interest rate of roughly 0.5 percent. (Thats averaging short-term and long-term rates.) It is going to lend to the bailout beneficiaries at a higher rate, lets say 4.0 percent. This means that it will net 3.5 percent...