In 2008, it all came apart. After September, once Lehman Brothers went under, global lending froze, which in turn sent global production and stock markets into free fall. The Fed, Congress, and the U.S. Treasury eventually took unprecedented measures to cushion the blow. They cut interest rates to zero, extended unlimited credit to foreign central banks, shoveled out bailouts to nearly a thousand firms, and ran by far the largest peacetime deficit in U.S. history—nearly 10 percent of GDP.
