Dear Hamilton Project:
The Fed can goose employment a lot more than it is now.
They should buy risky assets. Which ones? How about a "bailout" for the "middle class", from the lender of last resort?
Why don't they buy credit card debt and slash the rate required on it to zero (until such time as it looks like the rates might go back up)?
This could be instantly hundreds of dollars a month, directly into household/consumers' hands.
It's unfair, at least as unfair as giving zero short-term rates and bailouts to the very bank managements culpable for failure, but it will work.
Change the bankruptcy law temporarily, to make it easier for consumers to clean their balance sheets, including the debts that were put 100% off limits during the Bush-43 era.
The Fed has over a trillion dollars in Treasury securities. The interest on that will pay for the credit losses and infuriate the Rightwing, but at least they won't have to pay more taxes.
Banks will be able to shrink their balance sheets even more and build their capital position. They will need it. Why? Because they have to clear the market on the foreclosed homes. One used to hope for home loan modifications and the like (i.e. temporarily less security for lenders in the bankruptcy courts), but we might be passed the time for that).
Sincerely,
Citizens who don't think the GOP will do anything
