Actually, it was just added on to our debt.It's gone? Where'd it go?
Hint: It went into the economy.
Indeed! There was an 8,000 transfer of money from cash reserves to consumers repaid at some of the lowest interest rates in history.
The consumers then took that money and used it to purchase goods and services - adding that money to the economy, removing it from reserves (Or, of course, having it monetized)
Wow, moron post of the day.
For starters, there are no gov't "reserves." We are running a deficit. All that money had to be either borrowed from someone else, crowding out other uses for that money, or raised from taxes, crowding out other uses for that money.
The consumer did not take the money and purchase goods and services. He purchased an asset, namely a house. When that house goes down in value, the money given disappears.
It is as if someone had a crazy old uncle who gave him $50k as a downpayment on a house. The clueless nephew (you, for example) buys the house. Within 18 months prices have declined and you are in foreclosure. The equity disappears. Where is uncle's $50k? Gone.
Same here.