==> Currently the Fed holds about $1.7 trillion in mortgage-backed securities. The ostensible purpose of this massive bond-buying was to prop up the mortgage market, which props up the real estate market, which ultimately provides relief to struggling homeowners who are underwater.
==> The total outstanding mortgage debt on one- to four-family residences is $9.9 trillion. (That’s the smallest breakdown I could quickly find at the Fed’s site.)
==> Using back-of-the-envelope calculations, it seems that for as much money as the Fed has spent on mortgage-backed securities, it could have covered the shortfall (the difference between property value and mortgage debt) for every individual homeowner in America.
==> I’m not saying that would have been a good idea, obviously, and there would be technical problems in how one would implement such a plan. But it makes you wonder how much brainstorming Federal Reserve officials actually did, if they’ve been sleepless since 2008 worrying about beleaguered families and seeing what they actually chose to do with their discretionary powers.