Bailout Watch: Uncle Sam's Buying Binge May Not Be Over

All sorts of loans might end up on the government's books.

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Mortgage debt securities. Commercial paper. Shares in banks. What else can the feds buy? Well, pretty much anything, really. Not only does the Paulson plan have a broad mandate, but economist Lyle Gramley, a former Federal Reserve governor, notes that the Fed has within its powers the authority to do just about whatever ever it takes to keep the financial system up and running. Let's say a credit freeze is preventing a small business from getting a loan that it would have gotten under normal conditions. The Fed could go to that small-town bank and tell it to go ahead and make the loan and then the Fed would buy it from the bank. Now if only Bernanke would buy my student loan...