- The Washington Times - Wednesday, March 18, 2009

THE PROBLEM: The U.S. is sinking deeper into a recession that already has left millions out of work and pushed the unemployment rate to 8.1 percent, the highest in more than 25 years. Credit and financial problems plague the economy.

THE RESPONSE: The Federal Reserve on Wednesday launched a bold $1.2 trillion effort to lower interest rates and get Americans spending again, saying it will start buying long-term government bonds and boost purchases of mortgage securities. It also left a key lending rate for banks at a record low between zero and 0.25 percent.

THE GOAL: The Fed hopes its efforts _ along with the government’s bank-rescue program and a $787 billion stimulus package _ will revive the economy by getting cheaper credit flowing more freely to consumers and businesses. That would induce them to boost spending, which would grow the economy.

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