Feds, in Major Shift, Flush Cash Down Toilet

This week's move by the Treasury and Federal Reserve to inject another $800 billion into the financial opens yet another chapter in the government's continually evolving response to the financial crisis.

Add one more acronym to the alphabet soup of financial rescue programs: zero interest loans can't hurt, or ZILCH.  But ZILCH is not just another bailout program.

ZILCH represents a major shift in the Fed's monetary policy along with an effort to streamline governmental efficiency. The central bank has run out of room to lower interest rates, and banks are just hoarding the cash that they've already received from the Treasury.  So the Fed is bypassing the banking system entirely and pumping cash directly into the New York City sewer system to try to revive economic growth.

So far it is hard to tell whether it is working.  Apparently, the cash gets so soggy and nasty that local merchants are reluctant to accept it as payment.  

"There are bound to be some unanticipated consequences of any program that we implement. We are economic experts, not plumbers.  Does anyone really understand what happens when ...  The point is that we have to keep trying until we find something that works. Right now, we have ZILCH, if ZILCH doesn't work, we'll try something else," said Fed Chairman Ben Bernanke.

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