That's not what it was supposed to be, and in many ways it had an important function--something that obviously could have been structured better, and, as Doug said at the time, used to push for actual reform. But that hardly made it unnecessary in the short run (or for all the pension funds both here and there, in the long run as well.) On that function, from LBO #123 (recall, for a bit, that this is LBO-talk):
<OPEN QUOTE> In the two years since the peak of the bubble in the third quarter of 2007, total borrowing and lending (which must, of course, be equal) in the U.S. economy fell by $5.6 trillion, from growth of $5.3 trillion to a shrinkage of almost $300 billion (meaning more debt was paid off or written off than new loans were made). Almost every borrowing and lending sector pulled back: households decreased their borrowing by $1.1 trillion, mortgage packagers by $1.3 trillion, banks by $634 billion. Only the federal government expanded its borrowing significantly, by $1.1 trillion. There was vast shrinkage on the lending side too, with banks pulling back to the tune of $1.9 trillion (from new lending of $1.0 trillion in 2007 to a reduction in lending of almost $900 million in the third quarter of 2009), money market funds by $1.4 trillion, and mortgage packagers by $1.2 trillion. The only major sector to expand its lending: the Federal Reserve, by $1.3 trillion. In other words, the whole machinery of borrowing and lending would have seized up entirely if not for Washington. <CLOSE QUOTE>