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US Treasury and the Fed: too close for comfort?

Some economists have reservations about recent moves to rescue the economy.

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Economic historians must see the actions of today's Federal Reserve as strange.

"Very, very unusual," says Allen Sinai, chief economist of Decision Economics, an economic consulting firm. "Unprecedented … uncharted."

The nation's central bank has joined with the United States Treasury in a host of measures this year aimed at stopping the economic slump and financial crunch from plunging the economy into a depression. The Fed's bold activism is apparently based on the view of its chairman, Ben Bernanke, that the Great Depression was caused by a credit freeze – plus a determination not to let it happen again. At Princeton University, where he had taught for years, Mr. Bernanke's research centered on that economically desperate era of the 1930s.

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