Kenneth D. Garbade, “Direct Purchases of U.S. Treasury Securities by Federal Reserve Banks,” Federal Reserve Bank of New York Staff Report No. 684, August 2014Garbade examines how the US Federal Reserve originally had the power to directly buy US government debt, and how this was done frequently from 1917 to 1935, in 1942 (during WWII) and some other years too.
Bill Mitchell also has a nice analysis and summary here:
This is all fascinating and lost history and, as Bill Mitchell notes, the idea that central banks should be forbidden from directly purchasing government debt is a piece of neoliberal fiction. There are clear lessons for today too. We have already seen how indirect central bank purchases of government debt on a large scale can limit government-debt-to-GDP ratios. It would be easier and more effective for central banks to do this directly, especially for nations like Japan where government-debt-to-GDP ratios are already very high.
Garbade, Kenneth D. 2014. “Direct Purchases of U.S. Treasury Securities by Federal Reserve Banks,” Federal Reserve Bank of New York Staff Report No. 684, August.