Abacus 2007 was the name of an investment in residential mortgagebacked securities, a product that yields income from mortgage payments by homeowners. The deal was as follows: while Goldman Sachs sold the product, while the intermediary company that arranged the deal, Paulson & Co., went “short” on the deal.
The 19th century economist David Ricardo already explained that governments would almost certainly abuse their power to issue paper money if, for instance, they were forced by war into creating money. He argued that central banks should instead be governed by individuals entirely independent of government.