What? I don't think that's at all true.
> the market collectively deciding that depositing money and lending it out is the best use of their money
I don't think anyone thinks that earning bank interest is the best use of their money. Interest is basically 0. In some countries you have to pay to hold deposits in banks.
> those savings have to go somewhere
They actually don't. We could legislate 100% reserve requirements for example, instead of the 0% we have today.
> Before 2008 those savings were flooding into mortgage bonds
I think you're misunderstand how banks operate these days. Banks no longer lend out proportional to the deposits they get, banks lend out as much as they can without any limit. The amount people are saving is literally irrelevant at this point. It was already basically irrelevant in 2000. https://www.newyorkfed.org/research/epr/02v08n1/0205benn/020...
You're forgetting something extremely important here. It's the savings that are fueling cheap loans. Those savings force the Fed to lower interest rates. It's not the Fed that is making this decision, it's the market collectively deciding that depositing money and lending it out is the best use of their money and those savings have to go somewhere.
Before 2008 those savings were flooding into mortgage bonds and banks ran out of mortgages to sell so they just took subprime mortgages and got the rating agencies to lie for them. All for that sweet sweet commission.