So, you're right - I didn't realize.
BUT why think we wouldn't've passed Liberty Bonds anyway, given that
the alternative was the ruin of the American economy with the inevitable consequences for its people and the next election? Or maybe he would've declared war to keep the world safe for our banks... ;-)
Why bother?
Surely simpler by far to announce an increase in America's own armed forces "due to the perilous world situation" and buy the munitions for America's own arsenals. Since the money loaned to the Allies was spent on purchases in America, this simply "eliminates the middleman". The money stays in America instead of going (notionally) across the Atlantic and then coming back again.
After all, the war couldn't last forever, and when it ended, the munitions sales would dry up, regardless of which side won. So a recession was unavoidable. The only question was its date, and from a political standpoint 1917, directly after an election, would be a lesser evil than say 1919/20, in the runup to one.
BTW, as has been repeatedly pointed out, all loans up to 1917 had been secured ones, so American banks were in no danger of losing their money whatever happened in Europe. Had they given unsecured loans they would have been in danger, but Wilson and the Fed were well aware of this, hence their emphatic opposition to such loans.
EDITED: I do apologize for my crank - it was wrong. I should know better than to comment on these - they make me cranky because everybody's either mistaught or taught almost nothing about it, because only Japanese were happy enough with how they did that their historians are interested and tell the truth. And this time I let myself get overextended into three.
Who is being "mistaught" on the importance (esp economic) of US participation?
I became aware of it through a book by Lord Justice Devlin, a British judge with no particular pro-German leanings that I'm aware of, and who lost a cousin in WW1. The book, incidentally, was written in 1968, long before there was even an internet. let alone an AH website.