Quote from: hugolp on September 14, 2011, 06:44:01 PM

Quote from: Elwar on September 14, 2011, 06:32:28 PM

Quote from: hugolp on September 14, 2011, 06:26:08 PM

The Federal Reserve gives their benefits to the government. There is a big difference.

The Federal Reserve just gives their money to the government at cost!?!? How nice of them.

If I was them I would charge interest....

oh that's right...they do

Do you realize that the interest that the Fed charges to the government is not real? The Fed charges the government interest on the gov debt that it holds. That money is benefits for the Fed. The benefit of the Fed goes back to the government. So what the government pays, the government gets back. Its not real.

Look, you should look to the original sources and make up your mind. I will have to leave it here.

Be sure to read Working Paper 2007-052B from the St. Louis Fed's research division.

The fed mostly deals in short duration debt, which does not pay interest in the usual sense. T-bills are sold at a discount to the primary dealers (who are not the fed), and then they are resold on the secondary market. The FOMC operates to adjust liquidity and interest rates, but they don't really care about the interest they earn by doing so, only what their actions have on interest rates overall.