Money Loans

I mean the Fed is the interest on any money it lends. Which is basically all the money in the country, so a perpetual debt that is impossible to repay.
I hear all of our income tax goes straight to paying interest (debt) generated by the Fed. I also hear our income tax is divied up between some programs. Can it be possible, are true at the same time?
If the government must pay for the programs, use our taxes for it .... which reimburses the interest paid on money lent by the Fed to start? They just said that this runs some programs, which he could, but the end result is that it ends up being the same amount going back to the Fed to pay interest. For example, if in fact you of Johnny (the Fed) $ 1, but you have to pay Uncle Sammy (IRS) $ 1 so he can pay the interest of Johnny borrowing 2 $ 85 on something (all programs claimed must be paid directly by the income tax) that have already been paid by the taxes of others.

Here's the scoop, t

- Re "I heard that the Fed sets interest on any money it lends."

Yes, the fed charges interest on loans.


- Re "which is actually all the money in the country, thus a perpetual debt that is impossible to repay."

Sort of true, but not a big deal. I'll explain

By law, all foreign exchange must be guaranteed (ie backed by something of value). When the Fed wants to add money to the economy, they create thin air and buy T-Bills.

Yes, it's $ 800B + T-bills could be considered a perpetual debt. When a T-bill matures, the Fed will buy another.

Why is it not a big deal? Because the Fed's statements about 95% of interest earned on treasury bills to the Treasury. Not a bad deal for the taxpayer.


- Re: "I hear our income tax goes straight to paying interest (debt) generated by the Fed.

It is simply "denial of tax law" nonsense. Prove it by yourself

Revenue from taxes on income: $ 809B
(Ref: http://www.publicagenda.org/issues/factf ...

Interest on the national debt: About $ 350B

Federal Reserve Budget: $ 2.9 billion
(Ref: http://www.federalreserve.gov/generalinf ...

difference.


There are a lot of misinformation out there on this subject. Do not forget to check things out for yourself.

The debt is generated by Congress when they pass a budget that exceeds the projected revenues. The bonds must be sold by the Treasury to cover the deficit. This is where the debt comes not from the Fed.

The only money that the Fed usually lends it for overnight interbank transfers and other loans to member banks. Your car loan or mortgage does not come from the Fed, directly or indirectly.

The reality is that the income tax just about covers the total interest due on the federal debt. It is for Congress to sort that mess. Clinton left office with the first surplus since budegetary LBJ administration. We all know what happened since ... (Even if you factor in the unknowns, Iraq and Katrina, there are still 7 billion dollars missing. Where is the money?)