agip wrote:
of all the crazeballs structural economics items....this system has to be up at the top.
As I understand it:
The Fed creates 'money' out of thin air
With this new 'money,' the Fed buys US Government debt
US Government pays billions of dollars of interest on the debt to the Fed
The Fed remits the billions of dollars of interest payments to the US Government.
clean as a whistle circle.
It's insane. Something out of a sci fi satire.
https://www.wsj.com/articles/fed-sent-88-5-billion-in-profits-to-u-s-treasury-in-2020-11610384401?mod=lead_feature_below_a_pos1
It's more complicated than that because the Fed doesn't create money out of thin air really, they create bank reserves which has been shown to not be as inflationary as once thought (Exhibit A : 2008-2020)