The Fed's Bond Purchases Have Created 80 Billion Windfall For Taxpayers

It turns out that when Uncle Sam invested his money in Uncle Sam, Uncle Sam profited hugely.

Let's hear it for government-directed investment of taxpayer money!

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"The Federal Reserve paid $79.6 billion to the Treasury Department in 2013 as the Fed's enormous investment campaign to stimulate economic growth continued to generate windfall profits for taxpayers. Since 2008, the Fed has expanded its holdings of Treasury and mortgage-backed securities from less than $1 trillion to more than $4 trillion in an effort to suppress interest rates and encourage risk-taking. Its earnings from those holdings have increased apace. The Fed, required by law to put most of its profit in the government's coffers, has contributed almost $323 billion in the last four years. The Fed invests exclusively in federal government bonds, so its profits come from lending to the Treasury. In returning the money, it is effectively reducing the government's borrowing costs." Binyamin Appelbaum in The New York Times.