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The Fed Pays $77 Billion to Treasury

That's the Federal Reserve's 2011 income, minus costs


Uncle Ben is trying to help out Uncle Sam. On Tuesday, Ben Bernanke’s Federal Reserve announced that it has handed over $76.9 billion to Timothy Geithner’s Treasury Department. The amount represents the Federal Reserve Banks’ 2011 income, minus costs.

A Fed statement says the amount “was derived primarily from $83.6 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities, and GSE debt securities).”

While that’s a hefty chunk of change, it’s slightly less than the Fed’s 2010 net profits of $79.3 billion, which went to the Treasury last year. Still, as The New York Times points out, this year’s payout is far above average: “The Fed made an average annual contribution to the Treasury Department of $23 billion during the five years preceding the financial crisis. In the five years since 2007, the Fed’s average contribution more than doubled to $54 billion.”

So, the Fed’s various quantitative easing programs have proven a boon to the Treasury, at least. And indirectly, to American taxpayers who’ll be footing a slightly smaller interest charge on the nation’s ballooning debt.

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