Record $89B Taxpayer Profits in 2012
The Federal Reserve Bank on Thursday reported a record payment to the U.S. Treasury of $88.9 billion in 2012.
That is good news for U.S. taxpayers.
It means the federal government got $88.9 billion more to use to pay its bills. That amount did not come out of taxpayer pockets!
It’s a substantial chunk of change since 2009. It may be more revenue than could be realized by raising the basic tax rate for the rich all the way to 100% for a year!
There is, however, a dark lining around the silver cloud.
The Dark Lining
The reason the Fed has been able to pay taxpayers so much since 2009-2010 is because of the measures it took to bailout the financial sector back in 2008.
Most Americans are clueless how close to total fiscal collapse this nation got in the dark 2008 days of September and October. It is scarier than scary, to say the least.
Those were last resort actions.
As much as some may vociferously disagree, the only thing that saved us was Fed actions and TARP. We hate it, but the bailout of the big banks, and others, prevented a full fledged depression.
The Silver Cloud
The result of Fed actions and TARP in September and October of 2008 is that the United States continued to function financially.
The dollar, as the world currency of trade, was allowed to function. As such, that allowed the world to continue to function.
Fed actions and TARP essentially loaned the financial sector hundreds of billions of dollars. The Fed bought shaky financial assets via the bailouts.
Since then, the Fed has been selling those recovering financial assets. TARP has reaped interest profits from its loans.
Fed asset purchases and TARP loan interest fees have reaped huge profits for the American taxpayer.
$88.9 billion in 2012 profits for U.S taxpayers reported by the Fed is just the most recent example.
From a taxpayer perspective, perhaps the Fed and Congress should continue policies that profit the American taxpayer.