Brian Wesbury: "Federal Reserve Losing $80B, Taxpayers Funded This Loss"

"In other words, the Federal Reserve is losing. Last year, they lost about 80 billion dollars, and taxpayers funded that. We use that money to pay the banks. If we stopped this, imagine how much we could reduce the deficit over a 10-year period — it would be 2 trillion dollars.

So, is Congress then financing this loss? And if so, where in the budget is that money? Well, they play sleight of hand with this, Charlie. It's crazy. The Federal Reserve has an account they call a "deferred asset."

Before all this changed, the Fed held bonds, but they didn't pay the banks and made money every year. Then they would give that money to the Treasury at the end of the year. Now that they're losing money, they have what they call a "deferred asset," which is the most absurd term I've ever heard. It's a negative account.

I don't know how they're paying their employees. I don't know how they're keeping the lights on. Because if you run a private business in deficit, you have to raise more equity or debt or something in order to keep operating.

So, in my opinion — and the Fed really won’t tell you this — they’re borrowing money from the Treasury to keep the lights on."