The Fed is a private corporation, and it runs itself to make a profit for the owners.
If you want to borrow $100, the Fed can create the $100 for you. But they insist on receiving $105 in return. Where does that $5 interest payment come from? From the Fed. They will be happy to create that additional $5 for you so that you can pay them back the $105 you owe them. But, of course, this means you must borrow more from the Fed.
That’s the problem of privately owned Central Banks which depend on debt-driven economies and endless interest payments. Back during the Civil War, the Lincoln administration printed Greenbacks. That was government printed money created to ensure liquidity in the marketplace. There was no interest. You get $100 and you pay back $100 and no one is getting rich off that currency transaction. But the economy is fueled and functions well.
I do not believe that any national economy needs to be fueled by debt. But, of course, The Powers That Be don’t share my view.
What does the Fed do with the profit?
That was government printed money created to ensure liquidity in the marketplace. There was no interest.
I have a $20. Who do I owe the interest to.....how do they get it?