The Fed does not charge the Treasury directly.
The largest cost to the Treasury is interest on its debt. That was $220 billion in a recent year.
The Fed is a mechanism put in place as the brainchild of the banking syndicate. The banking syndicate cares not if it makes a penny off the Fed’s operations directly; the syndicate has its own operations, that, as you saw above, have the ultimate enhancement as primary dealers in Federal debt.
The Treasury ceded its right to create dollars to the Fed.
The banking syndicate has a few other advantages: it is the sole provider of lending to the government (it has a monopoly on government borrowing). Government bonds represent a claim on taxes, the most powerful form of debt collection. As the sole lenders to government, the syndicate has considerable political influence. The syndicate extends beyond banking into foreign policy. It also extends into the foundation system. It has a monopoly on the capital markets that is enforced by the SEC. The list goes on...
The $77 billion is like cash back on your Discover Card.
Neither does any other holder of government debt.
The largest cost to the Treasury is interest on its debt. That was $220 billion in a recent year.
How recent? Last year the interest was just under $360 billion.
The Treasury ceded its right to create dollars to the Fed.
Just under 100 years ago.
The banking syndicate has a few other advantages: it is the sole provider of lending to the government (it has a monopoly on government borrowing).
That's not true. You can go here, http://www.treasurydirect.gov/govt/apps/apps.htm and lend to the government anytime you'd like.
The $77 billion is like cash back on your Discover Card.
Yeah, free money.