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View Full Version : Income taxes ==> pay down the Interest rate to the Fed -




Lord Xar
04-03-2009, 01:36 PM
I "heard" that the income taxes Americans pay each year just goes to pay just the interest rates on the debt. Or something like this. Is this true? There was a tie in with the Fed, and the interest on its printed money. Is there a definitive source on this?

Cowlesy
04-03-2009, 01:44 PM
If the U.S. Treasury issues a 20-year Bond, and the Federal Reserve is the purchaser, then yes, U.S. Taxpayer funds will go to Federal Reserve to pay interest on the bond.

Ultimately, the Taxpayer would in theory someday have to pay down the principal too, but that ain't going to happen.