Maybe I am the only one on the planet who did not know this, but here is a paragraph or two from a report at The Hill regarding the highway fund legislation before Congress and how someone proposed it be funded:
“When banks join the Federal Reserve system, they are required to buy stock in the central bank equal to 6 percent of their assets. However, that stock does not gain value and cannot be traded or sold, so to entice banks to participate, the Fed pays out a 6 percent dividend payment.
The Senate proposal says it would slash that “overly generous” payout to 1.5 percent for all banks with more than $1 billion in assets. While the summary language outlining the proposal said that change would only impact “large banks,” industry advocates argued that banks most would identify as small community shops could easily have assets in excess of that amount.
Banks are working to mobilize against the provision, even as lawmakers are pushing to pass a highway bill before program funding expires at the end of the month.”
Does this make any sense?
You pay a membership fee to a club that then pays you to stay in the club AND will bail you out even if you screw up and go insolvent? And not just you–you and all of your insolvent club-buddies?
UPDATE: July 29 2015: Congress passed a 3 month extension to funding highways. Three months should be sufficient for the Bankster Lobby to change the prescription involving the Federal Reserve.
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