Audit the Fed

[RightinNYC]

It gets about 9 billion to dispose of inhouse but pushes 21 billion out to the treasury. That was just pure interest in 2005.

A great number to look at is what the fed moved to the banker payout. A quite cool $4.6165 trillion as of awhile back. It is likely more by now.

Perhaps a better word would be tribute instead of interest.

The federal reserve hard assets are around 263 billion dollars if they sell their buildings.


Just for some perspective:

Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion


What a badazz to beat all that spending in less than a hundred days there!

Got a link for any of this? Where is this $4.6T figure coming from?

 

[akyron]

Got a link for any of this? Where is this $4.6T figure coming from?

Can You Spare $4.6165 Trillion Dollars?


Big Bailouts, Bigger Bucks


Breakdown of the Rescue efforts---More recent has it up to 7.4
4.4 of it directly from the Federal reserve

The scariest chart ever

Credit crisis bailout ‘largest outlay in American history


"A billion here, a billion there; soon you're talking about real money."

World War 2 was a relative bargain

Putting the Bailout in Perspective


Where'd the bailout money go? Shh, it's a secret

 

[RightinNYC]

"Committed" is very different than "spent," so those comparisons to WWII, etc. are inapt. I'm also still not seeing how $9b is worth killing presidents over.

 

[akyron]

"Committed" is very different than "spent," so those comparisons to WWII, etc. are inapt. I'm also still not seeing how $9b is worth killing presidents over.

Four and a half trillion since 2008 discounting any interest payouts for many many decades might be.

From what I understand those payouts are not loans and wont be paid back. ever.

 

[RightinNYC]

Four and a half trillion since 2008 discounting any interest payouts for many many decades might be.

So in 1962, the Fed predicted that 46 years later they might make billions, but only if they killed JFK?

From what I understand those payouts are not loans and wont be paid back. ever.

This is a significant misunderstanding. In exchange for getting funds from the government, institutions are giving the government shares of their companies. Remember all the complaining about how Obama was taking control of private companies, etc.?

Hell, you just acknowledged that there would be interest payments - why would there be interest payments on one-time transactions?

 

[presluc]

You know that every company is audited every year, right?

Halliburton, Annual Report and Proxy

They must have changed since the days of Enron huh?

I think there is a differance between checking on a company and audit a company.

 

[RightinNYC]

They must have changed since the days of Enron huh?

No, it hasn't. Every company gets audited every year, hence the collapse of Arthur Anderson after Enron.

I think there is a differance between checking on a company and audit a company.

There is, but because every company is audited, not just checked on, I don't think it makes a difference.

 

[presluc]

No, it hasn't. Every company gets audited every year, hence the collapse of Arthur Anderson after Enron.



There is, but because every company is audited, not just checked on, I don't think it makes a difference.

I take it you will agree that there are some loopholes?
Otherwise corporations would have nothing to hide right?

 

[obvious Child]

They must have changed since the days of Enron huh?

Yes. The Sarbanes-Oxley of 2002 significently changed what public auditing firms are allowed to do outside of an audit which seeks to alleviate the problems Anderson had with Enron, namely independence. I can go more into this if you want, but if you're not an auditor or accountant or ethics compliance, it's going to pretty boring.

I think there is a differance between checking on a company and audit a company.

You mean reviews and audits. Yes, there is a difference. However, all publicly traded firms have been required to have audits since I think the 30s.

 

[presluc]

Yes. The Sarbanes-Oxley of 2002 significently changed what public auditing firms are allowed to do outside of an audit which seeks to alleviate the problems Anderson had with Enron, namely independence. I can go more into this if you want, but if you're not an auditor or accountant or ethics compliance, it's going to pretty boring.



You mean reviews and audits. Yes, there is a difference. However, all publicly traded firms have been required to have audits since I think the 30s.

Can a corporation have loopholes during an audit?

If they can not have any loopholes I stand corrected.

However if it is true what good would it do to audit the Fed which can also use loopholes?

 

[obvious Child]

Can a corporation have loopholes during an audit?

You need to define loophole.

A tax loophole is different from accounting loophole. Tax law is different from US GAAP (and IFRS for that matter). Audits are done on the basis of US GAAP and IFRS for many large companies today. Publicly traded firms have their financial reporting statements audited not their taxes as part of being listed on stock exchanges.

 

[socca]

If the Fed were actually a federal agency, the government could issue U.S. legal tender directly, avoiding an unnecessary interest-bearing debt to private middlemen who create the money out of thin air themselves. Among other benefits to the taxpayers. a truly "federal" Federal Reserve could lend the full faith and credit of the United States to state and local governments interest-free, cutting the cost of infrastructure in half, restoring the thriving local economies of earlier decades."

Arguments over the proper degree of independence between the Fed and the Gov't have been ongoing since the Fed was created, and the actual relationship has evolved substantially since 1913, as described by Overtveldt in his recent book Bernanke's Test.

[ame=http://www.amazon.com/Bernankes-Test-Bernanke-Greenspan-Central/dp/1932841377/ref=sr_1_1?ie=UTF8&s=books&qid=1243941323&sr=1-1]Amazon.com: Bernanke's Test: Ben Bernanke, Alan Greenspan, and the Drama of the Central Banker: Johan Van Overtveldt: Books[/ame]

:2wave:

 

[akyron]

So in 1962, the Fed predicted that 46 years later they might make billions, but only if they killed JFK?



This is a significant misunderstanding. In exchange for getting funds from the government, institutions are giving the government shares of their companies. Remember all the complaining about how Obama was taking control of private companies, etc.?

Hell, you just acknowledged that there would be interest payments - why would there be interest payments on one-time transactions?

This is way before JFK. JFK just attempted to take some control back with his measly 4 billion in interest free money. No one has had the guts to ever try that again. As a matter of fact Regan crippled JFKs interest free order as one of his priorities.

The money they are given is LOANED back to the US on interest.

It is ludicrous. Unbelievably so. That is a good portion of its armor.

 

[phattonez]

About the Fed, can anyone really defend the fact that the Fed can print money, thereby making whatever you have earned and saved worth less just because you have it in cash and not goods? Does that seem ethical to anyone?

 

[akyron]

About the Fed, can anyone really defend the fact that the Fed can print money, thereby making whatever you have earned and saved worth less just because you have it in cash and not goods? Does that seem ethical to anyone?

If they were just replacing beat up money that would be fine but that is not the whole story.


When Money Wears Out

 

[dirtpoorchris]

About the Fed, can anyone really defend the fact that the Fed can print money, thereby making whatever you have earned and saved worth less just because you have it in cash and not goods? Does that seem ethical to anyone?

Yes you can defend it. But the only position that seems to make sense to me is a odd one where we our purposely watering down the parts of the world that are dependent on your dollar by magically making tons of it and infusing it in places more interesting than others.


(hope the above words attach to the right places. Mind was stoned during composure.)

 

[presluc]

You need to define loophole.

A tax loophole is different from accounting loophole. Tax law is different from US GAAP (and IFRS for that matter). Audits are done on the basis of US GAAP and IFRS for many large companies today. Publicly traded firms have their financial reporting statements audited not their taxes as part of being listed on stock exchanges.

Well since I never was in need of an accountant I'll have to ask .
Doesn't acounting loopholes lead to tax audit loopholes.

AS for IRS tax evasion I'm pretty sure the lawyers may come up with some loopholes.
If drug dealers didn't have tax loopholes they could not operate in America could they?

 

[dirtpoorchris]

Fed Would Be Shut Down If It Were Audited, Expert Says
Fed Would Be Shut Down If It Were Audited, Expert Says - Markets * US * News * Story - CNBC.com

The Federal Reserve's balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant's Interest Rate Observer, told CNBC.

With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.

"If the Fed examiners were set upon the Fed's own documents—unlabeled documents—to pass judgment on the Fed's capacity to survive the difficulties it faces in credit, it would shut this institution down," he said. "The Fed is undercapitalized in a way that Citicorp is undercapitalized."

Grant said he would support legislation currently making its way through Congress calling for an audit of the Fed.

Moreover, he criticized the way the Fed has managed the financial crisis, saying the central bank's target rate should not be around zero.

 

[obvious Child]

Well since I never was in need of an accountant I'll have to ask .
Doesn't accounting loopholes lead to tax audit loopholes.

Audit loopholes? Audits are done on the basis of accounting. And financial reporting is different from tax reporting. For instance, a company with deferred revenue does not get taxed on that as long as it remains overseas. It is not reported on their taxable income. But on their financials, it is reported as income that eventually finds its way to the bottom line. The numbers are different. Just because someone is taking advantage of a accounting loophole doesn't mean they are cheating on their taxes. And auditing firms generally force firms to abide to the accounting rules. They have the power to start a delisting which scares virtually every public firm.

If drug dealers didn't have tax loopholes they could not operate in America could they?

Technically, drug dealer cannot take the cost of their goods as an expense, resulting in massive taxation on their illegal sales. That said, no drug dealer even reports so tax loopholes are irrelevant when you evade taxation.

 

[presluc]

Audit loopholes? Audits are done on the basis of accounting. And financial reporting is different from tax reporting. For instance, a company with deferred revenue does not get taxed on that as long as it remains overseas. It is not reported on their taxable income. But on their financials, it is reported as income that eventually finds its way to the bottom line. The numbers are different. Just because someone is taking advantage of a accounting loophole doesn't mean they are cheating on their taxes. And auditing firms generally force firms to abide to the accounting rules. They have the power to start a delisting which scares virtually every public firm.



Technically, drug dealer cannot take the cost of their goods as an expense, resulting in massive taxation on their illegal sales. That said, no drug dealer even reports so tax loopholes are irrelevant when you evade taxation.

So what you're saying is drug dealers have tax loopholes corporations and special interest don't?

 

[obvious Child]

So what you're saying is drug dealers have tax loopholes corporations and special interest don't?

Where did you get that? The tax law is specifically meant to ensure those engaged in illegal activities will always be taxed on their sales. But since no drug dealer reports anyways (which is tax evasion), it doesn't matter.

 

[presluc]

Where did you get that? The tax law is specifically meant to ensure those engaged in illegal activities will always be taxed on their sales. But since no drug dealer reports anyways (which is tax evasion), it doesn't matter.

What if they don't report every sale?

Example windfall tax used to be a good stable way of getting tax revenue.
It no longer exist.
Inheirtence tax was a good stable way of getting tax revenue.
It no longer exist.

 

[wbreese91]

You guys do know that this is completely pointless considering the Fed is audited by the U.S. Treasury and other powerful offices in Washington on a relatively frequent basis, not to mention Congressional review.

 

[ARealConservative]

You guys do know that this is completely pointless considering the Fed is audited by the U.S. Treasury and other powerful offices in Washington on a relatively frequent basis, not to mention Congressional review.

Bernanke must think this audit is new as he considers it to be burden and risk placed on the fed. Vampires hate sunlight. :mrgreen:

 

[Ethereal]

You guys do know that this is completely pointless considering the Fed is audited by the U.S. Treasury and other powerful offices in Washington on a relatively frequent basis, not to mention Congressional review.

Yes, and none of the information gathered from the audit is made public or subject to freedom of information requests.

If you think a secret audit conducted by the Treasury is some kind of check against corruption I have a bridge in Arizona I'd like to sell you.