Rand Paul Takes Aim at the Fed’s Bank Bailouts

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We need to bloody stop bailing out the big banks. This too big to fail stuff is nonsense. And it’s kind of the point in time where it’s not even just too big to fail. It’s the fact that they are getting free money. Yeah, the biggest banks in the country. Yeah, the ones that charge you 30 % interest on your credit cards, which again, I understand non recourse loans. Well, the ones that you’re having a difficult time getting a loan from if you are a small business, why would they loan to you if they…

can just give the money to the Federal Reserve and get a great rate of return with no risk whatsoever. Yeah, that’s been going on for some time. Listen, I wonder if anybody, if you get a chance to go back to the 2016 Republican Party platform, it’s from Donald Trump 1. One of the things I was really excited about, Eddie put in there that we didn’t follow through on, was a real effort to go and break up

the big banks and these institutions. It’s few and far between right now in Congress because again, these guys write very big checks. But of course, the usual congressional heroes, guys like Rand Paul, prior to him, Ron Paul, were doing this on a regular basis. Rand Paul just put forward the, calls it the end of the Fed’s big bank bailout act. What does it do? It prevents the Federal Reserve from paying interest on bank reserves.

It ends hundreds of billions in backdoor bailouts for banks and it saves we the people, the taxpayers, about a trillion dollars over the next decade. Yeah, you see, it wasn’t always this way. This came out of the Great Recession where all of a sudden banks would just say, hey, we’ll put our money at the Federal Reserve and get a nice check. And it’s not just the big banks here in the United States. It’s global banks.

as well. Rand Paul being interviewed was asked, said, was asked, said, why would a why would a bank, why would a bank want to provide a small business loan to a local contracting company or a tech startup when they are incentivized to just hold on to cash? Again, you know, there’s a risk reward element and certain things. Why would banks lend their capital?

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when they can take no risk whatsoever and still turn a profit.

Exactly. This again, this happened back in 2008. Before the financial crisis, the Federal Reserve paid zero. That’s right. Zero interest on banks on reserve balances. The banks had a greater incentive to make loans to make a profit. Having their money just sitting there didn’t really make any sense. This is all different now.

The financial crisis led Congress to authorize payments to banks as a way to control the money supply. These payments have gone through the roof. We’re $37 trillion in debt right now, but do know that the Federal Reserve is also paying billions, billions with a B, billions to banks and interest payments. Billions. Again,

Rand Paul has an act here that would stop the Fed interest payments to banks. And again, we’ll save the taxpayer a trillion bucks over 10 years. Who could be against something like this? Oh, I could tell you. Politicians. Politicians that get nice big fat checks from big banks. Watchdog on wallstreet.com.