Trying to figure out how our economy works gives me a headache. 1) The Treasury borrows money from the federal reserve right. Where does the federal reserve get the money? 2) Does the country pay interest to the federal reserve, and if so, how much and who gets the profit? 3) Why do we need to take a loan from essentially a "bank" in the name of the taxpayers and then loan it to financial institutions adding more interest. Couldn't the people with the money at the federal reserve, loan the institutions the money directly, cutting out the extra interest the taxpayers would get? Is it something like me borrowing 5,000 dollars at 10%, and then loaning it out to you right away at 5%. So I pay more than I get back essentially meaning a give away to you under the disguise of a loan?