Sen Cruz wants to cut the Federal Reserve rate to 0%

[gatomontes99]

Up until 2007, the Federal Reserve was nothing more than a place banks had to keep cash to cover 10% of their deposits. The other 90% could go out in loans, treasury bonds, etc. It was a mandated 10%. Up until 2007, they got no interest for it. 

After 2007, the Federal Reserve paid out interest. Now, they are paying about $160B in interest per year of tax payer money. 

Ted Cruz wants to eliminate that:

https://m.economictimes.com/markets/stocks/news/market-stability-threat-cruz-taps-trump-gop-allies-to-push-fed-overhaul/cruzs-controversial-proposal/slideshow/121822358.cms

Cruz's controversial proposal
Senator Ted Cruz is pushing a plan to end the Federal Reserve’s authority to pay banks interest on reserves. He claims this would save the U.S. government over $1 trillion. Cruz has discussed the idea with Donald Trump and Republican colleagues, emphasizing that half of the interest is paid to foreign banks—something he sees as senseless. (Source: Reuters)

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Here is the podcast where he talks about it towards the end: https://podcasts.apple.com/us/podcast/dems-poll-numbers-plummet-plus-how-to-save-%241trill/id1495601614?i=1000719464909

This will save the tax payers $1.6T over 10 years. It will put money back into the economy, instead of sitting in a vault. It will prevent us from funding foreign banks. 

The end result is a win, win, win for America. Yet, somehow this is contreversial.

[Michael Hardner]

12 minutes ago, gatomontes99 said:

 Yet, somehow this is contreversial.

The downsides are described in your own link.

[Nationalist]

Give the banks an ultimatum.

No more interest on assuring your liquidity, or have a federal charter system much like in Canada. 

Edited July 29, 2025 by Nationalist

[robosmith]

24 minutes ago, gatomontes99 said:

Up until 2007, the Federal Reserve was nothing more than a place banks had to keep cash to cover 10% of their deposits. The other 90% could go out in loans, treasury bonds, etc. It was a mandated 10%. Up until 2007, they got no interest for it. 

After 2007, the Federal Reserve paid out interest. Now, they are paying about $160B in interest per year of tax payer money. 

Ted Cruz wants to eliminate that:

https://m.economictimes.com/markets/stocks/news/market-stability-threat-cruz-taps-trump-gop-allies-to-push-fed-overhaul/cruzs-controversial-proposal/slideshow/121822358.cms

Cruz's controversial proposal
Senator Ted Cruz is pushing a plan to end the Federal Reserve’s authority to pay banks interest on reserves. He claims this would save the U.S. government over $1 trillion. Cruz has discussed the idea with Donald Trump and Republican colleagues, emphasizing that half of the interest is paid to foreign banks—something he sees as senseless. (Source: Reuters)

‐--------------‐----------------

Here is the podcast where he talks about it towards the end: https://podcasts.apple.com/us/podcast/dems-poll-numbers-plummet-plus-how-to-save-%241trill/id1495601614?i=1000719464909

This will save the tax payers $1.6T over 10 years. It will put money back into the economy, instead of sitting in a vault. It will prevent us from funding foreign banks. 

The end result is a win, win, win for America. Yet, somehow this is contreversial.

The end result is INSTABILITY much like the CREDIT DEFAULT SWAPS that tanked the economy in 2008.

Banks are ALWAYS trying to reduce their costs at the expense of stability and safety knowing that the Fed has to come to their rescue in MANY CASES, and SOME WIN BIG by taking over the smaller banks that FAIL. 

And lDIOTS like the OP just blindly follow along because they KNOW NOTHING about the repercussions of much greater RISK.

[gatomontes99]

2 hours ago, robosmith said:

The end result is INSTABILITY much like the CREDIT DEFAULT SWAPS that tanked the economy in 2008.

Banks are ALWAYS trying to reduce their costs at the expense of stability and safety knowing that the Fed has to come to their rescue in MANY CASES, and SOME WIN BIG by taking over the smaller banks that FAIL. 

And lDIOTS like the OP just blindly follow along because they KNOW NOTHING about the repercussions of much greater RISK.

Do you think you should be calling me an idıot when you cite a problem that happened in the first year of this policy? 

Edited July 29, 2025 by gatomontes99

[gatomontes99]

7 hours ago, robosmith said:

The end result is INSTABILITY much like the CREDIT DEFAULT SWAPS that tanked the economy in 2008.

Banks are ALWAYS trying to reduce their costs at the expense of stability and safety knowing that the Fed has to come to their rescue in MANY CASES, and SOME WIN BIG by taking over the smaller banks that FAIL. 

And lDIOTS like the OP just blindly follow along because they KNOW NOTHING about the repercussions of much greater RISK.

Do you think you should be calling me an idıot when you cite a problem that happened in the first year of this policy?  

[Scott75]

19 hours ago, gatomontes99 said:

Up until 2007, the Federal Reserve was nothing more than a place banks had to keep cash to cover 10% of their deposits. The other 90% could go out in loans, treasury bonds, etc. It was a mandated 10%. Up until 2007, they got no interest for it. 

After 2007, the Federal Reserve paid out interest. Now, they are paying about $160B in interest per year of tax payer money. 

Ted Cruz wants to eliminate that:

https://m.economictimes.com/markets/stocks/news/market-stability-threat-cruz-taps-trump-gop-allies-to-push-fed-overhaul/cruzs-controversial-proposal/slideshow/121822358.cms

Cruz's controversial proposal
Senator Ted Cruz is pushing a plan to end the Federal Reserve’s authority to pay banks interest on reserves. He claims this would save the U.S. government over $1 trillion. Cruz has discussed the idea with Donald Trump and Republican colleagues, emphasizing that half of the interest is paid to foreign banks—something he sees as senseless. (Source: Reuters)

‐--------------‐----------------

Here is the podcast where he talks about it towards the end: https://podcasts.apple.com/us/podcast/dems-poll-numbers-plummet-plus-how-to-save-%241trill/id1495601614?i=1000719464909

This will save the tax payers $1.6T over 10 years. It will put money back into the economy, instead of sitting in a vault. It will prevent us from funding foreign banks. 

The end result is a win, win, win for America. Yet, somehow this is contreversial.

As Michael Hardner pointed out in the very first comment to your thread, your own link (the first one) points out the downsides of doing this. I'll quote the point I thought was most relevant:

**

Barclays and J.P. Morgan say Cruz's plan won’t deliver savings—it would just shift funds to the reverse repo market. The Fed would still be paying interest, undermining any deficit reduction. Worse, its ability to steer financial conditions would be impaired.

**

 

Source:

https://economictimes.indiatimes.com/markets/stocks/news/market-stability-threat-cruz-taps-trump-gop-allies-to-push-fed-overhaul/critics-sound-the-alarm/slideshow/121822156.cms

[gatomontes99]

1 hour ago, Scott75 said:

As Michael Hardner pointed out in the very first comment to your thread, your own link (the first one) points out the downsides of doing this. I'll quote the point I thought was most relevant:

**

Barclays and J.P. Morgan say Cruz's plan won’t deliver savings—it would just shift funds to the reverse repo market. The Fed would still be paying interest, undermining any deficit reduction. Worse, its ability to steer financial conditions would be impaired.

**

 

Source:

https://economictimes.indiatimes.com/markets/stocks/news/market-stability-threat-cruz-taps-trump-gop-allies-to-push-fed-overhaul/critics-sound-the-alarm/slideshow/121822156.cms

We are selling Treasury Bonds regardless of what the Fed Reserve rate is. At least, with Treasury Bonds, we are using the money to fund the government. With the reserve, we pay them to put money where it goes unused. It is doing nothing for the government. It is doing nothing for the economy. It is just sitting there. 

[Scott75]

8 hours ago, gatomontes99 said:

We are selling Treasury Bonds regardless of what the Fed Reserve rate is. At least, with Treasury Bonds, we are using the money to fund the government. With the reserve, we pay them to put money where it goes unused. It is doing nothing for the government. It is doing nothing for the economy. It is just sitting there. 

I fully confess that a lot of this stuff is over my head. However, I trust a certain journalist when it comes to currency issues- Ellen Brown. She just came out with an article talking about Trump's GENIUS Act and what she believes is the best solution:

https://scheerpost.com/2025/07/30/ellen-brown-the-genius-act-and-the-national-bank-acts-of-1863-64-taking-a-cue-from-lincoln/