Fed Reports Payment Of $76.9 Billion To Government

WASHINGTON — The Federal Reserve paid the federal government $76.9 billion in 2011, the second highest amount in history. The central bank earned the money from investments made to bolster the U.S. economy.

The Fed says the 2011 payment is down from an all-time record of $79.3 billion made in 2010. A big part of the decline reflects lower earnings that the Fed made from its support for insurance giant American International Group.

The Fed began buying Treasury bonds and mortgage-backed securities during the recession and 2008 financial crisis to try to lower long-term interest rates.

Fed officials say such unconventional efforts are necessary until economic growth becomes stronger. Critics have charged that those purchases could ultimately contribute to higher inflation.