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.

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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.