Is the Fed lending money?

I attended an LDS single adult fireside where Sen. Bob Bennett said that during the Reagan years the administration was looking for ways to cut the federal budget and in the process ordered a financial evaluation on the privately owned Federal Reserve.

The administration discovered that 100 percent of the entire country's federal income tax collections at that time were needed to pay off the interest on monies printed by the Federal Reserve for the Unites States government.

I've been perplexed by this whopping information and it has created a zillion-dollar question in my little mind:

If the Federal Reserve is simply a private owned printing company, is the federal government paying for the price of printing paper, or is it paying the price of the real money value of each bill printed, as if the Federal Reserve were a bank lending money?

Merlin Ross

Sandy