The fed actually cannot be bankrupt. A good primer of the federal reserve, our fiat currancy and how it harms our entire nation can be found here:

http://video.google.com/videoplay?docid=3286459385978771924&q=federal+reserve&hl=en

I looked.  It's not the Fereral Reserve System but the Fereal Reserve Bank that controls our economy.  It's called the Central Bank System, or was.  It was started by John Adams and the currency was called "green backs".  A Central Bank was setup so that the Federal government could borrow money to finance itself.  At that time, the value was set by Government "fiat".  The value was whatever the government said it was.  The Central Bank was owned by a the private banks the Fed had previously borrowed gold backed currency from and could not pay back.  It was a privately owned bank.  Just as the Federal Reserve Bank is today.  It's a very long story.  Suffice it to say.... 

By the time Andrew Jackson became presedent, the Central Bank controlled the national economy.  Just as it does today.

Over his two terms as Presedent, Andrew Jackson removed the country from the Central Bank's control, and put the economy back in control of the public (read government).  It caused great economic pain and suffering to the country for eight years but after all was said and done, the United States of America had consitutional currency, backed by "coin" (silver and gold), as called for by the Consitution.  The Central Bank became, because of all the smaller banks that owned it, a bank regulation authority but had no conrol of the economy.  American paper dollars became "red" and "blue" backs representing gold or silver coin kept in the Federal Reserve Building at Fort Knox, Kentucky (a very large vault where the American treasure was stored) or a federally controled bank's vault.  You could take a Silver Certificate or Gold Certificate, that's what the paper was called, to any federally regulated bank and exchange it for silver or gold coin.  The "intrnisic" value of the paper limited the amount of paper that could be put in circulation at any one time.  Since the paper woreout quickly, sometimes too much paper would be printed, inflation, (I'm being kind to a dishonest government) and would cause a ressesion.  The paper would be collected and destroyed while less was printed or as in more than one case the dollar would be devalued, deflation.  At any rate, the intrinsic value of the Dollar prevented any, truly great, fluctuation of the Dollar's value.  It was honest money.

In 1913, the Federal Reserve Act setup the Federal Reserve Bank.  A privately owned bank where the weathy of Europe hid thier wealth because of WW1.  They didn't want to lose thier wealth to Germany. 

All this wealth was too great a temptation for the U.S. government to leave alone.  It had planned to use this money from the beginning.  Proof is the 1913 Tax Act, which was never fully ratified but became law anyway even though the Supreme Court had rule income tax unconsitutional in 1865.  Don't ask me how.  Maybe because it was supposed to be temporary.  So the funds were borrowed from the Europeans to fund America's entry into WW1 and American citizens were to pay it back through income taxes.  The rest is history when it comes to income tax. 

The war gave America a large surplus which drove the "Roaring Twenties".  That lasted about 12 years.  In the late twenties , the surplus ran out.  In 1929 the stock market crash caused the Great Depression.  That lasted until WW2 when a war time economy put most Americans to work either in the military or support of the military.  FDR took the country off the "Gold Standard" to finance the war.  We were left with our silver though and things were pretty good.  The war was paid for with our gold.  The government still used gold to pay debts world wide.  For instance, military bases in Germany.  But, the U.S. had another huge surplus after WW2!  Hot dog!  This boosted the economy, totally, into very good times.  But we never returned to the gold standard in this country.  The U.S. still traded and paid debts to foreign countries with gold.  That's why the U.S. Dollar became the standard currency of the World.

If you will notice, this country has been at war, somewhere in the world, ever since WW2 in order to maintain a war time economy. 

In 1950, the U.S. entered the Vietnam confict in support of France.  This was done covertly.  Nobody had to know because it was only with very limited personel and funding.  Our involvement grew until John Kennedy "activated" our military in Vietnam and sent our forces there to take over from the French. 

By 1969, the Vietnam Police Action, as it was called, had depleted our Treasury to the point of bankruptcy.  In 1971 Nixon stole the last of the people's intrinsic, silver certificates, money and switched to a script currency, printed by the Treasury, but issued by the central bank, the Frederal Reserve Bank.  A private bank owned by a bunch of Europeans who take billions in interest out of our pockets every year, tax free!  These are called Federal Reserve Notes.  They have no intrinsic value and the government can print all it wants with out "reserve".

The proffessor is right when he says the government can't go bankrupt.  In 1971, Nixon didn't say the government was bankrupt.  He said that the world Economies were doing it and we had to too.  But, in truth, he said that the Vietnam conflict had broke the U.S. and the Treasury could no longer back it's paper with real money.  So he stole the last of our real money and put the U.S. on money backed by "fiat" again.  The result is the U.S. has been bankrupt since 1971.  I say the government is bankrupt because, eventhough the Fed isn't supposed to, constitutionally, own anything other than a limited amount of property for military bases, post offices and government building, it seems that it now owns everything.  Try not paying income tax. 

And guess what?  The Central Bank controls the economy again.

And guess what?  The Dollar is not flat anymore.  It is experiencing a downward trend on world markets that will probably give the Euro the honor of becoming the new world monitary standard.

So now, not only is there massive inflation to pay for the war, National Health, Katrina and other such government expenditures but now the country is experiencing deflation on a world scale that could very well injure our economy quite seriousely.  Meanwhile the poor are, really, getting poorer and the rich....

So don't let anyone tell this bad currency the people have allowed the government to force on us is good.  It's NOT.  Congressman Ron Paul of Texas, how more inside can you get, has protested about this for years.  I would think he has a better handle in what's happened to our economy over the past 35 years than some guy who makes his living supporting a bad economic deal for the American people.

It would take a book to tell the whole sordid story and I don't feel like it.  You can go to this website: www.famguardian.org.  It's a Christian website that may give you some insight into the flim flammery the Fed has fed us over the decades.  Flim flammery relies on a person's ignorance and laziness.  Doesn't say much about the public in general.  It seems we have had our govenment converted from a Constitutionally Limited form to a Socialist Democracy.  A form of dictatorship.  If you want to see a Constitutional Republic that uses our constitution, word for word, look at Switzerlandt.  This is a country where our original form of government works.  It could work here too but it's probably too late to fix now.   Remember this government is run by lawyers.  The most dishonest people in the world, and they have stolen our country from us because we were too lazy to do as the founders suggested.  Keep an eye on the government and vote with knowledge of what the government is doing to you.  Keep this form of government if you can.  It takes work and you have to beware.  Me.? I think I'd rather watch American Idol.  For sure.

The govenment has never published the cost of any military action in the history of the United States.  Why should it now?

The fact is, the people have always paid.  What has it cost to keep our military in Germany, Japan, Korea, and everywhere else since 1947?  The govenment rents or leases all the facilities from that country where we keep bases.  It buys food and other supplies locally.  The military personel spend thier income locally.  It helps to prop-up the economy of country we are in.

What if all the military personel were brought back State Side?  Where would they find work?  Can you imagine the burden that this frail economy would have to carry?  And it is frail. 

During the Great Depression, the Fed was very wealthy and could spend to relieve the economy.  It didn't spend enough at any one time and the Deprssion went on longer than it should have.  It did force F.D.R. to steal our gold backed currency.

At this time, the Fed is bankrupt.  Has been since 1971 when Nixon stold our silver backed currency and put us on unconstitutional "greenbacks".  Currency backed by fiat instead of coin as the Consitution mandates.  The Fed has sold most of the gold reserve and much of the silver reserve.  All the Fed can do now is print more worthless Federal Reserve notes issued by a private bank owned by Europeans like the Windsors and Rothchildes.  How long can this go on for?  Not much longer, I suspect.  And when the it ends...We really will get to pay.  And pay.  And pay.

If you know these things and aren't angry, then you must be quite wealthy and not have to use money to live by.  Like Donald Trump who can go bankrupt and be a billionaire again within a year or less.  Now there's a guy who knows how to get wealthy!

Does it, really, matter what WE think about the war in Iraq?  Or, only what there Republicans and Democates in Federal office think?  What have these people ever done for the good of the country in the past fifty year?  Close your eyes.  What do you see?