Elimination of the Fed is bad public policy

[ronpaulhawaii]

I got a request to comment on this blog by one our opponents (not Adam's race).

The Federal Reserve System (The Fed), created by Congress in 1913, is responsible for monetary policy, the management of money and interest rates. The Fed is made up of twelve Federal Reserve banks (Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, San Francisco), and the Board of Governors (7 members nominated by the President and confirmed by the Senate).

The Fed has three key functions; conducts monetary policy by attempting to affect the actions of banks through which the Fed can affect the money supply; clear checks and electronic transfers; serves as regulator for how banks can operate. The goal of the Fed is to maximize employment while maintaining stable prices.

Over time, U.S. politicians and policymakers have found it appropriate and reasonable to establish an independent central bank in order to maximize economic opportunity and growth in our economy. Across the planet more and more nations have recognized the same need and have established their own independent central banks. When it comes to interest rates and money supply, we don’t want elected officials, susceptible to persuasion by powerful forces and focused on re-election, to control such important factors for an economy. Similarly, free market forces led by human nature require an outside force to moderate human excess and depression. Such is the basic need for an independent central bank.

The Fed was not, as my main primary opponent suggests, created as part of a conspiracy theory, or a plank of the Communist Manifesto as an instrument to lord over the general population. The Fed does not create “debt-based” money. It backs up reserve notes established by the U.S. Treasury, it makes short term loans to member banks, and buy/sells Treasury bonds to manage reserves in the banking system. The fractional reserve banking we enjoy is the key to credit creation and the expansion of economic activity in the U.S., and is related to important economic concepts such as the velocity of money and the mutiplier affect.

To eliminate the Fed and reverse these activities would be an economic calamity, bring on stagnation, and return us to an economy of the 1800’s.

Since the creation of the Federal Reserve System, America has enjoyed the greatest wealth creation for the most people of any nation state before it. Over time, the Fed, led by human beings, has made poor judgments on interest rate levels, gone lax on risk regulations, and mismanaged the money supply, and will likely do so in the future. Yet still, since its’ inception, with its’ control over short terms interest rates (the Fed Funds rate), and use of open market operations to impact the lending behavior of banks, the Fed has been largely successful at smoothing out the peaks and troughs of economic activity motivated by millions of human beings acting as individuals focused on their own self interest. The Fed has been the key player in making sure the economic turmoil of the past three years has been reasonably contained.

The real problem for the Fed is the constant effort it must undertake to counteract poorly managed fiscal policy (government spending and taxation) coming out of Washington, D.C., like the subprime mortgage driven housing bubble, or the weakening of regulations imposed on the banking sector by regulators which are not part of the Federal Reserve System. With *** *** as your Congressman, leading a common sense fiscal agenda, the work of the Fed will be made easier.

The study of economics, and the actions of the Fed are about managing human behavior. Their role is reactionary in nature attempting to predict when human excess needs to be managed. That some may benefit more than others is not the result of a nefarious underlying agenda put forth by the rich and powerful, but rather the workings of a capitalist system. Ask yourself this; would you rather make $50,000 while the head of a bank makes $500,000, or make $5,000 while the head of a bank makes $25,000?

Class envy and warfare have no place in American society. Such is the implied position of my main primary opponent.

The request was:

Would you please do me a favor? We need some informed and well spoken folks to counter the assertions made by *** *** primary opponent today (link below). Would you mind commenting on his article please?

Anyone want to help?

 

[hugolp]

Its a very well written article. It lies, but its hard to attack.

I would do as I have seen do to Tom Woods in this situations. Attack the Fed for its results. We have had more deep depresions since the Fed is on than before. The Great Depresion, the 70's stagflation, Loans and Savings, the docom buble, the housing buble and the present depresion.

Also, I would say that crediting the growth of the USA to the Fed instead to the hard work of the americans is not a good idea (populist coments work ).

I would not go the conspiracy way when the article is so well written. Also, pointing out that the Fed is highly politized, there was an article here indicating that. Its beyond me how people think the Fed is really indpendent.

 

[low preference guy]

Don't advocate for the elimination of the FED. Advocate for letting the FED have some competition.

Advocate for giving people more ways to store wealth and transact. In other words, repeal legal tender laws and taxes on gold and silver. If the FED is doing a good job, people will use dollars. If they don't do a good job, people will move to other currencies. Let the FED have some market competition.

 

[eric_cartman]

i'll go though this point by point when i get the chance. but i read it and i could respond to most, if not all, of the claims they made

 

[fahayek]

Stable price? My grandfather had a wife and 9 kids, a house, a car, put most of his kids through school and was able to save enough money to retire in Florida....all with one salary working for the gas company. Try to do that now.

 

[eric_cartman]

paragraph 1: Yes, the Fed was created by congress in 1913... however, there is no authority in the constitution for a central bank... and most of the founding fathers were vehemently opposed to central banks.

paragraph 2: Even though the Fed's goal is supposedly to maintain full employment and stable prices... they have failed at both. The dollar has lost over 95% of its purchasing power compared to what the dollar was worth in 1913 when the Fed was created. There has been inflation for decades, and prices have steadily risen. A chocolate bar used to cost 5 cents... now they cost $1. Also, unemployment is very high right now. Unemployment was also high during the great depression, as well as during other smaller recessions over the last century. So the Fed has failed at both of their "goals". I would argue that these are not the Fed's real goals.... because the FEd is a private organization that works for the interests of those who own the bank. So i would agrue that the Fed's real goal is to protect the banking system, since it is the bankers who own the Federal Reserve.

paragraph 3: It is correct that we do not want politians to control interest rates... but this is not the only alternative to a central bank. Ideally, the free market would set interest rates, not a private central bank, or the government. However, the Fed is already highly politicized and does not seem to act indepently, because they always seem to accommodate the wishes of the Federal Government. I would argue that we do not need an "outside force to moderate human excess and depression" because that implies that a group of central bankers knows better than the market... and no matter how smart these people think they are, they are not smarter than the free market. Central economic planning has failed countless times, not because the central planners were stupid... but simply because it is impossible for central economic planners to know everything about the economy, and therefore, it is impossible for them to know what is best for the economy because the system is too complex to be understood by a select group of economists. Only the invisible hand is smart enough to know what to do. The author claims that the free market cannot set interest rates because humans can become emotional... but by that logic, would we also need someone to regulate the stock market? And this also implies that these central bankers are immune to emotions.

paragraph 4: well... the creation of the Fed was a conspiracy. A group of very powerful people conspired on Jekyll Island, in secret, to create the Fed. The Federal Reserve act of 1913 was also passed very close to Christmas time when most people in the government were at home with their families... so it was somewhat created in a stealth manner. Central banking is plank of the Communist Manifesto.

The second and thrid sentenses are factually correct.

You can have fractional reserve banking without a central bank. The merits of fractional reserve lending can be discussed at a later time, but all the points made in the last sentence of this paragraph do not really apply to central banking, and mearly argue the merrits of fractional reserve lending which is a different issue.

paragraph 5: Yes, if we were to "end the fed" overnight, there would be economic calamity... however, this would lead to greater economic growth once the system stabalized, not stagnation. The United States did not have the Federal Reserve from 1776 to 1913... and clearly there was not economic "stagnation" during this time... there was a great amount of economic growth. So why would there be economic stagnation now without a central bank, when clearly the economy grew when there was no central bank. And you could make the argument that we had a much sounder monetary system in the 1800s than we did in the 1900s. So going back to an older monetary system doesn't mean we would go back to 1800s technology and we will all be reading by candle light and riding horses. In fact, i think that prices were more stable and unemployment was lower during the 1800s without a Fed, than in the 1900s with a Fed.

paragraph 6: America has enjoyed the greatest wealth creation for the most people of any nation state before it, in spite of the Federal Reserve. We would have been even more prosperous without the Fed. Also, the country went through the industrial revolution without a central bank, and there was a lot of wealth and prosperty created from 1776 to 1913, which obviously occured without the Federal Reserve. In the second sentence, the author admits that the Fed has screwed up, and is likely to screw up again in the future... so maybe these guys aren't as smart as they are supposed to be? And it's because the Fed was "smoothing out the peaks and troughs of economic activity" that we have the crisis today. If the Fed had allowed previous recessions to run their course, the imbalances wouldn't be so big and we wouldn't have had such a sharp economic downturn over the last 3 years. So even though the Fed created the crisis that we are in now, the author claims that the Fed also contained the problem that they created. There is also sufficient evidence to suggest that the crisis is not over, and that the worst is yet to come... so it's premature to suggest that the Fed has contained this current crisis.

paragraph 7: the Fed enables the poorly managed fiscal policy. the subprime mortgage driven housing bubble could not have occued without the Fed artifcally lowering interet rates to 1%. Even though the Government played a part in creating the housing bubble, the Fed also played a very important role, and in fact, played a much more important role... and if the Fed had not artifically lowered interest rates, the sub-prime loans would not have been possible. And the banking sector would not need as many regulations if the Fed did not distort the entire banking sector with their low interest rates. But if you're going to set interest rates at insanely low levels, you sure as hell better regulate those banks because they're going to do all sorts of stupid things in response to the low interest rates.

paragraph 8: the Fed encourages human excess. The NASDAQ bubble and housing bubble were created by the Fed and their easy money policies. So if anything, the Fed is reactionary in nature, only because they react to problems they themselves created. Central banking and fiat money have no place in capitalistic system. And when the Fed bails out the special interests on wall st. it is very much the result of a nefarious underlying agenda put forth by the rich and powerful. When the Fed helps out one group by buying toxic assets, extending cheap credit, etc. this benefits those special intersets and harms others. This has nothing to do with capitalism.

People should make what someone is willing to pay them. So the amount of money people earn is based off of how valuable they are to their company. But when the government gets involved and gives special previlages to one company or one industry over another, than it's the government that is responsible for someone getting paid more than they otherwise would in a free market system. So i don't think that people should get paid more because the government gave them money in return for funding their campaign or because of some special relationship the individual or company has with the government.

paragraph 9: it is true that there is no place for class envy in America if those who accumulated the wealth did so legitamately in the free market system. But when certain groups lobby the government and use their influence in Washington and with the Fed to get speical deals... than the American people have every right to be upset. There is a big difference between a CEO who makes a lot of money working for a private company, and a CEO who makes a lot of money who works for a company that would have gone bankrupt had it not been for the money that was given to them by the government and the Fed. The government cannot just give their friends (who may have contributed to an election campaign) free bailout money from the Fed and special deals and then not expect Americans to be upset. It's not class envy... it's bailout envy. And there's a big difference. For example, i would have no problem if the CEO of Federal Express got a $100 million bonus, but i would certainly take issue if the Postmaster General got a $100 million bonus.


------------------------

ok... i did my best. hope that helps. feel free to take anything i've written and edit (i'm sure there's spelling mistakes in there), or add or subtract anything you want.

 

[ronpaulhawaii]

Thanks, guys Especially the detailed response, Eric. I'll form a response and we'll see how that goes. I didn't post the link because swamping it with comments might be counter-productive, but it may be beneficial to get a few voices in there at some point...

Again, much appreciated.

 

[ronpaulhawaii]

Our reply

By Michael M on March 3rd, 2010 at 4:37 pm
Your comment is awaiting moderation.

This is a well written article. I disagree with most of it, but must acknowledge the skill that Roche’s people show here. I will attempt a point by point rebuttal and show that, while many see the Fed as a destructive force in the economy, the focus of true Constitutional Conservatives is to bring increased transparency, accountability and competition to the Fed in hopes of allowing the free market to decide the best system. For certain, Roche’s idea that the un-elected bureaucrats, quasi public bankers, and a consortium of Private Banks are responsible for “managing human behavior” seems against the very principles that our great country is founded on.

Thomas Jefferson famously said:
The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.

Yes, the Fed was created by congress in 1913… however, there is no authority in the constitution for a central bank… and most of the founding fathers were vehemently opposed to central banks.

Even though the Fed’s goal is supposedly to maintain full employment and stable prices… they have failed at both. The dollar has lost over 95% of its purchasing power compared to what the dollar was worth in 1913 when the Fed was created. There has been inflation for decades, and prices have steadily risen. A chocolate bar used to cost 5 cents… now they cost $1. Also, unemployment is very high right now. Unemployment was also high during the great depression, as well as during other smaller recessions over the last century. So the Fed has failed at both of their “goals”. I would argue that these are not the Fed’s real goals…. because the Fed is a private organization that works for the interests of those who own the bank. So i would argue that the Fed’s real goal is to protect the banking system, since it is the bankers who own the Federal Reserve.

It is correct that we do not want politicians to control interest rates… but this is not the only alternative to a central bank. Ideally, the free market would set interest rates, not a private central bank, or the government. However, the Fed is already highly politicized and does not seem to act independently, because they always seem to accommodate the wishes of the Federal Government. I would argue that we do not need an “outside force to moderate human excess and depression” because that implies that a group of central bankers knows better than the market… and no matter how smart these people think they are, they are not smarter than the free market. Central economic planning has failed countless times, not because the central planners were stupid… but simply because it is impossible for central economic planners to know everything about the economy, and therefore, it is impossible for them to know what is best for the economy because the system is too complex to be understood by a select group of economists. Only the invisible hand is smart enough to know what to do. The author claims that the free market cannot set interest rates because humans can become emotional… but by that logic, would we also need someone to regulate the stock market? And this also implies that these central bankers are immune to emotions.

A group of very powerful people met on Jekyll Island, in secret, to create the Fed. This is well documented in a book by the name of “The Creature from Jekyll Island” and I encourage all readers to find, and read, this book. The Federal Reserve act of 1913 was, also, passed very close to Christmas when most people in the government were at home with their families… so it was somewhat created in a stealth manner. It is, also, relevant to note that central banking is plank of the Communist Manifesto. You can have fractional reserve banking without a central bank. The merits of fractional reserve lending can be discussed at a later time, but these points made by the author do not really apply to central banking, and simply argue the merits of fractional reserve lending which is a different issue.

Most agree that if we were to “end the fed” overnight, there would be economic calamity… however, this would lead to greater economic growth once the system stabilized, not stagnation. The United States did not have the Federal Reserve from 1776 to 1913… and clearly there was not economic “stagnation” during this time… there was a great amount of economic growth. So why would there be economic stagnation now without a central bank, when clearly the economy grew when there was no central bank. And you could make the argument that we had a much sounder monetary system in the 1800s than we did in the 1900s. So going back to an older monetary system doesn’t mean we would go back to 1800s technology and we will all be reading by candle light and riding horses. In fact, i think that prices were more stable and unemployment was lower during the 1800s without a Fed, than in the 1900s with a Fed.

America has enjoyed the greatest wealth creation for the most people of any nation state before it, in spite of the Federal Reserve. We would have been even more prosperous without the Fed. Also, the country went through the industrial revolution without a central bank, and there was a lot of wealth and prosperity created from 1776 to 1913, which obviously occurred without the Federal Reserve. In the second sentence, the author admits that the Fed has screwed up, and is likely to screw up again in the future… so maybe these guys aren’t as smart as they are supposed to be? And it’s because the Fed was “smoothing out the peaks and troughs of economic activity” that we have the crisis today. If the Fed had allowed previous recessions to run their course, the imbalances wouldn’t be so big and we wouldn’t have had such a sharp economic downturn over the last 3 years. So even though the Fed created the crisis that we are in now, the author claims that the Fed also contained the problem that they created. There is also sufficient evidence to suggest that the crisis is not over, and that the worst is yet to come… so it’s premature to suggest that the Fed has contained this current crisis.

The Fed enables this poorly managed fiscal policy. The sub-prime mortgage driven housing bubble could not have occurred without the Fed artificially lowering interest rates to 1%. Even though the Government played a part in creating the housing bubble, the Fed also played a very important role, and in fact, played a much more important role… and if the Fed had not artificially lowered interest rates, the sub-prime loans would not have been possible. And the banking sector would not need as many regulations if the Fed did not distort the entire banking sector with their low interest rates. But if you’re going to set interest rates at insanely low levels, you better regulate those banks because they’re going to do all sorts of stupid things in response to the low interest rates.

The Fed encourages human excess. The NASDAQ bubble and housing bubble were created by the Fed and their easy money policies. So if anything, the Fed is reactionary in nature, only because they react to problems they themselves created. Central banking and fiat money have no place in capitalistic system. And when the Fed bails out the special interests on Wall St. we have to wonder whether an there is an underlying agenda put forth by the rich and powerful. When the Fed helps out one group by buying toxic assets, extending cheap credit, etc. this benefits those special interests and harms others. This has nothing to do with capitalism.

People should make what someone is willing to pay them. So the amount of money people earn is based off of how valuable they are to their company. But when the government gets involved and gives special privileges to one company, or one industry, over another, than it’s the government that is responsible for someone getting paid more than they otherwise would in a free market system. So i don’t think that people should get paid more because the government gave them money in return for funding their campaign or because of some special relationship the individual or company has with the government.

While it is true that there is no place for class envy in America if those who accumulated the wealth did so legitimately in the free market system. But when certain groups lobby the government and use their influence in Washington and with the Fed to get special deals… than the American people have every right to be upset. There is a big difference between a CEO who makes a lot of money working for a private company, and a CEO who makes a lot of money who works for a company that would have gone bankrupt had it not been for the money that was given to them by the government and the Fed. The government cannot just give their friends (who may have contributed to an election campaign) free bailout money from the Fed and special deals and then not expect Americans to be upset. It’s not class envy… it’s bailout envy. And there’s a big difference. For example, i would have no problem if the CEO of Federal Express got a $100 million bonus, but i would certainly take issue if the Postmaster General got a $100 million bonus.

Finally, I want to thank you for allowing space for this rebuttal. I hope this has given food for thought to all readers and that conservatives can come together around our core values. A Free Market, Limited Gov’t, Low Taxes, and Individual Liberty.

 

[NightOwl]

Listen to George Selgin's talk from the Mises Institute's recent event "The Birth and Death of the Fed." His evidence is overwhelming. Best presentation I've come across.

 

[hugolp]

Listen to George Selgin's talk from the Mises Institute's recent event "The Birth and Death of the Fed." His evidence is overwhelming. Best presentation I've come across.

I am waiting for them to upload the videos to the YT channel. I hope they do it soon.

 

[surf]

People should make what someone is willing to pay them. So the amount of money people earn is based off of how valuable they are to their company. But when the government gets involved and gives special privileges to one company, or one industry, over another, than(then?) it’s the government that is responsible for someone getting paid more than they otherwise would in a free market system. So i don’t think that people should get paid more because the government gave them money in return for funding their campaign or because of some special relationship the individual or company has with the government.

not sure if it's uncool to make grammer or spelling suggestions, but since you're posting it as a response...

 

[wizardwatson]

Thanks, guys Especially the detailed response, Eric. I'll form a response and we'll see how that goes. I didn't post the link because swamping it with comments might be counter-productive, but it may be beneficial to get a few voices in there at some point...

Again, much appreciated.

Here's my reply. Probably not fit for actually posting anywhere but here.

The Federal Reserve System (The Fed), created by Congress in 1913, is responsible for monetary policy, the management of money and interest rates. The Fed is made up of twelve Federal Reserve banks (Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, San Francisco), and the Board of Governors (7 members nominated by the President and confirmed by the Senate).

The Fed has three key functions; conducts monetary policy by attempting to affect the actions of banks through which the Fed can affect the money supply; clear checks and electronic transfers; serves as regulator for how banks can operate. The goal of the Fed is to maximize employment while maintaining stable prices.

Congrats, you have a computer with an internet connection and can look stuff up.

Over time, U.S. politicians and policymakers have found it appropriate and reasonable to establish an independent central bank in order to maximize economic opportunity and growth in our economy. Across the planet more and more nations have recognized the same need and have established their own independent central banks.

Yes, we're all jumping off the same bridge. Just because U.S. politicians and policymakers find something "appropriate and reasonable" doesn't make it so. Going further and saying that they are doing said deed "in order to maximize economic opportunity and growth in our economy" is really jumping the shark. Even insinuating that it's a "politician" or "policymaker"'s job to lead or "steer" the economy makes me throw up a little in my mouth every time I hear it. It's obvious the author has a very liberal interpretation of the Commerce Clause.

When it comes to interest rates and money supply, we don’t want elected officials, susceptible to persuasion by powerful forces and focused on re-election, to control such important factors for an economy.

You're right, these things are waaaay too important. Better to just give the "powerful forces" direct control. Jackass.

Similarly, free market forces led by human nature require an outside force to moderate human excess and depression. Such is the basic need for an independent central bank.

These two sentences show that the author has a "basic need" for some education in economics. I mean what is this..."free market forces led by human nature require an outside force to moderate human excess and depression".....Is this from his Russian Command Economics 101 class? Sorry, Jerky, the jury's still out on the cause of the business cycle.

The Fed was not, as my main primary opponent suggests, created as part of a conspiracy theory, or a plank of the Communist Manifesto as an instrument to lord over the general population.

Here he's pretty much correct. It was created pretty much out in the open by rich bankers "as an instrument to lord over the general population."

The Fed does not create “debt-based” money. It backs up reserve notes established by the U.S. Treasury, it makes short term loans to member banks, and buy/sells Treasury bonds to manage reserves in the banking system.

Semantics. In the next section author points out that fractional reserve banking is "the key" to "credit creation". Translation: Fed system creates money. What kind of money? Well "credit" money. What's "credit" money? That's money that one person owes to another, you know....."debt-based".

The fractional reserve banking we enjoy is the key to credit creation and the expansion of economic activity in the U.S., and is related to important economic concepts such as the velocity of money and the mutiplier affect.

Uh...ok? So the Fed is 'related' to important economic concepts that have something to do with the Fed? Is this the author's way of saying the Fed is important because it deals with important things?

To eliminate the Fed and reverse these activities would be an economic calamity, bring on stagnation, and return us to an economy of the 1800’s.

You forgot that it would also...destroy every job in the world, plants would stop growing, the polar ice caps would melt, and the earth would probably be thrown from its axis and go into a tailspin right into the sun.

Since the creation of the Federal Reserve System, America has enjoyed the greatest wealth creation for the most people of any nation state before it.

Yeah, it was all the Fed. Technology and oil didn't have anything to do with it.

Over time, the Fed, led by human beings, has made poor judgments on interest rate levels, gone lax on risk regulations, and mismanaged the money supply, and will likely do so in the future.

Hmmmm. Very interesting. There could be a lot of reasons for these poor judgements and lax regulations. Perhaps because the Fed has lobbyists? Perhaps because all they care about are the bank profits?

Or maybe they are just like the author and don't have a clue about economics.

Yet still, since its’ inception, with its’ control over short terms interest rates (the Fed Funds rate), and use of open market operations to impact the lending behavior of banks, the Fed has been largely successful at smoothing out the peaks and troughs of economic activity motivated by millions of human beings acting as individuals focused on their own self interest. The Fed has been the key player in making sure the economic turmoil of the past three years has been reasonably contained.

Make up your mind author. Is the Fed the driver of economic progress as you keep insinuating (see section above), or is it the "smoother outer" of "peaks and troughs"? You can't have it both ways.

The real problem for the Fed is the constant effort it must undertake to counteract poorly managed fiscal policy (government spending and taxation) coming out of Washington, D.C., like the subprime mortgage driven housing bubble, or the weakening of regulations imposed on the banking sector by regulators which are not part of the Federal Reserve System.

The author is really starting to get on my nerves, thankfully the paper's nearly over. As if these ignoramuses don't understand that it's the Fed that itself "allows" the poorly managed fiscal policy!!! And the audacity to insinuate that "weakening of regulations" wasn't desired by the banking industry in order to capitalize on the fact that Uncle Sam would back everything up anyway!!!

With *** *** as your Congressman, leading a common sense fiscal agenda, the work of the Fed will be made easier.

I hope *** *** 's "common sense fiscal agenda" has a hell of lot more common sense than this paper.

The study of economics, and the actions of the Fed are about managing human behavior.

FAIL. I mean really, does this even need a comment?

Their role is reactionary in nature attempting to predict when human excess needs to be managed. That some may benefit more than others is not the result of a nefarious underlying agenda put forth by the rich and powerful, but rather the workings of a capitalist system.

I love how everything in the author's world is solved and makes perfect sense. If the Fed's actions cause some to benefit more than others, well that's not because of the evils of the Fed, that's just capitalism hard at work. What's that you say? The imbalance wouldn't have existed without the Fed's actions? Wrong sir, the Fed is "purely reactionary". What you perceive as an act which imbalances, is merely the Fed "reacting" to an imbalance which already existed.

George Orwell ain't got nothin' on this guy.

Ask yourself this; would you rather make $50,000 while the head of a bank makes $500,000, or make $5,000 while the head of a bank makes $25,000?

I'll take "Reasons why the author of this paper is a moron" for $500 Alex...

If you are a moron like the author, you would say "I'd take the $50K". But why in the hell would you want to live in a world where-all things being equal-a fatcat banker makes 10 times more than you rather than 5 times more than you? I guess in the author's world, making money that has lots of zeroes on the end is preferable to fewer zeroes, even if the income disparity is wider? He'll be in paradise if hyperinflation ever comes our way I guess. Maybe he should move to Zimbabwe, I hear they're incomes are out of this world. Anyway, my bile ducts are at capacity, hopefully this hair-brained ignoramus is nearly done.

Class envy and warfare have no place in American society. Such is the implied position of my main primary opponent.

Straw man. And besides that, it isn't class envy/warfare to say that bankers occupy a privileged position in the economic strata because of the structure of the Federal Reserve system, it's just the truth.

 

[Ninja Homer]

Our reply

Great reply!

Some things I would have considered adding:
The best solution to ending the Fed is to legalize competing currencies. If the federal reserve system is really the best possible monetary system, then let it
Almost half of the US national debt is owed to the Federal Reserve... interest on the money they create for the US.
The Fed is privately owned by banks, and most of those are the "too big to fail" banks that were bailed out. So the bank bailout was essentially the banks that own the Fed printing money out of thin air, giving it to themselves, and then collecting interest on it from US taxpayers.
G Edward Griffin - Creature From Jekyll Island video (42 minute version): G Edward Griffin - Creature From Jekyll Island A Second Look at the Federal Reserve