The US needs to abolish the Federal Reserve.

First, I want to point out that you did not answer my question to you about providing a viable alternative to the Fed's many non-monetary policy functions. You have provided no solution to check-clearing, no solution to issuing paper currency, no solution to a place for the governments massive checking account, and no solution to a place for a bank to keep its reserves besides vault cash. If you want to throw out the Fed, you have to provide answers these questions. Second, lets stick to the point. Bringing up the IMF has nothing to do with a discussion on the merits of the Federal Reserve. Sticking in quotes from somewhat well known people does nothing to help your position either. Using someone with a severe ideological bias, like Milton Freidman (who I believe was a great economist by the way), is an appeal to a bad authority. You enter into a long rant about the banking industry and its evils. This would be appropriate if we were debating how banks should be run, but we are not. We are only talking about the Federal Reserve, so bringing up the evils of bankers before the Federal Reserve even existed, like bankers financing monopolistic corporations, is completely irrelevant. If you want to have a discussion on banking in general, entitle the debate as such. I am not here to defend the history of banking, nor would I. Now I will move onto fractional reserve lending. First of all, you failed to note that the Required Reserve Ratio is set and enforced by the Fed, and can be changed. The Federal Reserve can raise or lower the amount, currently at 10% for all liabilities over 43.9 million. The number goes down with decreasing liability size. Second, your statement "if you or i were to do that [loan out more money than we had on hand] its called fraud, which is a felony." This is not a fair comparison to banks because all legitimate banks are insured by the Federal Government. Lawmakers in this country decided banks would be allowed to conduct fractional reserve lending, and have also insured these banks so that people would not have to fear losing all of their funds if a "run" occurred. Now, should the Required Reserve Ratio be higher? Maybe, but once again, this is not a discussion on that particular issue. Third, the Monetary Reform Act is completely impractical. In the first issue, pay off the U.S. debt with debt free notes, how would this take place given the current debt in the United States? Also, this statement implies that somehow all debt is bad. Now, I think we would both agree that the state of our debt is out of control. However, some debt can be beneficial to our economy. Think, for example, the expansion of roads. These require high capital up front but relatively little later on. If the government were not allowed to get loans, it would have to spend years and years trying to scrape up the cash to build new roads. If they are allowed to get a large loan for capital, the whole process would proceed much quicker, and the government would still be able to pay back its debt over time. If everyone would be required to be debt free, how would anyone buy homes or start businesses? The same principle applies to the federal government. The second part, abolish fractional reserve lending; you maintain that as the debt would be paid off and the required reserve ratio was increased, the money supply would remain stable. This is an extremely complex economic problem, and you have given no data to support that there is a direct relationship between the U.S. debt, the required reserve ratio, and the money supply. I am not going to argue on what I think would happen because I recognize that this is an advanced economic problem. However, I can say that you cannot claim that the abolition of fractional reserve lending would be in such a direct proportion to the payment of the U.S. debt that the money supply would remain "stable". Third, repeal the Federal Reserve Act of 1913: as I have already said, you have not provided any alternative solutions to the other operations of the Federal Reserve which have nothing to do with monetary policy but are simply their to make our banking system more efficient and coherent. Fourth, the final point in the bill has nothing to do with our discussion. Throughout your response, you have made many economic claims which I would challenge. I am not saying you are wrong with these claims, but that if you do not provide any data or economic models to back up your claim, then I must assume you pulled it out of thin air. Here are the statements I would challenge you to provide me with data: "Money supply grows with population to keep prices stable ( if you didn't do that things would enter deflation period not good) 3% a year" "real reason for the revolutionary war took away the power to print our own currency!! the founding fathers understand the bank of england." "In the american colonies Shortage of silver and gold. 1760's start with own currency-colonial script not backed by anything, it was successful medium of exchange. Totally fiat currency" In summary, I think it is clear that you have an issue with the banking industry, but this is not relevant to our discussion. Lets stick to the merits of the federal reserve itself.