Federal Reserve

I appreciate this opportunity to discuss the Federal Reserve system. Economics began as a complicated topic and has become increasingly intricate as populations, industries, and technologies have sprouted for centuries. The Federal Reserve is meant to buffer various side-effects of the complexity. Specifically this includes preventing banking panics, balancing between public and private responsibilities, regulating banking institutions, protecting the credit rights of consumers, maximizing employment, and stabilizing prices and interest rates. Strategic and educated reform is always warranted for complicated systems of government and business such as the Federal Reserve, and we ought to push our system to be more friendly towards the working classes. There are many who believe the most effective way to reform an economy is to eliminate and reinvent it, and those who took control of such nations as Egypt, Iran, and China in the last century have toyed with these ideas with disastrous results. Masses can starve and revolt in the time it takes to destroy and rebuild an economy. What leaders such as Franklin D. Roosevelt have proven is that reforming an economy through the existing systems improves lives accross the board. So my position regarding the Federal Reserve is that while there is always room for improvement, eliminating its existence would be extremely damaging. The Federal Reserve regulates long-term inflation. Inflation needs to be limited, but it serves a purpose. As the population rate explodes accross a century, so too does the many different types of jobs and methods of trade, and the need for more cash in the system increases exponentially. The Federal Reserve's regulations sometimes increase inflation and sometimes decrease it, depending on the government's assessment of what the economy needs, but inflation existed before the Federal Reserve and is not solely the product of Federal Reserve Policies. Congress could cut off ties between the Federal Reserve and the Treasury whenever it wishes; it is the choice of Congress - as Constitutionally provided in Article I Section VIII of the Constitution - that the Treasury continues to sell currency for the Federal Reserve to distribute to American banks. Whatever you think is the effectiveness of Congress - and we're all agreed it's very debatable - accountability to voters has repeatedly proven to be completely inneffective. The Federal Reserve cannot legally "pocket" the money it orders from the U.S. Treasury. There is a small slice defined as "profits" which is regulated by Congress, but even that belongs to shareholders. The Reserve essentially has to "purchase" the money it orders from the U.S. Treasury. J.P. Morgan and John D. Rockefeller did not help draft or propose the Federal Reserve Act. My opponent has no way of knowing how much of each Congressional Act was read by Congress, and has not quoted anything about what the Act or the Federal Reserve actually does. At this point I have no idea where my opponent is coming from. The U.S. GDP is just over $17 Trillion, and was less than $17 Trillion before the 2007 meltdown. Claiming that money has been smuggled to other countries is simply conspiracy. Goldman Sachs is a bank, not a CEO of the Federal Reserve. We are discussing the Federal Reserve, which didn't exist until 1913. Meaning four out of six of our recessions occurred without the Federal Reserve. Issuing additional currency does not change supply-demand ratios. The 2008 economic meltdown was caused by a chain effect from the repeal of the Glass-Steagal Act in 1993. Eliminating the Federal Reserve would have caused a comparable meltdown.