The Federal Reserve System

Constitution The spirit and the letter of a piece of paper is irrelevant. The people that are sworn to protect the words matter. When those people believe that the Constitution is a living document anything is possible. The Constitution has three clauses that Congress, and courts can use to justify any law. Both major political parties support these ideas when in power. Amendments that you refer to as not "real", courts have ruled those amendments as "real". Politicians can not be retrained by a piece of old paper, the good of the collective is just too important. The 10th Amendment, a relic of the Bill of Rights. The implied powers in the Constitution's Necessary and Proper Clause, General Welfare Clause , and Interstate Commerce Clause make any action part of document. The states only have the power that the Federal government are willing the give them, the Supremacy Clause is used to justify this. Congress authorized the Federal Reserve to provide a financial system, that is exactly what it does. After a hundred years, if the Fed was unconstitutional it would have been ruled as that at some point by the courts. Monetary Policy Economists at the Fed are the best America has to offer. These economists have big degrees and prestigious positions of academia, centered around the study macro-economic theory based on ideas of John M. Keynes. Keynes' ideas are the main stream of economic study. Economists at the Fed know and understand what America needs, much better than self-interested businessmen. Inflation and fallacy of composition Individual savings is good for that person, but not for an economy. In an economy, savings are idle resources. Idle resources need to be employed to expand the economy. A statement that savings are good for a group is a fallacy of composition. Inflation motivates people to spend or invest hoarded legal tender before value decreases. For macro-economic measures this is a plus to GDP. With future legal tender having less value, inflation enables government and other borrowers to pay debts easier. The Fed supplies a target level of inflation to America's price levels to motivate hoarders and protect politicians. The opposition has a point about the information levels and education, "mis" should have been used instead of "un". Those properly educated in America were indoctrinated to support the central banking and central planning. Mis-informed and mis-educated that might think 2% inflation is not helpful to the economy need to step in line with the main stream of economic thought. As for stupid people, they too are also benefited by the Fed's hidden tax, (inflation is just that). Governments could not afford programs that support their lifestyle without continued inflation. Bank regulation Fiat legal tender banking system is extremely fragile and requires a highly regulated environment. Fiat currency will not be accepted in a free market of currencies, the government's must designate them as legal tender. Nonredeemable currencies do not have the restraints of scarcity thus nullify rules of supply and demand. An free market is just dangerous without the rules of scarcity. With a free market of fiat currencies, would allow banks to create as much money as possible at any time, the Federal Reserve limits this will tough standards and reserve requirements. The excesses of the 2008 Crises when a handful of banks were able to cause the longest recession since the Great Depression. The next round will be a conclusion, and responses to only new inquiries for the opposition.