The Federal Reserve Should Be Abolished

1) Constitutionality - The Fed does not violate the Constitution in any way. Congress has the right to coin money and regulate its value, the FED was created by Congress to serve just that purpose for Congress. Politicians themselves could not occupy themselves with the regulation of money because the primary job is to draft, vote on, and pass laws, so the Fed was created to fulfill the duties of Congress in regulating the value of money. The Fed is one of the many organizations that were designed by Congress to help Congress fulfill its duties designated to it by the Constitution. It is not an organization that seemingly was secretly authorized to take one of the most important and beloved responsibilities of Congress away from them..... http://www.house.gov... 2) The Pro makes many unsupported claims to the "evilness" of the Fed, Prior to its creation, the US economy suffered from a boom-bust cycle where there would be times where easy money could be made but then panics would occur where many banks would run out of money. Imagine the bank closures of the great Depression happening once every ten years and that was what it was like prior to the Fed's creation. the Fed was created to prevent this cycle which put the US economy at great risk. One of its main functions was to regulate banks so that those who put their money into them would be protected from losing it because of over speculation or over investment from the banks themselves. The Fed was created so that its actions would be independent of Congressional intervention so that in times of crisis (like in 2008) the fed could do what it felt was necessary to protect banks without Congress intervening and causing further damage to the financial institutions. It is not "unaccountable" though because even though it is independent of Congressional actions, it is subject to oversight by the U.S. Congress. The Fed must work within the framework of the economic and financial policy authorized to Congress The Fed is not controlled by private banks, those who run it are authorized to do so through extensive examination and assessment of a persons skills by both Congress and the President himself. http://www.federalreserve.gov... 3) The Fed does not create a boom-bust cycle of economics, it was in fact authorized to prevent just that and also was implemented to regulate banks and protect people who put their savings into them. The Fed did not cause the great depression, that was caused because mass production produced an over-abundunce of goods which maximized profits to those who owned companies, but not enough of that wealth was being put into the workers salaries and after international trade reached a new low following the damage of WWI the economy imploded. The Fed only regulates banks, not where the money goes, who gets it, etc. It could be argued that the Fed may have unintentionally contributed to the depression they certainly were not the underlying cause behind it. As for the national debt accusation, the Fed is designed to carry out the financial actions demanded by Congress, if they want to borrow money they authorize the Fed to make it happen, the Fed cannot question the actions of Congress and must willingly provide Congress with the borrowed money the requested. The national debt is how the Fed maintains credibility to the US financial system because the Fed makes Congress accountable for all the money they borrow so that the US does not lose its credibility to its financial system. Income tax is authorized by Congress, which they are authorized to do, and then they allocate that money to programs they wish to fund, the Fed does not get a large amount of that money they only determine its value and secure a small amount of it for overseas interest payments. Those payments help reinforce the credibility of US institutions on money that Congress borrowed, not the Fed. scrapping Income Tax and the Fed would put our government in MASSIVE debt, it would destroy our still decent credibility rating, it would leave vasts amounts of programs that help us unfunded, banks would be unregulated and run rampant with our money. Abolishing both the income tax and the Fed would be the breath of death for the US financial institutions. http://www.investopedia.com... http://money.howstuffworks.com... http://www.nytimes.com...