End the Fed
Debate Rounds (3)
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2) They are insolent enough to borrow government its own money, which created debt of 17,5 trillion dollars. (http://www.brillig.com...)
3) Fed keeps printing money that is backed up by absolutely nothing. Value of dollar is rapidly dropping. As soon as other countries stop using it as reserve currency, speed of dollar loosing its value will become significantly greater. US in on one way road to inflation.
BobTurner forfeited this round.
I will ask my opponent not to make any arguments or counter-arguments in round 3.
I will also ask judges to vote for me.
I will probably host this debate again sometime.
R1) He states the Fed is not regulated by Congress. This is a bold-faced lie.
One, Congress created the Fed, can end it tomorrow if they chose, and holds regular hearings with the Chairperson.
Two, the Fed is audited by the GAO and its financial statements/compliance is audited by the OIG, there are numerous checks and balances, its data is released regularly, etc.
R2) Pro's point makes no sense and connecting the debt to the Fed simply demonstrates that he, like his gold-bug buddies, have no idea of what they're talking about, which is why he resorts to using words like "insolent."
"Borrow government its own money" doesn't even make sense grammatically.
Anyway, the Fed does hold U.S. Treasury bonds. But the U.S. is the sole creator of the dollar, and countries that have national debts nominally denominated in their own currency -- U.S., Japan, Switzerland, etc. -- have never had problems with their debt burdens.
The debt is high, largely because George W. Bush put two wars, two rounds of tax cuts, a recession he caused by deregulating (by the way, the Fed was created to mollify the financial panics of the century prior to its creation), Medicare Part D, and defense contracts. None of this has anything to do with the Fed.
3) So a fiat currency is ipso facto bad? Does my opponent not know the history of the gold standard? The gold standard contributed to the Great Depression. If we were to go on a gold standard tomorrow, we would see deflation en masse.
Why is that a problem? Because prices would fall, wages would fall, demand would fall, people would become unemployed, wages would fall further, ad infinitum.
The value of the dollar is NOT rapidly dropping. All estimates show that it is rising (http://www.forbes.com...). At the same time, we need not consider the value of the dollar, but of wages. And inflation is below the Fed's two percent target, so my opponent's argument is unfounded.
He mentions "reserve currency." This is a talking point. It's utterly irrelevant because we don't rely on other countries purchasing dollars or converting their currencies to dollars in order to spend money. The Fed can simply take over.
Why is this not inflationary? It's simple:
1. We're in the zero lower bound, so interest rates can't fall any further anyway.
2. Real interest rates are negative, yet countries still trust the U.S. dollar.
3. As we run deficits or "monetize the debt," the economy expands. So the rate of increase of goods and services at least matches the rate of increase in inflation -- production might even increase faster, meaning we get deflation. We would only have runaway inflation if the economy didn't expand.
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