Debate Rounds (3)
Next is that the federal reserve caused many recessions, in fact, only 2 recessions happened not under the surveillance of a central bank, 4 others happened under the federal reserve, the second bank of the United states, or the first bank of the United States.
Third is that the federal reserve causes inflation, 100$ in 1832 equals 120$ in 1872, 100$ in 1940 equals 588$ in 1980, same time of inflation, but with the Fed we lose 5/6 our dollars value, without it we loose 1/6 our dollars value.
In response to your argument, I think it's foolish and inappropriate to consider anything as misfit for purpose purely because of the US Constitution. The Constitution is open to potential amendments and should not be treated as above criticism, therefore an idea should not be considered null purely because it violates the current version of the Constitution.
I also find it hard to understand why you believe the Federal Reserve has "caused many recessions". Seeing as you fail to substantiate that claim, I cannot adequately attempt to refute it. Finally, you attempt to condemn the Federal Reserve for inflation despite presenting any evidence to support your claim.
The Federal Reserve plays a vital role in preserving the stability of the money supply by protecting monetary stimulus from being used politically (and therefore inappropriately). Essentially, if the Federal Reserve was run by Government there would be an opportunity for politicians to manipulate interest rates in order to prompt further growth before an election to therefore boost public sentiment towards the Government. However, this expansionary monetary policy will promote inflation in certain circumstances, which of course is hurtful to the consumer. Maintaining an independent body to decide on monetary policy is therefore vital in preserving stable prices.
Apologies for the brief introduction.
1929 was a result of the federal reserve issuing a surplus of money, causing inflation, stock prices inflated, people bought stock thinking it would increase in value, causing a bubble, low interest rates allowed for loaning to buy stock, bubble pops, depression, same with 2008, just replace 1929 with 2008 and stock with houses.
The federal reserve is owned by the federal reserve board of governors, don't tell me you think unelected politicians are better than elected politicians.
Further, you claim that low interest rates caused the 2008 recession because it allowed cheap housing. This is so false it makes me wonder if you have any basic understanding of economics at all. Firstly, the financial crisis was caused by an array of factors. The most notable of these would be (in my eyes at least) the reckless lending and lack of regulation. To say however that the Fed caused the recession due to a loose monetary policy is ridiculous and I would find it interesting to read your explanation as to why you believe this.
Finally, the Federal Reserve is not "owned" by the board of Governors in any sense of the word. The board is selected and approved by the President and Congress, and they make key decisions regarding monetary policy based on their own expertise, not for political gain. They also report to the White House on the situation of the US economy. The Fed is also audited by Congress and, practically all profit made by the Fed is funneled straight back into the US treasury so I therefore not, in any practical sense, a private company. Though, you may be concerned that the Fed's stockholders are all privately-run banks. Understandable, but the 'stocks' that the banks hold cannot be traded, and the banks' only power is to appoint 6 of 9 of the regional board of Governors which run the day-to-day running of the local Fed (so in no way can influence monetary policy, which is entirely controlled by the national, Government appointed, Board of Governors).
The Fed is an invaluable, independent body and secures the legitimacy of American economic policy.
The Fed is a positive force that maintains American economic integrity and there seems to be no relevant counter-argument to.
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