The Instigator
harrytruman
Con (against)
Tied
0 Points
The Contender
Brant96
Pro (for)
Tied
0 Points

Federal Reserve

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Voting Style: Open Point System: 7 Point
Started: 9/19/2015 Category: Economics
Updated: 1 year ago Status: Post Voting Period
Viewed: 436 times Debate No: 79890
Debate Rounds (3)
Comments (12)
Votes (0)

 

harrytruman

Con

First is that the federal reserve violates article 1 section 8 sentence 5 of the constitution which states that congress should manage the money, don't even try to say that congress controls the federal reserve because their own board of governors does,
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.
Brant96

Pro

I'll assume this debate is focused around the legitimacy and effectiveness of the Federal Reserve as a monetary regulator, seeing as the motion is unclear.

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.
Debate Round No. 1
harrytruman

Con

I want to make this very clear, we had six recessions in our history (1807,1837,1873,1893,1929,2008) 4 of 6 happened under the supervision of a central bank, 1807- First Bank of the United States, 1837- Second Bank of the United States, 1929, and 2008- The Federal Reserve.
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.
Brant96

Pro

"We had six recessions in our history" - that's just not simply true. Recessions are a natural part of the business cycle, and there's been more than 6 in the history of the United States. The dot-com bubble and the early 70's oil crisis are a couple just off the top of my head that you've missed out. Without getting into the issue of the Great Recession too much, it was essentially caused by a plummeting of confidence from investors that burst the stock bubble. The Fed should have loosened monetary policy to stimulate demand, but failed to do so until 1930. This potentially exacerbated the problem but by no means caused the recession.

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.
Debate Round No. 2
harrytruman

Con

That was a small financial problem in a business, not a nation, hence not sure recession, and yes loose economic policy did, I explained how earlier, you're not dumb go re-read it, and no I did not say low interest rates lower house prices, I said it enticed more loans, as you can see, I only reply to the statements that remotely make sence, the more we talk about your side of the debate the less it makes sense, the less prices are worth my time to answer, the shorter the argument.
Brant96

Pro

No, the dot-com bubble was not just one business, neither was the oil crisis. I'm starting to wonder whether you're trolling me. Two consecutive quarters of GDP contraction is a recession, so there have been many, many more recessions than you claim. I'm fairly certain the vast majority of my argument was coherent, so I don't understand why you won't attempt to refute it. Regardless, it seems you've watched one too many conspiracy theory documentaries and haven't done your research.

The Fed is a positive force that maintains American economic integrity and there seems to be no relevant counter-argument to.
Debate Round No. 3
12 comments have been posted on this debate. Showing 1 through 10 records.
Posted by harrytruman 1 year ago
harrytruman
s what, china has a high GPA, we don't try to role model after them, Mexico has a big GPA,
Posted by harrytruman 1 year ago
harrytruman
Everyone challenge me to a debate!
Posted by harrytruman 1 year ago
harrytruman
Oh come on, anyone could get a whack job website to say what they want, watch. In five minutes ill come to you with a link to Wikipedia.
Posted by Brant96 1 year ago
Brant96
Nice debating with ya though. Have a nice day :)
Posted by Brant96 1 year ago
Brant96
no relevant counter arguments to disagree*

was meant to be my last sentence, whoops.
Posted by Brant96 1 year ago
Brant96
But as i've just displayed, the Fed is audited, the Fed does report to the President. It's an independent panel of experts. Do your bloody research. I'm not even American and I known this stuff.

http://www.publiceye.org...

everything you need right there
Posted by harrytruman 1 year ago
harrytruman
Saying it regulates prices, saying it gets audited, saying it reports to the president, saying it isn't in power, etc, etc.
Posted by harrytruman 1 year ago
harrytruman
Saying I didn't support my saying it caused inflation even though I did.
Posted by harrytruman 1 year ago
harrytruman
Saying I didn't back my saying that the Fed caused recessions even though I did.
Posted by harrytruman 1 year ago
harrytruman
Blatantly saying it is a good regulator.
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