The Instigator
DoctorZhiva90
Pro (for)
Losing
3 Points
The Contender
imabench
Con (against)
Winning
10 Points

The Federal Reserve Should Be Abolished

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Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
imabench
Voting Style: Open Point System: 7 Point
Started: 11/2/2011 Category: Economics
Updated: 5 years ago Status: Post Voting Period
Viewed: 3,144 times Debate No: 19105
Debate Rounds (4)
Comments (6)
Votes (3)

 

DoctorZhiva90

Pro

Round 1 for acceptance, Round 4 for rebuttals. I'm no economics expert, I'll say that up front. However, from all that I've read, I don't think it takes one to realize that the Federal Reserve is hurting the US economy, and has done so ever since its creation in 1913. It pains me to see the OWS protesters going on about capitalism and free market as the reason for disproportionate wealth. I will prove that it is the Fed that is responsible for such inequality, along with other measures which drastically hurt the US economy as a whole. From this contention, I will prove that all the problems caused by the Federal Reserve are grounds for it to be removed and replaced by a more preferable system like the gold standard.

Conditions
Pro must prove that there are compelling reasons to end the Federal Reserve, and that its abolition would provide a more stable economy. Con must prove that there are compelling reasons to keep te Fed, due to the fact that its removal would hurt the econoy even more.
imabench

Con

I Accept the debate
Debate Round No. 1
DoctorZhiva90

Pro


Thanks for accepting imabench.


I am taking the stance that the Fed needs to be ended for the sake of preserving economic prosperity and controlling the unbridled greed of the international banksters. My position rests on three main premises: that the Fed is UNCONSTITUTIONAL, SECRETIVE, and HARMFUL.


UNCONSTITUTIONAL


This is quite possibly the simplest way to definitely prove that the Fed should be abolished. After all, if an entity is unconstitutional, it cannot exist unless the Constitution is amended to allow for it. In the case of the Fed, Article I Section 8 explicitly delegates the power to “coin money and regulate the value thereof” to Congress. So then, you may ask, is there some sort of hidden amendment or law that somehow doesn’t violate this clause? The answer to that is no: the Fed essentially possesses a power specifically reserved for Congress. Even if the Fed were acting in the best interest of the American people (a far cry from what they are doing), their very existence would still be unconstitutional as per Article I Section 8. I challenge my opponent to justify the Fed’s clear violation of this portion of the Constitution.


SECRETIVE


Theoretically, if my opponent cannot prove that the Constitution permits the Fed to exist, my argument for abolition is completely valid. However, there is still a lot to be said about the Fed’s evil manipulation of money in order to benefit the international banks. The worst part about all this is how much secrecy has shrouded the Fed’s immoral actions. In its nearly 100 year history, the Fed had never once been audited until 2011, in the wake of the massive financial crisis. The findings were mind-boggling: nearly $16 trillion dollars in secret bailouts for banks across the world, all while the small banks and average American citizens were left to struggle. As Sen. Bernie Sanders noted, “This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else.” None of these bailouts were ever approved by Congress, even though the Fed is the principal agency containing the U.S. money supply. However, these under-the-table transactions encompass the secretive nature of the Fed, all while it remains unaccountable to the federal government. Despite having “Federal” in its name, the Fed is not at all controlled by the government, but rather the strongest private banks. Being that the Fed is simply a cartel of banking corporations, what is the logical objective of the Fed? Turning a profit, of course. Their malicious agenda is hidden by the fact that the banks that own the Fed also have shares in the major media outlets, thus suppressing any damaging information from leaking. It is completely mind-boggling that the institution controlling the nation’s monetary policy is not only unregulated by Congress, but for nearly a century went without even an audit of its records. This kind of behavior is downright criminal, as it permits the Fed to do what it wishes with its money to make a profit and benefit the banking families who control it. There is no evidence suggesting that the Federal Reserve has the interest of the American people in mind (no trillion dollar bailouts for all the struggling citizens). This leads to the conclusion that the Fed deceives and exists in dangerous secrecy, therefore promoting even further grounds for its abolition.


HARMFUL


Now comes the brunt of my contention. The Federal Reserve’s inner mechanisms and unbridled control foster a boom-and-bust economic cycle which predictably leaves the international banksters well-off. To illustrate, the Great Depression will be examined as to the Fed’s role. In short: the Fed caused it, as chairman Bernanke has admitted himself. But the same corrupt actions taking place then still bear relevance today.


During the prosperous periods of the early and mid 1920’s, the Fed continuously printed money and increased the money supply, with low interest rates as well. The abundance of money promoted widespread buying and loans, which in turn led to economic boom of the “roaring twenties”. During this boom, the connected banksters and other insiders knew about the Fed’s goals. Therefore, they bought lots of stock and assets during the boom period. Then in 1929, the Fed subversively rose the interest rate. This planned “bust” portion of the cycle prompted the insiders to exit the market. In a long cycle of events, the stocks and loans which were previously bought up in mass were sold rapidly once the high interest set in. The Great Depression is almost never blamed on the Fed when taught in schools, but in reality the Fed’s artificial manipulation of boom and bust cycle was the cause of the Great Depression, as Bernanke admitted. The same principles translated to the recent economic crisis, only this time some of the Fed’s insiders did fail and were given massive bailouts to compensate. I ask my opponent to really think about whether such a deceptive and fraudulent system, which has historically allowed the banksters and other insiders to stay wealthy even in economic crisis, is meritorious and deserves to be kept.


Secondly, the $14 trillion national debt is entirely present because of how the Fed operates. To say that the United States spends massive amounts of money is incorrect. Because the Fed has a monopoly on the nation’s money supply and gold reserves, the government relies on the Fed for its money. The Fed makes a profit every time the government needs money, and with the massive rise in government spending and new agencie over the years this need for money has grown. More need for money = more profit for the Fed. If the government asks for $1 billion dollars, the Fed “prints” the money, and charges the government interest in paying back this loan. This process repeats, and the eventual result is huge profits for the banking families and a large deficit in the US budget. Because our currency is backed by nothing, the Fed can create worthless paper notes or computerized entries. Such practices promote more reckless government spending due to the ease of obtaining money. But how does the federal government obtain this money to pay off the Fed loans? Simple: income tax. That’s right, when people say how their tax dollars were wasted on the bailout or the war in Iraq, they’re wrong. Instead, 25-35% of people’s incomes are demanded every year by the IRS under the threat of strict penalty. The paid income tax then exclusively goes towards paying off the interest on the Fed’s loans. Of course, now that the currency has become so devalued, income tax doesn’t make much of a dent in paying off the immense national debt. Now, I want my opponent to consider whether it is right or necessary that millions of hard-working Americans are required to pay nearly a quarter of their yearly income for a purpose that could easily be scrapped if the Fed didn’t exist. Why should the American people be threatened with salary garnishment to their modest salaries so that they can contribute to the overblown profits of the bankers? It’s no coincidence that income tax was introduced in 1913 along with the Fed. Income tax should be abolished along with the Fed that it keeps in power, since it takes out massive chunks of people’s earnings to foster a private corporation that makes a profit from collecting interest from the governments? Simply put, both income tax and the Fed should be scrapped in the interest of economic prosperity. With a reduction of the currently circulating Federal Reserve notes, plus return of monetary policy control to the Treasury and Congress, our national deficit could be obliterated in a short amount of time. With no interest rates on the money, there would be no need for income tax either, promoting generally increased prosperity among the people. I intend to focus more on the solution once the Fed is abolished, but for now I have outlined a compelling case proving that the Fed’s detriment to the economy justifies its end.


imabench

Con

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...
Debate Round No. 2
DoctorZhiva90

Pro


Just as an FYI, all my sources will be posted in the comments section.


Constitutionality


Just because something was created by Congress for a specific purpose does not make it constitutional.


“Congress has the right to coin money and regulate its value, the FED was created by Congress to serve just that purpose for Congress.”


It has been made very clear by the Supreme Court that the Fed is too private of an entity to be considered a federal agency. Lewis v. United States (1982) ruled that the Federal Reserve and its subdivisions are "independent, privately owned and locally controlled corporations", and there is not enough "federal government control over 'detailed physical performance' and 'day to day operation'" of the Federal Reserve Bank for it to be considered a federal agency. This lays to rest my opponent’s contention that the Fed serves any kind of purpose for Congress. If Congress had a significant role in regulating the Fed, then there would be no constitutional question to its existence. But if the Fed is so independent that it cannot be considered a federal agency, then it is indeed possessing a power constitutionally granted to Congress, thus making the Fed unconstitutional.


Claims of the Fed’s evilness


“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.”


This is false. The highest amount of bank failures in a pre-Fed economic panic was 598, during the panic of 1893. And this was an extreme, 5 times the amount of the panic with the second most bank failures pre-Fed era. The Great Depression, by contrast, saw nearly 5,000 banks fail, all while the Fed did indeed exist. [1] Therefore, the contention that we would have a Great Depression every ten years without the Fed is unjustified. Also, to briefly address a point I will get to later, it is interesting that after the creation of an institution which was supposed to stabilize the economy, America ended up with its worst ever financial crisis in 1929, and is currently undergoing a prolonged recession in which the US received its first ever credit rating downgrade. And what is the oh-so-benevolent Fed’s role in all this? As can be proven, they exacerbated the Great Depression and are not helping the US economy towards recovery today.


“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…”


Is it necessary to print endless money and give out $16 trillion in “financial assistance” to US and foreign banks? And why should these private banks have control of our nation’s money without Congressional oversight? When you consider that many of the Fed’s governors, along with the Fed itself, have intimate ties to these big banks, this idea that it was necessary to put out this much money becomes a falsehood. Consider this:



  • The CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed.

  • William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds.

  • During the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.


In all of these cases, the Fed provided conflict of interest waivers to make their actions legal. To me, this is not necessary action, but instead dishonest and selfish action that clearly was meant to support the big bankers who have significant governance in the system. This is definitely a financial system that has not acted in our best interest, as it magically created $16 trillion out of thin air for the banks all while numerous businesses shut down and people went unemployed. This created money also contributed to a growing national debt and further inflated the money supply. To me, this corrupt system keeping bankers well afloat is something we can do without. [2]


“The Fed must work within the framework of the economic and financial policy authorized to Congress.”


The Fed is what creates the monetary policy, i.e. interest rates and amount of money in circulation. [3]This isn’t Congress’s job at all.


“The Fed does not create a boom-bust cycle of economics, it was in fact authorized to prevent just that…”


It was never placed to “prevent” the boom-bust cycle, as that is a natural part of a free-market. With the Fed in place, they manipulate the boom-bust cycle instead of letting it play out by itself. Consider the first graph on this site: . As can be seen, every time the Fed has increased interest rates, an economic depression has ensued. They originally set low interest rate, encouraging start-up businesses to take out loans to get capital. When they hike up the interest rates, this damages the vulnerable start-up businesses, who don’t have the necessary money to pay back the now high interest rate. Thus, they shut down and lay off their workers. Meanwhile, big corporations are relatively unaffected by the hike. Indeed, the Fed’s control of the interest rates has irrefutably been a major factor in causing an artificial boom-bust cycle. [4]


“The Fed did not cause the great depression, that was caused because mass production produced an over-abundunce of goods…”


My opponent has accepted the simplified version taught in history class, something that Milton Friedman and Anna Schwartz have disproven. Their research has shown that if the Fed had not existed during 1929 and made poor policy decisions, the Great Depression wouldn’t be the landmark economic depression that we know it as. When people rapidly pulled out their money from banks (due to the stock market crash from the factors you mentioned), rapidly decreasing the money supply, the Fed did nothing to counteract this, such as buying government bonds. Before the Fed’s creation this role of “private clearinghouse” was with commercial banks. Now this role was gone from them, and as Friedman/Schwartz noted, the Fed failed to perform this duty; thus, the Fed was the primary cause of how bad the 1929 crash ended up. [5]


“Income tax is authorized by Congress, which they are authorized to do, and then they allocate that money to programs they wish to fund…”


Not true. A 1984 report from the Congressional Research Service found that 100% of income tax revenue is absorbed by the Federal Reserve due to the interest on its worthless paper currency. Thus, no money is ever allocated by Congress to the programs like defense and education that taxpayers believe. So essentially, people are paying around 30% of their income in order to facilitate an institution which has proven to be unhelpful in promoting stability . I’m not against paying taxes, but this high percentage is completely ridiculous and unnecessary when you consider what it goes towards. [6]


My opponent contends that scrapping the Federal Reserve would leave some programs unfunded. Perhaps this would be a good thing: if Congress can’t borrow money created from nothing, they would reduce wasteful spending on programs we don’t need. The Fed has no value in economic stability, and has devalued the dollar by 96% since its creation. A return to the gold standard, with the Fed's gold reserves liquidated and revalued, would provide stability to the money supply, since there would be no reckless inflation from worthless Fed paper notes. Indeed, a gold standard is the only constitutional system according to Article I Section 10. It also has many advantages over the unconstitutional printing of worthless money. There would be very few drastic fluctuations in the currency's value, and without an official lender of last resort, banks would have to be more responsible for their actions, or else liquidate and pay off their depositors. [7]


imabench

Con

http://nesara.org...

The Fed was clearly ruled as an independent agency but the Pro failed to mention other facts about the case. Even though it was ruled to not be a government agency, the Fed is "..... a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect 2/3rds of each Bank's 9 member board of directors. The remaining 3 directors are appointed by the Federal Reserve Board. The Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors." The Fed is not privately owned by malicious filthy rich bankers liek the Pro is trying to suggest

The Fed carries out a federal action even though it is not a federal agency, so it is very constitutional even though it is designed to exercise a power given to Congress.

Prior to the Fed's creation, panics in the 1800's caused hundreds of banks to close at a time during every panic, creating a very unstable economy. After the Fed was created the number of bank failures that occurred from panics dropped significantly compared to years before, the Pro only used the example of the Great Depression to try to prove me wrong.

http://www.thefreemanonline.org...
http://www.federalreserveeducation.org...

If the Fed thought their loans were necessary to prevent the worsening of a devastating depression then who are we to say otherwise? If anyone knows anything about financial institutions it sure as hell wouldnt be us young adults or any congressmen, it would be the people who have worked in the financial system for a long long time and run perhaps the largest financial system in the United States. You claim that their actions were dishonest in your opinion, but that is just your opinion now isnt it.

"The Fed is what creates the monetary policy, i.e. interest rates and amount of money in circulation. [3]This isn't Congress's job at all." Congress has the power to coin money and determine its value, the Fed does this for them because it is their job assigned to them by Congress.

The chart you failed to mention in your debate but is listed instead in your comments does not provide concrete evidence that an increase in interest rates has triggered a financial recession, if you look at the site here

http://www.libertyforlife.com...

You can see it is easily biased and if you look at the years 1958, 1967, 1973, 1984, 1987, 1992, 1999, and 2004 you can see that raises in interest rates did not trigger a recession. In fact in some instances on the graph the interest rates FALL right before a recession occurs.

You can see here how there are many cases where interest races have risen and a recession has not occurred.
http://www.google.com...

The Con is trying to argue how the Fed was the sole cause of the Great Depression which is a glorified lie if Ive ever seen one. The Fed played a role in being unable to avert the crisis (the Fed at the time was barely 25 years old), but there are many other causes of the Great Depression,
1) Debt inflation
2) Bad investments from banks that lost people their savings when the loans failed
3) Rampant speculation and investments into stocks that were very unstable and dangerous investments
4) Increase mass production of almost all goods causing costs to fall, this was great for huge companies but for farmers who had to now increase their harvests year after year to keep up it was a death sentence
5) Environmental disasters such as the dust bowls and droughts in the mid west that destroyed prarie life for millions of people.
6) A breakdown in international trade and exchange
7) war loans given to countries damaged from WWI that were not repaid which cost banks loaning that money billions

There are many other reasons for the cause and worsening of the great depression, but the Fed was not the sole or largest cause as the Pro suggests

"My opponent contends that scrapping the Federal Reserve would leave some programs unfunded. Perhaps this would be a good thing: if Congress can't borrow money created from nothing, they would reduce wasteful spending on programs we don't need"

The Pro has admitted that the elimination of the Fed would leave government programs unfunded, which i believe falls under the category of "damage to the economy" The Pro suggests that we should disregard this by simply saying how "it would reduce wasteful spending"

It is not guaranteed to reduce spending, it could just as easily force the government to borrow even MORE money and would add that to the already inflated national debt, which would do more harm to our economy, our credit, our budget, etc.
Debate Round No. 3
DoctorZhiva90

Pro


Thanks for a great debate!


My opponent has offered a shocking amount of apologism and defense for a system that is corrupt to the core and has no business wielding the power that it does. I am astounded that after all this evidence showing that an external body has the willpower to do whatever they wish with the nation’s money, creating debt and instability along the way while they rob the middle class with income tax, my opponent still sticks up for the Fed as a benevolent institution that acts in the best interest of the country. I’ll start out by rebutting many of his arguments presented last round.


Even though it was ruled to not be a government agency, the Fed is "..... a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect 2/3 of each Bank's 9 member board of directors…The Fed is not privately owned by malicious filthy rich bankers liek the Pro is trying to suggest”


Isn’t that what the facts you just presented point to? Just because they don’t physically own it doesn’t mean that the bankers don’t exercise a significant amount of control over the day-to-day affairs of the Fed banks. Plus, these are “stockholding banks”, which essentially amounts to combined ownership by the commercial banks. The main point I make by bringing up the Lewis case is to demonstrate that the Fed is most definitely an unregulated agency, unlike what Con tried to suggest earlier. This complete lack of regulation lends itself to the stockholding banks having relatively unrestrained power to enact whatever policies they wish. The commercial banks have the power to elect the majority of each Fed branch’s board members. Common sense dictates that the banks will naturally select individuals who will serve the bank’s self-interest, which is usually at odds with what benefits the general citizenry.


On the topic of regulation, I’ll bring up a glaring inaccuracy in one of my opponent’s points. He states that “Congress has the power to coin money and determine its value, the Fed does this for them because it is their job assigned to them by Congress.” First off, our money has no value since we have a paper currency backed by nothing. In the days of the gold standard, a dollar was 1/20 of a gold ounce, which is not the case anymore. Also, “coin” essentially means “print” in today’s system, which is the sole power of the Federal Reserve. Therefore, Congress has none of these powers. My opponent is trying to contend that Congress still technically has these powers just because they have delegated the responsibility to the Fed. If the Fed had some degree of regulation by Congress, then this argument might be valid. However, as the Lewis case determined, the Fed is so independent that it cannot be considered a federal agency. If Congress were to allow individual states to declare war (a power of Congress outlined in A1 S8) without having any say at all in the process, this would indeed be unconstitutional. The same principle applies to the Fed.


Also, Con claims that I am trying to unfairly use the Great Depression to “prove him wrong” about the pre-Fed era panics. If he recalls, he stated in Round 2, “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.” I merely proved that this was a patently false claim with bank failure statistics. Indeed, none of the panics before the Fed ever approached the conditions of the Great Depression’s 5,000 failures, which occurred under the Fed after it had been solidly established.


“The Con is trying to argue how the Fed was the sole cause of the Great Depression which is a glorified lie if Ive ever seen one…there are many other causes of the Great Depression…”


So the opinion of a Nobel-prize winning economist (Friedman) is just a glorified lie? Plus, I never said it caused the Great Depression to initiate. I realize that all the factors you listed caused it to initiate. The Fed had nothing to do with it starting up. Friedman’s contention is that the Great Depression would have just been the Panic of 1929 if the Fed hadn’t made some poor monetary policy decisions that did nothing to control the rapid contraction of the money supply from bank failures. In other words, without the Fed’s existence, private clearinghouses could have done what the Fed didn’t do, and the worst economic depression in US history would have been much more mild like the panics before the Fed’s creation. Chairman Bernanke himself has accepted this explanation. The Great Depression disproves the notion that with the Fed in place, the US will automatically see more economic stability. We had the worst-ever crisis under the Fed’s existence, and are currently in the midst of a crisis that could surpass it.


I also find it astounding that my opponent finds no objection to the immoral and secretive actions of the Fed. Not being able to question economic policy is something that fascist societies have possessed, but not the US. After all, the Fed’s decisions affect all of us. Why is it justified for them to have absolutely no transparency and accountability to the American people, under the guise that secrecy is necessary for them? Secondly, the massive conflicts of interest that I mentioned are clear examples of cronyism that were meant to help out Wall Street while Main Street suffered. To put the $16 trillion the Fed loaned out into perspective, that amount is more that the US total GDP during the previous year. For them to create all this money to bail out banks that had made bad decisions in lending is definitively wrong, due to the MASSIVE debt created by printing an amount of money that exceeds the GDP. There were alternative solutions, but the bankers who had so much willpower in the Fed didn’t want these solutions since they wouldn’t benefit them. Finally, the audit that I mentioned revealed vast amounts of AMERICAN MONEY being lent out to EUROPEAN banks. They have their own central bank: why should the US be put into debt in order to bail out banks that aren’t even in the US? Glaring injustices were revealed by this audit that the Fed didn’t want. Unfortunately for them, it has exposed their cronyism and unchecked power, aspects that only end up benefitting the elite bankers and CEOs on Wall Street.


Regarding the interest rate graph, I never said that an increase in interest rates automatically leads to immediate depression. The graph does show a clear trend of major interest rate hikes leading to depression; sometimes the depression was just delayed slightly.


Let it be noted that my opponent dropped the income tax argument. It seems that he has accepted that this gorging of hardworking Americans’ incomes goes only to serve a central bank that is infiltrated with banking interests rather than a prerogative to preserve economic stability. He also says that eliminating the Fed would force us to borrow even more money. This is unjustified and incorrect. If the Treasury were able to print interest-free US notes that belong to the US government, the debt could be paid off quite easily. Compare this to using the current system under the Fed, where the govt. must go into further debt every time it needs money.


There are no positives to a system that facilitates oppressive income tax and a debt that is becoming mathematically impossible to pay off. Many cannot imagine life without the Fed, but there are numerous alternatives to ending its corruptive domination of the economic policy. Think about it: people could keep a larger percentage of their income, the government could pay off the national debt with interest-free currency, and the corrupt bankers of Wall Street would not have a stranglehold on monetary policy. We wouldn’t be free from economic cycles (this is a natural part of a true free-market society), but ending the Fed would not be the end of the world: it would merely be the end of mutant capitalism that has festered since its establishment.


imabench

Con

Ill make this quick

These was the Con's original comments of the Fed and the Great Depression,

" The Great Depression is almost never blamed on the Fed when taught in schools, but in reality the Fed's artificial manipulation of boom and bust cycle was the cause of the Great Depression"

"the Great Depression will be examined as to the Fed's role. In short: the Fed caused it"

The Con now accepts that the Fed was not the cause of the Great Depression....

"The $14 trillion national debt is entirely present because of how the Fed operates."
I have shown that Congress themselves did this by constantly borrowing money from overseas. The Fed only followed orders by getting Congress the money they wanted by organizing deals to secure the loans without damaging the countries economic credibility

" for a system that is corrupt to the core and has no business wielding the power that it does"
I have shown how the fed is regulated by Congress and only exists to carry out the constitutional powers given to Congress, for Congress

"Regarding the interest rate graph, I never said that an increase in interest rates automatically leads to immediate depression"

Yeah you did you said it in round 3, twice

"As can be seen, every time the Fed has increased interest rates, an economic depression has ensued"
1 sentence later,
"the Fed's control of the interest rates has irrefutably been a major factor in causing an artificial boom-bust cycle."

Round 4: "creating debt and instability along the way while they rob the middle class with income tax,"

I have shown that Congress is responsible for the debt and it is not the Fed that authorizes the Income Tax.

So let me just summarize the points Ive made here.
1) The Fed is not owned by private corporations
2) The Fed is not responsible for the irresponsible spending of Congress
3) The Fed is still regulated and closely watched by Congress
4) The Fed is not responsible for the Great Depression
5) The Fed exists to regulate banks and has done a very good job when compared to the rate of bank failures prior to its creation
6) The Fed exists to bring economic stability to the nation
7) The Fed simply carries out orders from Congress, not Wall Street banks

Thanks for reading, make sure you vote :D
Debate Round No. 4
6 comments have been posted on this debate. Showing 1 through 6 records.
Posted by wiploc 5 years ago
wiploc
HARMFUL:

Pro says the Fed exacerbates the business cycle; Con says it mitigates it.

Pro cites the great depression happening soon after the Fed began. Post hoc ergo prompter hoc. Con says the business cycle is generally milder under the fed, great depression notwithstanding.

Pro says the Fed caused the great depression, which seems outlandish, would need strong evidence to be taken seriously. Pro says the Fed exacerbated the great depression, which should surprise nobody, since this was before Keynes. The Fed, and everybody, was flying blind. We're in a new era now that we have viable economic theories. Not the great depression, nor anything before that, should be counted. So I think---but Con didn't go there. So we can ignore this paragraph.

Clearly the Fed has failed to control the business cycle. Miserable failure. But would things be worse or better without it? Pro says better; Con says worse. Neither one persuaded me to agree with them.

Because Pro has the burden of proof:

Advantage Con.
Posted by wiploc 5 years ago
wiploc
UNCONSTITUTIONAL:

For Constitutional reasons, Con wants Congress, not the Fed, to print money and regulate its value.

Do we want to follow the Constitution? Do we want, for instance, children to be able to take weapons of mass destruction to school because of the second amendment? Neither side addresses this, so we can ignore this paragraph.

Does the Fed control the mint? I don't know, and neither side addresses this, so we can ignore this paragraph.

That leaves regulating money's value. Con says he wants Congress to regulate money's value directly, rather than delegating this to the fed. He also says that money has no value, which, being patently false, taints my appreciation of the rest of his judgements. He also says he wants the gold standard, which would mean nobody could regulate money's value, kinda shooting himself in the foot there. Only Con didn't go there, so we can ignore this paragraph entirely.

Pro wants Congress to regulate the money supply directly, based, presumably, on which party is in currently in power. Recipe for disaster, as Con points out. Con argues, plausibly, that the Fed is the tool that Congress uses to regulate money's value. If a man is supposed to dig a hole, does that mean he can't use a shovel? Con didn't use that analogy, but he did point out that Congress oversees the Fed.

This Constitutionality issue is a near draw, but I'm inclining in Con's direction, and Pro has the burden of proof anyway.

Advantage: Con.

SECRETIVE:

Most of Pro's effort here is preaching to the choir, appealing exclusively to people who think bankers shouldn't profit, or who assume bankers are "malicious." If he has a real point, he was not cogent.

Pro makes no showing that greater disclosure would be good, or that greater disclosure would occur under another system, or that the proper solution isn't to have the Fed disclose more rather than to shut down.

--- Continued in next post.
Posted by DoctorZhiva90 5 years ago
DoctorZhiva90
Very true, but there's also a lot of neo-socialists who don't realize that the Fed is the underlying problem, and instead take it as an opportunity to promote socialism as being beneficial for the United States
Posted by E.BurnumIII 5 years ago
E.BurnumIII
A lot of OWS protesters are protesting the Fed
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by 1Historygenius 5 years ago
1Historygenius
DoctorZhiva90imabenchTied
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Reasons for voting decision: I agree with 16kadams. Also Pro did not offer links to his argument. Links mean proof.
Vote Placed by wiploc 5 years ago
wiploc
DoctorZhiva90imabenchTied
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Reasons for voting decision: RFD in comments.
Vote Placed by 16kadams 5 years ago
16kadams
DoctorZhiva90imabenchTied
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Reasons for voting decision: Sorry imabench, I believe his constitutional thing held up in the end, and that was the most important thing in his argument you get sources though.