The Instigator
harrytruman
Con (against)
Winning
1 Points
The Contender
broth5508
Pro (for)
Losing
0 Points

The Federal Reserve System

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
harrytruman
Voting Style: Open Point System: 7 Point
Started: 10/28/2015 Category: Economics
Updated: 1 year ago Status: Post Voting Period
Viewed: 698 times Debate No: 81666
Debate Rounds (5)
Comments (5)
Votes (1)

 

harrytruman

Con

The Federal Reserve:
"Whoever controls the volume of money in our country is absolute master of all industry and commerce and when you realize that the entire system is very easily controlled, one way or another, by a few power full men at the top, you will not have to be told how periods of inflation and depression originate."- James A Garfeild
Point 1: The constitution and constitutional money:
Article 1 Section 8 Sentence 5 of the constitution clearly states:
Congress shall have the power; to coin money, regulate the value thereof, and of foreign coin, fix the standard weights and measures.
This meant that congress would issue the money, this is very simple to understand, fix the standard weights and measures, however, is not, the phrase standard weights and measures is what people in the 1700s called the gold standard, this put the power over the economy into the hands of the people, gold or silver certificates were issued based on coin being deposited by people, which meant that certificate issue was based on the people and coin supply, coin supply was controlled by congress who ordered minting, and gold/ silver miners who provided gold and silver, and congress/ the treasurer were elected by the people, the people also chose which establishment"s to support, this gave 100% of the economic power to the people. Though the constitution allows for amendments, the Federal Reserve Act was not an amendment, it was just a unconstitutional law. The Federal Reserve ended this, it does not back its money by gold or silver so it is not dependent upon miners, it is separate from the government and the board of governors are not elected, which makes them not accountable to the people, and they will bail out any corporations which people choose not to support, preventing companies from shutting down effectively entrenches said corporations, exterminating any chance for new companies to be established. This has effectively eliminated our free market, creating a command economy, or in layman"s terms- communism.
Point 2: The power of the Federal Reserve:
Power tends to corrupt, absolute power corrupts absolutely
In 1956, during the Korean war, steel mill workers decided to strike, so president Harry S Truman decided to send the US Military, and seize the steel mill, he was obcourse called a communist for infringing the right to property, and for just reasons, because he was in fact infringing the right to property, so the US Supreme court had hearings, and decided:
A state of national threat does not give the president a blank check
A spectator saw the seizure as;
More power than any good man would want, or any bad man should have
In 2009, the Federal Reserve said that in the case of an economic emergency, they can implement a martial law of a sort, that they do quite literally have a blank check as to how much money they can print, how much money they can give away, how low they can make interest rates, and how much inflation they can cause.
Yet we see no Supreme Court trials calling them communists even though they are a communist agency considering the type of power they have.
Point 3: History and the History of Central Banks:
There is nothing new under the sun.
The first recorded central bank was the bank of England, the Bank of England was created by a group of British bankers who proposed the bill so that the British Government could loan money to finance the French and Indian war. The British crown ended up knee deep in debt, and had to raise extreme and unfair taxes to pay it all back, and this resulted in the reasonable revolt of the thirteen colonies.
The second bank in recorded history was the first bank of the United States, which was founded during the Hamilton Administration, in 1807, our economy fell apart as a result.
And yet, we attempted this same system by which we sell shares in our nation"s economy through a central bank; we founded the Second Bank of the United States, but in 1832 President Jackson vetoed a bill to recharter the bank with the reasonable concern of such an establishments power over elections by the money system, he was shot at in 1835. In 1837 we suffered the backlash with yet another recession.
In the booming 20"s the Federal Reserve implemented loose monetary policy, causing low interest rates and a lot of money, which caused people to invest in stocks, with loaned money. The Federal Reserve implemented strict monetary policy, causing people to be unable to pay their loans, causing bank runs, causing the great depression. The same happened in 2009, the only difference is that people invested in houses rather than stocks.
We can now conclude that a central bank in no way has ever benefited any economy.
The very existence of this money trust offends me, that any system would attempt to proclaim sovereign and absolute power over our economy that offends me, this is ac system based on the division of powers, free trade, and the idea that all people ought to have a equal shot, well not really, but that's what the history books say, and that's the way it is supposed to be so what if.
broth5508

Pro

I assume that the purpose of this debate is to determine the validity and necessity of having a Federal Reserve System.

Is the Federal Reserve Necessary? Yes, and for two reasons. First, it provides a physical infrastructure for the banking industry in the United States, upon which we, the citizens of this great Nation, rely upon in our everyday lives. Secondly, the Federal Reserve System controls the monetary policy of the United States, which effects the lives of all Americans, by controlling the value of the US Dollar, relative to the other currencies in the world.

Each Federal Reserve Bank provides a backbone of support for the banking system, keeps an eye on the financial institutions in it's region, and represents it's region in the meetings of the Federal Open Market Committee.

Let's start with how the Federal Reserve Bank supports local banks. Each member bank in each Federal Reserve District keeps reserves with the Regional Bank. They (the Federal Reserve Bank) can provide emergency liquidity (for example, in the event of bank runs), and allow member banks to easily facilitating the movement of reserves to and from the different member banks as directed by ACH payments, Wire transfers, and customers writing checks.

Secondly, the Regional Banks keep an eye on the members in its system, the bank holding companies, financial holding companies, federally chartered banks and state-chartered banks that are members of the system. Members of the Federal Reserve system must keep a certain amount of reserves with the Federal Reserve Bank and are monitored for compliance to safe banking laws and practices.

Lastly, the Federal Reserve bank CEOs participate in the formulation of monetary policy by taking part in and voting in Federal Open Market Committee meetings. The FOMC meetings decide what direction short term interest rates should go and what direction the Federal Reserve Bank thinks, based upon its constituents, long term interest rates should go as well. Essentially, the Federal Open Market Committee looks at the state of the economy and attempts to fine-tune and influence the direction the economy is headed.

Are people starting to behave too irrationally? Increase interest rates and sell government bonds to tighten the money supply. This will increase interest rates and make it more expensive for people to take out loans. Does the economy look a little sluggish? Let's inject it with a bit of caffeine and decrease short term interest rates. We'll also buy government bonds, put more money into the economy, making it easier for people to get a loan.

This, actually, leads us into our next topic, of how the Federal Reserve System manages the monetary policy of the United States.

The second reason to have the Federal Reserve System is because it is necessary for the country to control its Monetary Policy. This is the setting of interest rates, the manipulation of the value of the US Dollar, relative to the rest of the world currencies, and managing the flow of capital in and out of the country.

There are two ways of managing a country's economy. The first is through Fiscal Policy and the second is through Monetary Policy. Fiscal policy is set by Congress when they determine tax breaks, subsidies, and legislative means for stimulating or condoning economic practices. It takes a long time to form and also takes a long time to enact, but is good for creating the bedrock upon which the economy is to be built.

On the other hand, Monetary Policy, being outside of the traditional legislative process, has the ability to quickly impact the economy. Monetary policy also effects the relative value of the US Dollar, which is important in a global economy where most major countries are debasing their currencies to increase their exports.

If we did not have the Federal Reserve System, we would not have a banking infrastructure in the United States, nor would we have a way of maintaining our place in the global economy.
Debate Round No. 1
harrytruman

Con

"I assume that the purpose of this debate is to determine the validity and necessity of having a Federal Reserve System."
Yes it is, though I will also be arguing that it is destructive to our economy.
"Is the Federal Reserve Necessary? Yes, and for two reasons. First, it provides a physical infrastructure for the banking industry in the United States, upon which we, the citizens of this great Nation, rely upon in our everyday lives. Secondly, the Federal Reserve System controls the monetary policy of the United States, which effects the lives of all Americans, by controlling the value of the US Dollar, relative to the other currencies in the world."
You explain what it does, but you are yet to tell me how this in any way benefits us.
"Each Federal Reserve Bank provides a backbone of support for the banking system, keeps an eye on the financial institutions in it's region, and represents it's region in the meetings of the Federal Open Market Committee."
If you understand that, you will understand why the banks have recovered, and nobody else has- Professor Richard Wolff University of Massachusetts; https://www.youtube.com...
"Let's start with how the Federal Reserve Bank supports local banks. Each member bank in each Federal Reserve District keeps reserves with the Regional Bank. They (the Federal Reserve Bank) can provide emergency liquidity (for example, in the event of bank runs), and allow member banks to easily facilitating the movement of reserves to and from the different member banks as directed by ACH payments, Wire transfers, and customers writing checks."
Well I see a problem, you are not rebutting me, you are just giving me this thing about how good the Federal Reserve is, that"s not a debate.
"Secondly, the Regional Banks keep an eye on the members in its system, the bank holding companies, financial holding companies, federally chartered banks and state-chartered banks that are members of the system. Members of the Federal Reserve system must keep a certain amount of reserves with the Federal Reserve Bank and are monitored for compliance to safe banking laws and practices."

"Lastly, the Federal Reserve bank CEOs participate in the formulation of monetary policy by taking part in and voting in Federal Open Market Committee meetings. The FOMC meetings decide what direction short term interest rates should go and what direction the Federal Reserve Bank thinks, based upon its constituents, long term interest rates should go as well. Essentially, the Federal Open Market Committee looks at the state of the economy and attempts to fine-tune and influence the direction the economy is headed."

"Are people starting to behave too irrationally? Increase interest rates and sell government bonds to tighten the money supply. This will increase interest rates and make it more expensive for people to take out loans. Does the economy look a little sluggish? Let's inject it with a bit of caffeine and decrease short term interest rates. We'll also buy government bonds, put more money into the economy, making it easier for people to get a loan."

"This, actually, leads us into our next topic, of how the Federal Reserve System manages the monetary policy of the United States."

The second reason to have the Federal Reserve System is because it is necessary for the country to control its Monetary Policy. This is the setting of interest rates, the manipulation of the value of the US Dollar, relative to the rest of the world currencies, and managing the flow of capital in and out of the country.

"There are two ways of managing a country's economy. The first is through Fiscal Policy and the second is through Monetary Policy. Fiscal policy is set by Congress when they determine tax breaks, subsidies, and legislative means for stimulating or condoning economic practices. It takes a long time to form and also takes a long time to enact, but is good for creating the bedrock upon which the economy is to be built."

"On the other hand, Monetary Policy, being outside of the traditional legislative process, has the ability to quickly impact the economy. Monetary policy also effects the relative value of the US Dollar, which is important in a global economy where most major countries are debasing their currencies to increase their exports."
And still you go with this, stop goofing off and give me a real debate.

"If we did not have the Federal Reserve System, we would not have a banking infrastructure in the United States, nor would we have a way of maintaining our place in the global economy."
Since when should we be concerned with some socialist"s economy, last I checked the government is here to help us, not the Swedes- that"s what the Swedes have their own socialist government for, rather than mooching on ours.

I see you are having a
broth5508

Pro

broth5508 forfeited this round.
Debate Round No. 2
harrytruman

Con

Harry Truman wins by knockout!!!
broth5508

Pro

broth5508 forfeited this round.
Debate Round No. 3
harrytruman

Con

Looks like I hit him a little too hard eh, this is boring, I mean, this is debate.org, what's the point of posting it on debate.org if noone can debate it? I'm going to publish it on a website.
broth5508

Pro

broth5508 forfeited this round.
Debate Round No. 4
harrytruman

Con

Yep, I win.
broth5508

Pro

broth5508 forfeited this round.
Debate Round No. 5
5 comments have been posted on this debate. Showing 1 through 5 records.
Posted by harrytruman 1 year ago
harrytruman
I would cite fraction reserve banking role in the recessions of 1873,1893, and 1929.
Ill develop some more stuff for you tomorrow.
Posted by harrytruman 1 year ago
harrytruman
On what subject?
Posted by Meropenem777 1 year ago
Meropenem777
No, I have too many debates too handle any more. Just was wondering if you have an opinion or thought I could use or any facts you know.
Posted by harrytruman 1 year ago
harrytruman
Well ok, are you debating me or-?
Posted by Meropenem777 1 year ago
Meropenem777
Hello. What do you think are some good arguments for this debate I'm in, because I am sort of taking your side of our last debate. I have some ideas for this debate such as considering certain perspectives of economists and politicians on fractional banking.
Debate: http://www.debate.org...

Not that I am one to judge, but you seemed to have improved in your research. I can sort of tell exactly what this debate is about because of the very last sentence, central banks.
1 votes has been placed for this debate.
Vote Placed by Balacafa 1 year ago
Balacafa
harrytrumanbroth5508Tied
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Total points awarded:10 
Reasons for voting decision: ff