The Instigator
harrytruman
Con (against)
Tied
0 Points
The Contender
Chang29
Pro (for)
Tied
0 Points

The Federal Reserve System

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Voting Style: Open Point System: 7 Point
Started: 12/5/2015 Category: Economics
Updated: 11 months ago Status: Post Voting Period
Viewed: 445 times Debate No: 83489
Debate Rounds (5)
Comments (2)
Votes (0)

 

harrytruman

Con

The Federal Reserve is obsolete:
There is no point to the Federal Reserve, it failed at all of its supposed intentions, which are, according to the Federal Reserve is; "to provide the nation with a safer, more flexible, and more stable monetary and financial system." The Federal Reserve actually did the opposite, only 16 years after the Federal Reserve was established, the stock market crashed. This was because the Federal Reserve kept a loose economic policy for too long and it caused a bubble, when the economy went under it did the opposite of what is was supposed to do, it contracted the money supply and stopped making loans, if the Federal Reserve"s intentions were to; "destroy the economy at any opportunity given", then I would argue they did just what they came here for. Another argument for the Federal Reserve is that it "regulates the economy and enforces banking regulations"; the truth is that these things are already taken care of, the invisible hand can regulate the economy, and law enforcement can enforce regulation.
http://www.federalreserve.gov...
The Federal Reserve is Destructive:
The Federal Reserve is destructive to our economy, 1929 for example, the Federal Reserve kept monetary policy too loose for too long and it caused a stock bubble, in 2008 for another example, the Federal Reserve did the same, they kept monetary policy too loose for too long and it caused a housing bubble. Another supposed purpose of the Federal Reserve is that it "offers immediate liquidity", meaning that it bails out banks to prevent them from going under, if the banks think that they can get away with destructive behavior, they are more likely to do more destructive behavior, so the Federal Reserve"s bailing out banks who engaged in dangerous business practices, is only enticing them to be even more irresponsible.
The Federal Reserve is Unconstitutional:
Article 1 Section 8 Clause 5 of the constitution states;
"Congress shall have the power; to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures"
Article 1 Section 10 of the constitution states;
"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."
The constitution states that congress should manage the money system and that our money should be gold and silver coin, the Federal Reserve issues the money, it is not congress, and it issues fiat though the constitution mandates a gold standard. One of the counter arguments to this is that "the constitution can be amended", but the fact is that neither the Federal Reserve Act of 1913 nor the Economic Recovery Act of 1971 got the necessary 2/3 vote to amend the constitution; hence they are not laws at all. Another counter Argument to this is that "The Supreme Court is above the constitution and can interpret it", this is not in the constitution, hence the Supreme Court does not have this power; the Supreme Court is the Supreme Court, the Constitution is the Supreme Law of the land, courts are not above the law, they just enforce it.
http://www.archives.gov...
The Federal Reserve is dishonest:
In 2009, a series of transactions occurred, adding up to 9,000,000,000,000$ (That"s 9 trillion) being transferred out of the Federal Reserve to person/persons unknown. The U.S. Senate had a tribunal to address this, and the Inspector General had no idea where 9 Trillion dollar went, later, the Federal Reserve said that it was a bail out, but failed to say who it was given to. Not only is saying it was a bail out undefined, it is also impossible; our money supply is 10 Trillion, if 9 trillion was added, it would be 19 Trillion, so it had to have gone out of country. What happened to this money, which it was given to, why the Federal Reserve said it was a bailout even though we know that our money supply was not increased, and why the Inspector General didn"t know what happened is still an enigma; I don"t know if Alan Greenspan had a large gambling debt and was threatened with his kneecaps or if he just wanted to see what it looks like for the entire US money supply to go up in flames.
https://www.youtube.com...
Chang29

Pro

The Federal Reserve or the Fed is trusted institution. From its founding in secrecy on an island in South Carolina by America"s rich and powerful. The rich in America have had their wealth protected by the Fed.

A secret meeting on Jekyll Island, SC of Senator Nelson Aldrich, and executive bankers representing banks of JP Morgan, Rockefeller, and Kuhn, Loeb & Co, led the founding of the Fed in 1913. Americans up until that time had resisted central banks, the first two attempts resulted in charters not being renewed, an issue that would be corrected in future legislation. The Panic of 1907, which threatened the personal fortunes of these very men, and their supporters, gave this idea a sense of urgency. A central bank with an appearance in independence and government support could insulate bankers from public scrutiny and legalize actions taken. Thus, as part of a progressive era changes America has a central bank in perpetuity.

What is the Federal Reserve an introduction by Investopedia ?

"Most people are aware that there is a government body that acts as the guardian of the economy - an economic sentinel who implements policies designed to keep the country operating smoothly"The Fed is the gatekeeper of the U.S. economy. It is the bank of the U.S. government and, as such, it regulates the nation's financial institutions. The Fed watches over the world's largest economy and is, therefore, one of the most powerful organizations on earth." http://www.investopedia.com...

Then Investopedia"s definition:

"The central bank of the United States and the most powerful financial institution in the world. The Federal Reserve Bank was founded by the U.S. Congress in 1913 to provide the nation with a safe, flexible and stable monetary and financial system. It is based on a federal system that comprises a central governmental agency (the Board of Governors) in Washington, DC and 12 regional Federal Reserve Banks that are each responsible for a specific geographic area of the U.S. The Federal Reserve Bank is considered to be independent because its decisions do not have to be ratified by the President or any other government official. However, it is still subject to Congressional oversight and must work within the framework of the government"s economic and financial policy objectives." http://www.investopedia.com...

Any debate about the Fed, need to differentiate between money, currency, and legal tender.
Money serves as a medium of exchange, a unit of accounting, and a store of value.
Currency serves as a medium of exchange and a unit of accounting.
Legal tender is government directed currency that serves as a medium of exchange, and unit of accounting within a jurisdiction.
Legal tender laws require the acceptance of government direct currency as payment. A business can refuse to accept gold, checks, promissory notes, or digital currencies, but cannot refuse legal tender.
The Federal Reserve does not print or mint currency, money, or legal tender.

During this debate, it will be established that the US Federal Reserve is in the best interest of America. The Fed is constitutional, supported by republican government, moderates economic swings, and protects the banking system.
Debate Round No. 1
harrytruman

Con

Hmm, present proof please, how is it constitutional?
Chang29

Pro

The Fed is constitutional, supported by republican government, moderates economic swings, and protects the banking system.

Since, the opposition in this debate uses valuable space to only inquire on the Fed's constitutionality, this will be addressed first. The Supreme Court in 1819, McCulloch v. Maryland set legal precedent that the US Congress could establish a central bank https://www.law.cornell.edu... .

One assumption made in America is that every bill past by congress and signed by the President is Constitutional. Every person in the process is sworn to protect the Constitution, it is their first loyalty. None are sworn to protect voters, special interest, or a political idea, only a sacred document. People that take an oath like that can only be trusted. The Constitution gives congress three clauses that apply to the Fed's constitutionality.

Necessary and Proper Clause
"The Congress shall have Power ... To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

This clause, in its modern interpretation, basically, anything congress does is constitutional. As a former Speaker explains when questioned about an obviously unconstitutional bill was being debated in congress, http://youtu.be... .

General Welfare Clause
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States."

It is in the general welfare of the residence of the United States to be protected from economic swings, hold stable legal tender, and have a safe banking system. The Fed has provided all of these for a hundred years. Congress with the Fed has increased the general welfare of America.

Commerce Clause
"To regulate Commerce with foreign Nations, and among the several States, ..."

This commerce regulation responsibility is centralized by a common legal tender. Without common legal tender merchants would not be able to accurately compare the value of products. Multiple types of legal tender is very confusing to most people, their phones can only have so many apps. People can not be encumbered with currency conversion.

The Fed does not print or coin money.
One constitutional objection to the Fed is that money must be of gold or silver, from this clause in the Constitution "No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts." This clause limits States not the Federal government or private institutions. If this clause did limit the Federal government or private institutions, it still would not constrain the Fed, since it does not print or coin money, currency, or legal tender. The US Treasury has those responsibilities.

The Fed purchases legal tender and bonds from the US Treasury with nothing but corespondent values on a balance sheet.

Another clause, gives congress the responsibility to set value of money "To coin Money, regulate the Value thereof, and of foreign Coin..." This clause does not apply to the Fed since no money is involved, only legal tender.

Lastly, with the number of court cases with the Fed involved that have reached the Supreme Court, it would have been ruled unconstitutional by now. The Supreme Court's honorable justices only responsibility is to protect the Constitution, they would have ruled against the Fed by now if it were unconstitutional. The court is the final authority for the law of the land, decisions like Dred Scott, Plessy v Ferguson, Citizen's United, and Obamacare show that the court is always right, regardless of morality.

With the Fed's constitutionality firmly established, next point of supported by republican government will be addressed. The United States is a republic not a democracy. The American republican form of government overwhelmingly supports the Fed, even bipartisan efforts to limit some of its powers are quickly stopped. The customer watch dog Senator Elisabeth Warren could not even get a bill to limit the Fed's powers as lender of last resort to pass the Senate. Another champion for the people Congressman Alan Grayson can't get an Audit the Fed bill through congress. This show the depth of support in America's republican government for the Fed.

Why does a republican government support the Fed?
The answer lies in the properties of inflation. Simply inflation makes future money less valuable than today's money. The Fed policy to target inflation at 2% per year, measured by CPI. This means that each year that price levels should rise by 2%. This increase is price levels is transferred though the economy as a whole, which increases wages, which means more tax revenue. Also, funds borrowed in early years are easier to pay with the value steadily decreasing. This is good for government, inflation is a hidden tax that every person that holds a dollar bill must pay.

The Fed's method of controlling interest rates also benefits government. The conduct of open market operations gives a continual market for US treasuries. Currently, the Fed holds over 2 trillion of US debt http://www.federalreserve.gov... without this debt in Fed hands, demand for US treasuries might not be as strong as desired.

The Fed is supported by many Americans, in 2010 Bloomberg poll only 16% of American want to abolish the Fed http://www.bloomberg.com... .

The Fed's moderation of economic swings will be covered in the next round.

Lastly, the Fed's bank regulatory role. Banks have a long history of failure. In the 19th and early 20th centuries bank runs would happen when confident was long in a bank's ability to repay depositories. People would demand their currency or species payment returned while the bank still hand either on hand. Since, banks cannot be profitable operating like a mini-storage, banks must loan out funds of depositors to be profitable. The mini-storage that secures a person's property and does not rent the stuff out is a poor business model. A mini-storage business should be renting out that stuff to earn additional profit. Since, banks loan out idle property for the good of the economy, the Fed must regulate this action.

As a non-government institution, the Fed's authority to regulate member banks has no legal authority and violations are referred to law enforcement for prosecution. This relationship is strengthened by member banks being the owners of the Fed. Thus, banks regulate themselves an effective way since 1913. This method keeps both partisan politicians and the ignorant public from interfering with America's banking system.

The Federal Reserve is a legal, trusted, and require institution that greatly benefits America.
Debate Round No. 2
harrytruman

Con

"Since, the opposition in this debate uses valuable space to only inquire on the Fed's constitutionality, this will be addressed first. The Supreme Court in 1819, McCulloch v. Maryland set legal precedent that the US Congress could establish a central bank https://www.law.cornell.edu...... ."
Did you ever read the constitution? The constitution grants congress the power to issue currency, specifically to coin money in gold and or silver coin but that is another debate, if you were to read the constitution, you will notice that among the powers granted to the supreme court, amending the constitution is not one of them. So, the Supreme Court Ruling is insignificant, the Supreme Court is not here to make the law, it is here to enforce it and to oversee the court system, I will give you a link to the constitution so you can read it for yourself. http://www.archives.gov...

"One assumption made in America is that every bill passed by congress and signed by the President is Constitutional. Every person in the process is sworn to protect the Constitution, it is their first loyalty. None are sworn to protect voters, special interest, or a political idea, only a sacred document. People that take an oath like that can only be trusted. The Constitution gives congress three clauses that apply to the Fed's constitutionality."
If you think that just because someone said that they would protect the constitution that it means that everything they do is constitutional just because they said so, you better go read up on the milligrams test. http://www.simplypsychology.org...

"Necessary and Proper Clause
"The Congress shall have Power ... To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
This clause, in its modern interpretation, basically, anything congress does is constitutional. As a former Speaker explains when questioned about an obviously unconstitutional bill was being debated in congress, http://youtu.be...... ."
Your interpretation is insignificant, the constitution says what it means, this means that it can create departments to serve purposes, but these departments are still limited by the constitution, and no, if everything congress did was constitutional according to the constitution, then the constitution would just be one sentence; "The government is always right!"

General Welfare Clause
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States." It is in the general welfare of the residence of the United States to be protected from economic swings, hold stable legal tender, and have a safe banking system. The Fed has provided all of these for a hundred years. Congress with the Fed has increased the general welfare of America."
This is actually very debatable, for one this is dependent upon your point that congress has the power to do anything regardless of the constitution if it is for the general welfare, I would like to state that Adolf Hitler said that the holocaust was for the general welfare. I would also like to state that saying that the Federal Reserve is beneficial does not make it so, truthfully, when you are talking about this, you cannot base it off of what the Federal Reserve says, I will base this off of fact though, for example, before the Federal Reserve, inflation was a steady 1%, then it spiked into double digit inflation, followed by a 2% deflation, now to all those people who are new to economic theory, you are probably thinking, "deflation, ell that can"t be worse than inflation", well the answer is no, it is much worse! In addition, this allows for congress to act for the general welfare, which is regardless still limited by the constitution, not for someone else, who is not congress, to pretend as if it is providing for the general welfare, and to violate the constitution, which is what you are proposing.
Commerce Clause
"To regulate Commerce with foreign Nations, and among the several States,"
This commerce regulation responsibility is centralized by a common legal tender. Without common legal tender merchants would not be able to accurately compare the value of products. Multiple types of legal tender is very confusing to most people, their phones can only have so many apps. People cannot be encumbered with currency conversion."
This means that congress has the power to regulate commerce, not that they have the power to give that power to a private corporation.

"The Fed does not print or coin money.
One constitutional objection to the Fed is that money must be of gold or silver, from this clause in the Constitution "No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts." This clause limits States not the Federal government or private institutions. If this clause did limit the Federal government or private institutions, it still would not constrain the Fed, since it does not print or coin money, currency, or legal tender. The US Treasury has those responsibilities."
So hold it, why then is it that if I open my wallet and get a 1$ bill it says "Federal Reserve Note", the US Treasury prints money for the Federal Reserve, the Federal Reserve simply is borrowing the Treasuries printer because, well, they have the most HD printers in the world, that"s it, the Federal Reserve orders the printing, they issue them, and it says Federal Reserve Note on all of them, so in short no, they don"t coin money they issue paper, and these papers are not legal tender because they are illegal, but they do issue currency.

"The Fed purchases legal tender and bonds from the US Treasury with nothing but correspondent values on a balance sheet."
If I did that my check would bounce and I would go to Guantanamo Bay.

"Another clause, gives congress the responsibility to set value of money "To coin Money, regulate the Value thereof, and of foreign Coin..." This clause does not apply to the Fed since no money is involved, only legal tender."
Yes, it says congress, the Federal Reserve is NOT Congress.

"Lastly, with the number of court cases with the Fed involved that have reached the Supreme Court, it would have been ruled unconstitutional by now. The Supreme Court's honorable justices only responsibility is to protect the Constitution, they would have ruled against the Fed by now if it were unconstitutional. The court is the final authority for the law of the land, decisions like Dred Scott, Plessy v Ferguson, Citizen's United, and Obamacare show that the court is always right, regardless of morality."
Well there you go, you said it flat out "the court is always right regardless of morality, well, let"s all take an example from this man, and tattoo swastikas on our arms, then we can shut "Hail Hitler!"

"With the Fed's constitutionality firmly established, next point of supported by republican government will be addressed. The United States is a republic not a democracy. The American republican form of government overwhelmingly supports the Fed, even bipartisan efforts to limit some of its powers are quickly stopped. The customer watch dog Senator Elisabeth Warren could not even get a bill to limit the Fed's powers as lender of last resort to pass the Senate. Another champion for the people Congressman Alan Grayson can't get an Audit the Fed bill through congress. This show the depth of support in America's republican government for the Fed."
Again, just because the government says it, does not make it so.

I am sorry, there is not enough space to finish my argument.
Chang29

Pro

The opposition in this debate is focusing on constitutional issues. When a bill is passed by Congress, signed into law by a President, and up held by the Supreme Court, that law is constitutional regardless of the morality, the examples that will be sited again of Dred Scot, Plessy v Ferguson, Citizens United, and Obamacare are all examples of immoral laws that were/are constitutional.

Another key point the opposition is getting wrong is the deferences between money, currency, and legal tender. The Federal Reserve does not have any responsibility with money, it only deals with legal tender. Legal tender is not addressed in the US Constitution, thus Congress can use any of the three clauses stated earlier to do anything that a President will sign.

As the opposition states "If I did that [create legal tender from nothing] my check would bounce and I would go to Guantanamo Bay." Almost correct, if you did it as a banker that is a member of the Fed it is fine, banks create tender everyday. Plus, counterfeits don't go to Gitmo that is saved for the most dangerous terrorists that threaten America.

The next point about the Fed is it role as a vanguard against economic activity.

Moderates economic swings
As for economic swings, when comparing pre-WWI and post-WWII, the Fed has done no worse than earlier systems. Today's Fed staffed with the best economic minds in America stand a vanguard from the excesses of capitalism.

One of the Fed's most important roles is control of the economy using macro-economic tools. The Fed gained this authority by passage of the Humphrey""Hawkins Full Employment Act of 1977. In the 1970s, after a generation of economic indoctrination, macroeconomic planners believe that if given the authority unemployment and stable prices could be controlled with monetary policy. Macro-economists point to the Phillips curve for justification. Simply put, the Phillips curve correlates inflation rate to unemployment rate in the US economy .http://www.econlib.org... .

The below graph shows the curve in action:
http://www.debate.org...


As anybody can see, a clear tread and predictable tread line. Thus macro-economists can control the unemployment rate by managing the inflation rate.

With management of the inflation rate America gains a bonus of stable prices. The Fed, using macro-economic analysis concluded that a 2% inflation rate was the Goldilocks of inflation, not too much and not too little.

Some uneducated and unenlightened might state, stable prices mean little change, but how little they understand. If prices stayed constant or even fall that is not good for an economy. If people can hold currency without penalty then people will do so, this will lead to currency hoarding. Savings is good for people but hoarding is something that must be prevented. Hoarding leads to a reduction is spending which is need to keep the GDP growing. Without GDP growth politicians must answer why there is a recession.

For these actions to be effective, the rest of the world must understand that international trade is to be conducted in US dollars. In other words, US currency hegemony. This hegemony has been enforced by US diplomatic and military actions. The first step was the Bretton Woods agreement just after WWII. Then upon Nixon's executive order removing America from a semi gold standard, the petro-dollar was born. With all crude oil international trades done in US dollars, America created a financial system the rest of the world must obey.

In the opposition's initial statement, it is pointed out that $9 trillion was issued by the Fed in secret. The Fed must operate in secret, America's banking system is fragile. If the Fed had stated the who's and Whys in this creation of legal tender the system would have collapsed due to lack of confidence. America's fiat money system is extremely fragile, every bank is by definition bankrupt because they can not meet all depositor liabilities. This is the great trick of double entry accounting, for a bank, a deposit is a liability and a loan is an asset. A loan is offset with creation of a reserve, thus legal tender is created for nothing legalized by Congressal action. If a non-authorized institution did the same action, people would go to jail. If a government makes it legal then citizens must comply.

The Fed protects American from economic swings thus ensuring that people maintain their place in society.
Debate Round No. 3
harrytruman

Con

"The opposition in this debate is focusing on constitutional issues. When a bill is passed by Congress, signed into law by a President, and up held by the Supreme Court, that law is constitutional regardless of the morality, the examples that will be sited again of Dred Scot, Plessy v Ferguson, Citizens United, and Obamacare are all examples of immoral laws that were/are constitutional."
The constitution did not allow for this, and no REAL ammendments were passed to make it so, hence my point still stands.

"Another key point the opposition is getting wrong is the deferences between money, currency, and legal tender. The Federal Reserve does not have any responsibility with money, it only deals with legal tender. Legal tender is not addressed in the US Constitution, thus Congress can use any of the three clauses stated earlier to do anything that a President will sign. "
This is not true, the tenth amendment of the constitution clearly lays out that if a power is not granted in the constitution, then the government does not have that power, so, congress will have to pass an amendment, get a 2/3 vote in BOTH the house and senate, then the president signs it, then the constitution is amended, then they can pass a legal tender act, then they can pass an order to print legal tender notes, they did not do this, they just got a majority vote and started printing.

"As the opposition states "If I did that [create legal tender from nothing] my check would bounce and I would go to Guantanamo Bay." Almost correct, if you did it as a banker that is a member of the Fed it is fine, banks create tender everyday. Plus, counterfeits don't go to Gitmo that is saved for the most dangerous terrorists that threaten America."
Now you see that is just it, the Federal Reserve allows this, but it has no power to make laws, not only that, but it does not have the legal privilege to exist, it not only breaks the law, it breaks the constitution. So my point exactly, why is it that banks are allowed to write checks on money they do not have and I cannon? Isn"t "Equal Justice Under Law" engraved on top of the Supreme Court?

"The next point about the Fed is it role as a vanguard against economic activity."

"Moderates economic swings
As for economic swings, when comparing pre-WWI and post-WWII, the Fed has done no worse than earlier systems. Today's Fed staffed with the best economic minds in America stand a vanguard from the excesses of capitalism."
It sounds like America has some sucky economists, or they have the best of the best and they are trying to ruin the economy, one is inclined to suspect the second.
"With management of the inflation rate America gains a bonus of stable prices. The Fed, using macro-economic analysis concluded that a 2% inflation rate was the Goldilocks of inflation, not too much and not too little. "
What, the goldilocks level of inflation is NONE, inflation is bad period, it"s a logical fallacy you are trying here, don"t try it again.

"Some uneducated and unenlightened might state, stable prices mean little change, but how little they understand. If prices stayed constant or even fall that is not good for an economy. If people can hold currency without penalty then people will do so, this will lead to currency hoarding. Savings is good for people but hoarding is something that must be prevented. Hoarding leads to a reduction is spending which is need to keep the GDP growing. Without GDP growth politicians must answer why there is a recession. "
Excuse me, you are saying that inflation is good because it means people are enticed not to save, wow, that is something the Federal Reserve would try to say, you see, savings allows people to invest their money and raise their status, the rich are afraid of this so they get their bank the Federal Reserve, to make inflation to stop it, more savings leads to more investment, which leads to economic growth, this has been proven, every ounce of economic growth in America is attributed to someone"s investment, the Federal Reserve however, our economy grows despite it, not because of it. Plus you are strawmanning me, you are acting as if the people who present the real answer are stupid so you are right.

"For these actions to be effective, the rest of the world must understand that international trade is to be conducted in US dollars. In other words, US currency hegemony. This hegemony has been enforced by US diplomatic and military actions. The first step was the Bretton Woods agreement just after WWII. Then upon Nixon's executive order removing America from a semi gold standard, the petro-dollar was born. With all crude oil international trades done in US dollars, America created a financial system the rest of the world must obey."

"In the opposition's initial statement, it is pointed out that $9 trillion was issued by the Fed in secret. The Fed must operate in secret, America's banking system is fragile. If the Fed had stated the who's and Whys in this creation of legal tender the system would have collapsed due to lack of confidence. America's fiat money system is extremely fragile, every bank is by definition bankrupt because they can not meet all depositor liabilities. This is the great trick of double entry accounting, for a bank, a deposit is a liability and a loan is an asset. A loan is offset with creation of a reserve, thus legal tender is created for nothing legalized by Congressal action. If a non-authorized institution did the same action, people would go to jail. If a government makes it legal then citizens must comply. "
What, the free market system is the most stable system ever devised, it is not that the banking system is fragile, it is that the Federal Reseve is destructive and they don"t want tp be caught.

"The Fed protects American from economic swings thus ensuring that people maintain their place in society."
No it doesn"t,
I have established that the Federal Reserve is unconstitutional and destructive, cut the fallicies and give me a real argument.
Chang29

Pro

Constitution
The spirit and the letter of a piece of paper is irrelevant. The people that are sworn to protect the words matter. When those people believe that the Constitution is a living document anything is possible. The Constitution has three clauses that Congress, and courts can use to justify any law. Both major political parties support these ideas when in power. Amendments that you refer to as not "real", courts have ruled those amendments as "real". Politicians can not be retrained by a piece of old paper, the good of the collective is just too important.

The 10th Amendment, a relic of the Bill of Rights. The implied powers in the Constitution's Necessary and Proper Clause, General Welfare Clause , and Interstate Commerce Clause make any action part of document. The states only have the power that the Federal government are willing the give them, the Supremacy Clause is used to justify this.

Congress authorized the Federal Reserve to provide a financial system, that is exactly what it does. After a hundred years, if the Fed was unconstitutional it would have been ruled as that at some point by the courts.

Monetary Policy
Economists at the Fed are the best America has to offer. These economists have big degrees and prestigious positions of academia, centered around the study macro-economic theory based on ideas of John M. Keynes. Keynes' ideas are the main stream of economic study. Economists at the Fed know and understand what America needs, much better than self-interested businessmen.

Inflation and fallacy of composition
Individual savings is good for that person, but not for an economy. In an economy, savings are idle resources. Idle resources need to be employed to expand the economy. A statement that savings are good for a group is a fallacy of composition.

Inflation motivates people to spend or invest hoarded legal tender before value decreases. For macro-economic measures this is a plus to GDP. With future legal tender having less value, inflation enables government and other borrowers to pay debts easier. The Fed supplies a target level of inflation to America's price levels to motivate hoarders and protect politicians.

The opposition has a point about the information levels and education, "mis" should have been used instead of "un". Those properly educated in America were indoctrinated to support the central banking and central planning. Mis-informed and mis-educated that might think 2% inflation is not helpful to the economy need to step in line with the main stream of economic thought. As for stupid people, they too are also benefited by the Fed's hidden tax, (inflation is just that). Governments could not afford programs that support their lifestyle without continued inflation.

Bank regulation
Fiat legal tender banking system is extremely fragile and requires a highly regulated environment. Fiat currency will not be accepted in a free market of currencies, the government's must designate them as legal tender. Nonredeemable currencies do not have the restraints of scarcity thus nullify rules of supply and demand. An free market is just dangerous without the rules of scarcity. With a free market of fiat currencies, would allow banks to create as much money as possible at any time, the Federal Reserve limits this will tough standards and reserve requirements. The excesses of the 2008 Crises when a handful of banks were able to cause the longest recession since the Great Depression.

The next round will be a conclusion, and responses to only new inquiries for the opposition.
Debate Round No. 4
harrytruman

Con

This debate has gotten stale, and I mean so stale that it is pathetic, your repetitive stupid argument is enough to make me sick. So I'm going to sum your paragraphs up in one sentence because they aren't worth the effort of copy pasting, or the words they take up, or having them repeated again, so here you go:
"The constitution doesn't matter because the federal reserve is good"
No, the constitution is the supreme law of the land, it doesn't matter if the government says it is beneficial, it is not, and even if it was that does not overrule the constitution, it needs to be amended before the federal reserve could happen, no amendment has been passed doing that, and the constitution dress not give the courts the power to amend the constitution. Next, your three clauses only mean that congress has the power to make offices and do their jobs.

"The 10th Amendment is old, he states only have the power that the Federal government are willing the give them, the Supremacy Clause is used to justify this."

No, this is not only wrong, it is irrelevant, for one we are called the United States, not the federal government. Next off, the tenth amendment said that the federal government only has the powers given by the constitution.

"Congress made the federal reserve even though it was not given that power in the constitution, the federal reserve is constitutional because the courts say so"

This is a logical fallacy, you are saying that it is constitutional because the courts say so, it violates the constitution, it's unconstitutional, period, your entire debate is based on saying something along the lines of "the government is always right and they said so"

"Inflation and fallacy of composition
Individual savings is good for that person, but not for an economy. In an economy, savings are idle resources. Idle resources need to be employed to expand the economy. A statement that savings are good for a group is a fallacy of composition."

What the, did you ever read the wealth of nations? Apparently not, wait, WHAT THE HELL THEN ARE YOU DOING DEBATING ECONOMICS THEN!!!!!!!!!??????????!!!!!! Two people looking for personal gain can benefit each other, that's how it works, no wonder your debate is always "the government is always right", you're a FREIKING COMMUNIST!!!!!

Inflation motivates people to spend or invest hoarded legal tender before value decreases. This debate has gotten stale, and I mean so stale that it is pathetic, your repetitive stupid argument is enough to make me sick. So I'm going to sum your paragraphs up in one sentence because they aren't worth the effort of copy pasting, or the words they take up, or having them repeated again, so here you go:
"The constitution doesn't matter because the federal reserve is good"
No, the constitution is the supreme law of the land, it doesn't matter if the government says it is beneficial, it is not, and even if it was that does not overrule the constitution, it needs to be amended before the federal reserve could happen, no amendment has been passed doing that, and the constitution dress not give the courts the power to amend the constitution. Next, your three clauses only mean that congress has the power to make offices and do their jobs.
"The Fed is constitutional because the courts say so."

"Individual savings is good for that person, but not for an economy. In an economy, savings are idle resources. Idle resources need to be employed to expand the economy. A statement that savings are good for a group is a fallacy of composition."

Did you ever read the wealth of nations? No, WHAT THE HELL THEN ARE YOU DOING DEBATING ECONOMICS!!??? More savings means more investment means more jobs means better economy, period. Two people searching for personal gain can help each other, commie.

"Inflation is good, trust me, I never even read the wealth of nations"

"Inflation is good, for the government, he he he"

"Fiat legal tender banking system is extremely fragile and requires a highly regulated environment. Fiat currency will not be accepted in a free market of currencies, the government's must designate them as legal tender. Nonredeemable currencies do not have the restraints of scarcity thus nullify rules of supply and demand. An free market is just dangerous without the rules of scarcity. With a free market of fiat currencies, would allow banks to create as much money as possible at any time, the Federal Reserve limits this will tough standards and reserve requirements. The excesses of the 2008 Crises when a handful of banks were able to cause the longest recession since the Great Depression."

Who is going to regulate the banking system, maybe the Federal Trade commission, the Fed is no more capable than them, in fact they are less.
Yeah, I win.
Chang29

Pro

Chang29 forfeited this round.
Debate Round No. 5
2 comments have been posted on this debate. Showing 1 through 2 records.
Posted by Chang29 1 year ago
Chang29
I will debate this, I can attempt a pro Fed argument.
Posted by Jonbonbon 1 year ago
Jonbonbon
If only this wasn't 5 rounds and you made your debate readable.
No votes have been placed for this debate.