The Instigator
AlextheYounga
Pro (for)
Winning
12 Points
The Contender
IveGotUrOuts
Con (against)
Losing
7 Points

The Federal Reserve should be abolished.

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Post Voting Period
The voting period for this debate has ended.
after 5 votes the winner is...
AlextheYounga
Started: 4/21/2012 Category: Economics
Updated: 1 year ago Status: Post Voting Period
Viewed: 3,357 times Debate No: 23029
Debate Rounds (5)
Comments (22)
Votes (5)

 

AlextheYounga

Pro

The Federal Reserve is a cartel. It was organized in secret by people who worked under J.P. Morgan, Rockefeller, and Rothchilds.
It was created in secret and pushed through using bribed senators in an effort to benefit the bankers such as J.P. Morgan.
This system causes the hidden tax of inflation and causes most of our major debt today.
The debate will be over the question of "Should the Federal Reserve be abolished" I will be for abolishing the Federal Reserve.
Hope someone will challenge.
IveGotUrOuts

Con

i gladly accept your challenge............
Debate Round No. 1
AlextheYounga

Pro


Well cool. :)
Acceptance of definitions. (I forgot to put them in the first round)
cartel- a group of independently owned businesses which come together for the purpose of reducing or eliminating competition between themselves to enhance their profit margin or to secure their positions in the market.

The Federal Reserve System
-central banking system of the United States (not a government agency) that conducts monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions.

Money trust
- control of the majority of the world's financial wealth and political power could be controlled by a powerful few.

My case for why the Federal Reserve should be abolished.

1. It is incapable of accomplishing its stated objectives as to maintain stability of the financial system.

It was created in 1913. Since then we have seen the depressions and recessions of:
Depression of 1920-21
1923-24 recession
1926-27 recession
The Great Depression 1929-33
1937 recession
1945 recession
1949 recession
1953 recession
1959 recession
1960-1961 recession
1969-1970 recession
1973-75 recession
Early 80's recession
Early 90's recession
Early 2000's recession
Late 2000's recession
Its main goal was to stabilize the economy to prevent recessions and depressions. It has failed to do so and is incapable of doing so (which i will explain later)

2. It is a cartel, operating against the public interest.
It was proposed by Nelson Aldrich, a business associate of J.P. Morgan, and the father-in-law to John D. Rockefeller Jr. He eventually became the grandfather of Nelson Aldrich Rockefeller, our former Vice President.
The Federal Reserve Act was created in secret by:
Nelson Aldrich (already described above.
Abraham Andrew-Assistant Secretary of the Treasury, who later became a Congressman. He was very prominent in banking circles.
Frank Vanderlip- President of the National City Bank of New York, the largest and most powerful of all the banks in the country. He represented the financial interests of William Rockefeller and Kuhn, Loeb & Co.
Henry Davison- Senior partner of the J.P. Morgan company.
Charles D. Nortan- President of the First National Bank of New York.
Benjamin Strong- The head of J.P. Morgan's Trust Company, and 3 years later after the Federal Reserve System was created, he became the head of the system.
Parl Warburg- (probably the most important there because of his European banking knowledge) He was born in Germany and eventually became an American citizen. He was a partner in Kuhn, Loeb & Co. and was a representative of the Rothchilds Dynasty in England and France. Throughout the years of his banking in America he stayed in close contact with his brother Max Warburg who was head of the Warburg Banking Consordium in Germany and the Netherlands. Paul Warburg was one of the wealthiest men in the world.
These men represented about 1/4 of the wealth of the entire world.

These men created the Federal Reserve Act in secret on Jekyll Island, Georgia. An article written by Frank Vanderlip shows how this really happened.
"I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System. We were told to leave our last names behind us. We were told further that we should avoid dining together on the night of our departure. We were instructed to come one at a time and as unobtrusively as possible to the railroad terminal on the New Jersey littoral of the Hudson where Senator Aldrich's private car would be in readiness attached to the rear-end of a train to the south. Once aboard the private car we began to observe the taboo that had been fixed on last names. We addressed one another as Ben, Paul, Nelson and Abe. Davison and I adopted even deeper disguises abandoning our first names. On the theory that we were always right, he became Wilbur and I became Orville after those two aviation pioneers the Wright brothers. The servants and train crew may have known the identities of one or two of us, but they did not know all and it was the names of all printed together that would've made our mysterious journey significant in Washington, in Wall Street, even in London. Discovery we knew simply must not happen."
"If it were to be exposed publicly that our particular group had gotten together and written a banking bill, that bill would have no chance whatever of passage by Congress."

These men created a bill that was supposedly supposed to break the grip of the "money trust, and it was written by the "money trust"
There were people from the Morgans, the Rockefellers, Kuhn, Loeb & Company, the Rothschilds and the Warburgs. These were competitors. These people created the Federal Reserve Act as a cartel, to help eliminate competition. These people did not believe in free enterprise competition. "If you cant beat em, join em."

This cartel went into partnership with the government. The Federal Reserve System is not a government agency. The word "Federal" is there just to make it seem that way. The word "Reserve" is there just to make it seem like the U.S. has a reserve money pile somewhere (which it doesnt) The Federal Reserve is a hybrid. It is partly controlled by the banking cartel and partly controlled by the government.
The Federal Reserve creates money from nothing.

How do they benefit?
It starts with the government side of the partnership. Whe Congress spends more money than it takes in with taxes alone, they go to the Federal Reserve System. The Federal Reserve then just writes a check for whatever amount of money they need. This money comes from nothing. They just print whatever money they need. This is the payoff to the government for being in the partnership.
Now, the banking cartel benefits because of the money the government asks for. The government receives the money from the Fed. The government starts spending the money. This money is used to help pay all of the government workers (teachers, postal workers, policeman) These people deposit their money into their local commercial bank. This gives the banks money to loan. This gives the banks the power to charge interest on those loans. And this is how they benefit. The banks are able to loan money that comes from nothing and charge interest on money that comes from nothing. That is their payoff.


3. It generates our most unfair tax
Because the Federal Reserve is able to create money from nothing, this puts more money into the economy. Because we are not on a gold standard, that money causes inflation. Inflation is a hidden tax. These new created dollars delute the dollar's worth and this causes prices to go up, or make them appear as if they were going up. If we had a system backed by gold, then we wouldnt have this problem because the value of gold has stayed almost the same since ancient times. The price of a nice toga in ancient times would be the same price in gold as a nice suit would be today. Inflation is a tax. You have to pay it. The Federal Reserve makes the prices go up, which allows the banks to charge interest on dollars that come from nothing.

4. It destabilizes the economy.
As explained in number 3, the value of the dollar declines from the Federal Reserve creating money. It delutes the dollar and makes prices appear to go up. This destabilizes the economy.

I have made my case. Your turn. :)






Citations
http://en.wikipedia.org...
http://www.bigeye.com....
http://en.wikipedia.org...
IveGotUrOuts

Con

Thx to my OPP for this debate and thx to our audience for reviewing it..........

The primary motivation for creating the Federal Reserve System was to address banking panics. Other purposes are stated in the Federal Reserve Act( http://en.wikipedia.org... ), such as "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes". Before the founding of the Federal Reserve, the United States underwent several financial crises. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Federal Reserve System has broader responsibilities than only ensuring the stability of the financial system.

Current functions of the Federal Reserve System include:

(1)To address the problem of banking panics
(2)To serve as the central bank for the United States
(3)To strike a balance between private interests of banks and the centralized responsibility of government To supervise and regulate banking institutions
(4)To protect the credit rights of consumers
(5)To manage the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of
(6)maximum employment
(7)stable prices, including prevention of either inflation or deflation
(8)moderate long-term interest rates
(9)To maintain the stability of the financial system and contain systemic risk in financial markets
(10)To provide financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
(11) To facilitate the exchange of payments among regions
(12)To respond to local liquidity needs
(13)To strengthen U.S. standing in the world economy

http://en.wikipedia.org...

Why do we need the Fed ?:

In order to understand why we need the FED we need to know what it was like before the FED was created. Before the FED was created in 1913 there were more than 30,000 different currencies floating around in the U.S. Currency could be issued by almost anyone even drug stores were known to issue their own notes. There were many problems that stemmed from this, including the fact that some currencies were worth more than others. Some currencies were backed by silver or gold, and others by government bonds. There were even times when banks didn't have enough money to honor withdrawals by customers. Imagine going to the bank to withdraw money from your savings account and being told you couldn't because they didn't have your money. Before the FED was created, banks were collapsing and the economy swung wildly from one extreme to the next. The faith Americans had in the banking system was not very strong. This is why the FED was created.

The FED's original job was to organize, standardize and stabilize the monetary system in the U.S. It had to set up a method that could create "liquidity" in the money supply in other words make sure banks could honor withdrawals for customers. It also needed to come up with a way to create an "elastic currency," meaning it had to control inflation by making sure prices didn't climb too quickly, and it needed a way of increasing or decreasing the country's supply of currency in order to prevent inflation and recession.

Inflation: Inflation
http://static.ddmcdn.com...
Inflation is not a good thing because it slows down economic growth. For example, when inflation is high, things cost more and people spend less. They also do less long term planning that involves spending money, such as building houses and investing. Businesses are affected in the same ways. When inflation is high, it tends to fluctuate quite a bit. This uncertainty makes people wary of spending money for fear that inflation will increase even more and they won't be able to pay their bills.

High inflation also adds additional costs to long-term interest rates. These costs are to offset the risk associated with inflation. The additional costs make borrowing money less attractive. When people don't buy things (when demand is down), then the supply of goods gets too high, production has to decrease, and unemployment increases in other words, recession hits.
http://static.ddmcdn.com...

When prices are stable when inflation is low, consumers make more purchases, investments, etc., production output is maintained and employment remains high.

Fed Tasks: Monetary Policy

http://static.ddmcdn.com...

Monetary policy refers to the actions the FED takes to influence financial conditions in order to achieve its goals.

The FED's primary control is in the raising and lowering of short term interest rates. In doing this, the FED can indirectly influence demand, which then influences the economy. For example, if interest rates are lowered, borrowing money to make purchases becomes less expensive, and people are more motivated to spend money because they can get a better deal on the loan. Spending money, in turn, stimulates economic growth, which is what the Fed is trying to do in that instance. If there is too much money in the economy, however, people spend more money and demand increases at a faster rate than supply can match. Prices rise too quickly because of the shortage of products, and inflation results. If there is too little money in the economy, people don't have excess spending money, and there is little economic growth.

The Fed watches economic indicators closely to determine in which the direction the economy is going. By forecasting increases in inflation or slow-downs in the economy, the Fed knows whether to increase or decrease the supply of money.

Influencing inflation takes a long time and has to be looked at as a long-term goal. Influencing employment and output, however, can be done more quickly and therefore is a short-term goal. Finding the balance between the two is key. The lags in the effects that monetary policy has on the economy are significant. This is why the FED has to make forecasts of inflation prior to it actually happening one, two or even three years in advance. If the FED waited until inflation were apparent, then it would be extremely difficult to catch up and get it back under control.

I will explain the economic indicators in later rounds (8,000 characters not enough to do so) .

Gold standard:

Most alternatives to the FED are variations of gold standard systems. But they didn't work before, won't work now. The strength of a gold standard is its greatest weakness too because the money supply is determined by the supply of gold, it cannot be adjusted in response to changing economic conditions. If not perfectly credible, a gold standard is subject to speculative attack and ultimate collapse as people try to exchange paper money for gold. There is not enough gold to redeem dollars. Let's assume we are on the gold standard and China one day wanted to cash in all the debt the U.S. owes in gold bullion deposits and have very little left over if any.

Until my OPP makes a educated argument with an alternative to the FED there is no debate because it is simply impossible to abolish the FED.
Debate Round No. 2
AlextheYounga

Pro


I apologize for not upping the character limit.


Con makes an educated argument. But, it did not prove why the FED needed to be kept. It mostly just explained problems with the FED, and problems that the FED has. Con also did not address how the Federal Reserve is a cartel, so I guess my opponent agrees that it is.


Con's Argument for the functions of the Federal Reserve
Con basically outlines the functions of the FED, but fails to recognize that it has failed to achieve any of its major goals. The invention of the elastic currency was in fact, another way to benefit the banks. Without the elastic currency, they were not able to change their interest rates.

In fact, the American people did not want a central bank. They wanted a new banking system, yes. But NOT a central bank...which is what they got. Americans had seen what the central banks did in Europe. Central banks were created in Europe in the 16th century. They created central banks because they realized they could only tax their subjects so much. 46% was the natural debt ceiling. But after they created the central banks, they were able to tax their subjects 50%, 60%, 70% and sometimes 80% through the process of inflation.
The Federal Reserve operates the same way.



On Inflation
Although con seems educated on the subject, there are a few flaws with his argument.

First of all, prices don't really go up. They only appear to because the price of the dollar goes down. The primary reason for this is the Federal Reserve. Our government spends way more money than it takes in with taxes. They use the Federal Reserve to get around this. The FED creates money from nothing, and allows inflation to occur.
Since 1913, the value of the dollar has steadily declined. The reason. Because the FED is not even capable of stabilizing the economy. It does not act on public interest. Cartels usually don't act on public interest. They operate on their own interest.

On Gold Standard
"But they didn't work before, won't work now."
Gold standards have been used for thousands of years, and they certainly can work. Con argues that because of the limit of gold, it should not be used as currency because it cannot be adjusted to different economic conditions.
The fact that a currency needs to be adjusted is a myth. All societies go through periods of slumps and periods of economic boosts. When a slump happens, adjusting the currency is not a good thing to do. An example of this would be during FDR's administration (which by the way was probably the closest example of a dictator we have had in this country, but that's for another debate) he adjusted the prices of items because he believed prices were too low.
So that's it! No one has enough money to buy anything, so lets just raise the prices! Perfect!! This caused a lot of problems in the United States and was a contributing factor for why the Great Depression lasted so long. (Recessions usually last 1-2 years. Depressions last about 4. The Great Depression lasted 11)
When on a Gold standard, your currency will overall stay the same, and the economy will eventually rise again. When tampered with, the currency becomes destabilized, and it destroys the overall value of the currency.

Reasons for abolishing the FED.

1. It is incapable of accomplishing its stated objectives as to maintain the stability of the financial system.
Still stands.
2. It is a cartel, operating against the public interest.

Still stands
3. It generates our most unfair tax.

Still stands
4. It destabilizes the economy.

Still stands

Now, although I am not required to come up with another entity could be an alternative to the FED since my main argument was just "Should the FED be abolished?" I will still give an example of an alternate we could use anyway.

The Gold Standard could definitely work. And we don't have to have a central bank. The central bank is just another way of taxing the citizens without them knowing it. I believe private banks could do the job just fine. We would keep the dollar, and just have it backed by gold. This gives your currency stability, and it also makes your currency worth more. That would be my alternate.








Citations

http://en.wikipedia.org...
http://en.wikipedia.org...
http://mykindred.com...
http://en.wikipedia.org...
http://www.bigeye.com.......
IveGotUrOuts

Con

My OPP stated: "Con makes an educated argument. But, it did not prove why the FED needed to be kept. It mostly just explained problems with the FED, and problems that the FED has. Con also did not address how the Federal Reserve is a cartel, so I guess my opponent agrees that it is."

These arguments are so laughably ignorant why even address them(which I did) ? The fact the word "cartel" is used just shows the absurdity of theses claims not to mention the fact it is illegal.

Definition of a Cartel: A cartel occurs when two or more firms enter into agreements to restrict the supply or fix the price of a good in a particular industry.

For the sake of argument, we have the FED as one firm but where is the second ? There is not another hence no cartel.

When did the FED become a conspiracy ?

We have big problems with FED conspiracy myth makers. First their research is remarkably poor. As I investigated their claims, I found their arguments at many times inconsistent and self contradictory, containing numerous factual errors, embellishments, and outright fabrications. The sources for some of their most serious charges were undocumented, unverifiable, and just pure lies. When I began checking their research I was startled at how easy it was to refute many of their basic premises with information readily available on the internet. If their arguments can be countered so easily and with information available to anyone, then why did the conspiracy authors themselves not uncover the same things when they did their research? I can only speculate on that answer, but at the very least it is poor research a clear case of selection bias report the information that supports the thesis, ignore the data that does not.

The second problem we have with the Fed conspiracy myths is that others promote them without checking on the validity of the claims. If a reader chooses to believe the conspiracy theories, then that is his business. It seems to me if he decides to pass along these myths, then he has a responsibility to do some minimal investigation to verify the claims. Probably few if any have actually done this because if they had, then like myself, they would have found that a mere cursory examination of the evidence would cast considerable doubt on the conspiracy claims.

The third problem we have with them is that they divert valuable resources from solving real problems. The conspiracy theorists have obviously motivated many people to political action who might otherwise be politically inert. This is good. Unfortunately, the efforts of these new activists are being directed at a problem which does not appear to exist.

They make some very serious allegations. If they were true, then I would feel compelled to oppose the FED. If they were false and they are then I feel equally compelled to debunk them. The latter has happened and is the reason I accepted this debate.

I do not know whether the FED is involved in a conspiracy maybe it is. I cannot disprove a negative statement. All I can do is examine the validity and accuracy of a given FED conspiracy hypothesis. Most of them have turned out to be completely false. Others are highly unlikely. None have proven to be accurate.

I found this page that has every argument my OPP has put forth http://www.bigeye.com... if you notice there are no sources given which leads me to assume there are none. This is basically the same page http://www.bibliotecapleyades.net... again no source here is another
http://www.infiltratednation.com...



The FED is "incapable of accomplishing its stated objectives as to maintain the stability":

The FEDs roles in conducting monetary policy, supervising banks, and providing payment services to depository institutions help it maintain the stability of the financial system. Using the monetary policy tools at its disposal, the FED can promote an environment of price stability and reasonably damped fluctuations in overall economic activity that helps foster the health and stability of financial institutions and markets. The FED also helps foster financial stability through the supervision and regulation of several types of banking organizations to ensure their safety and soundness. In addition the FED operates certain key payment mechanisms and oversees the operation of the payment system more generally, with the goal of strengthening and stabilizing the system.

The Federal Reserve engages in all these activities on a routine basis, but the stabilization activities of a central bank are especially evident and critical during periods of financial stress, such as those that occurred following the stock market decline in 1987 the international debt crisis of 1998 and the terrorist attacks in September 2001. In these instances, the FED promoted financial system stability by providing ample liquidity which balances at the FED Reserve through large open market purchases of securities using short term repurchase agreements and by extending discount window loans to depository institutions.

The FED is a "cartel":

The allegation that an international banking cartel controls the FED is wrong. Foreigners do not own any stock in the FED. Neither do they currently own any significant shares of the domestic banks that actually do own shares in the Fed. The central assumption that control of FED is the same as control of the whole System is badly mistaken. Also the profits of the FED, again contrary to the conspiracy theorists, are funneled almost entirely back to the federal government, not to an international banking elite.

It generates our most unfair tax is false:

My OPP stated "Because the Federal Reserve is able to create money from nothing, this puts more money into the economy. Because we are not on a gold standard, that money causes inflation. Inflation is a hidden tax."

It is certainly true that the FED does create money but from nothing ha not hardly . The only time the FED creates money is when a qualified borrower applies for a loan, then the FED creates the principal to fund the loan. The principal is created based on the borrowers proven ability to repay the loan this "proven ability" the borrowers credit rating. The FED is totally incapable of creating money, that is, to enable money to enter circulation without a qualified borrower making an application for an advance on his future production.

It destabilizes the economy which is false:

My OPP stated: "the value of the dollar declines from the Federal Reserve creating money. It delutes the dollar and makes prices appear to go up. This destabilizes the economy."

As shown above the FED does not create money "out of thin air"



The FED works maybe it is not perfect but it works


Debate Round No. 3
AlextheYounga

Pro


Con obviously did not understand me correctly, I guess in everything.

Yeah, I used the word "cartel" because that is exactly what it is.
I provided more than enough evidence to support my claims. But this time I will provide more. Just in case con needs a little reassurance. And yes it is international bankers. I explained how Paul Warburg was there. He was a banker and also a brother to Max Warburg who was head of the Warburg Banking Consortium in Germany and the Netherlands. He was also partners with Rothchilds Dynasty in England and France. He was also a partner in Kuhn Loeb & Co. This man helped create the FED.
I provided the definition of cartel
cartel-a group of independently owned businesses which come together for the purpose of reducing or eliminating competition between themselves to enhance their profit margin or to secure their positions in the market.

Cartels will sometimes use the government to enforce their wants. An example of this would be like what happens in South America with the drug trade. They will pay off the police to get them to enforce their dirty work.

But, again I showed ample evidence to support my claims. Frank Vanderlip even stated himself in one of his articles of the Saturday Evening Post how he helped create the Federal Reserve, and how that they did so in secret. He also stated that if anyone found out who all attended the meeting, the bill would certainly not pass. It is Round 2 if my opponent would like to refer to it again.
He says this because he knew that if the people found out that the main people involved in the money trust, created the thing that was supposed to prevent the money trust, they would certainly not let it pass.
The site that I posted is actually a summary of a book. The reason there are similar sites to that one is because it is more summaries or the speech he has given to support his claims.The book is called "The Creature from Jekyll Island." by G. Edward Griffin. If my opponent really had done research about this topic, he would have heard of this book. I will not rewrite all of my claims. I already stated them and provided enough evidence to support them. But here is a little more evidence. All of this is proven history. There's no secret. All of this is out in the open.
http://en.wikipedia.org...
http://www.a-equals-a.com...
http://www.youtube.com....

The FED creates money...from NOTHING
Since its creation, the Federal Reserve Act has been amended 195 times. Its powers have become so broad that it can pretty much create money out of anything.


"The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes." So spoke Federal Reserve Governor Benjamin Bernanke in 2002, prior to becoming the central bank's presiding chairman during the credit crisis and stock market crash of 2008.

Now, its main income, is seigniorage revenue. That means that it "orders" new currency for cents on the dollar. So yes, they add money to the economy. But that is not the only thing it can create money. from. http://libertarianinvestments.blogspot.com...

And yes, the FED can funnel money into the banks of the U.S. if it wishes. Yes, as it wishes. Congress has actually given the FED a high degree of independence because central bankers make "unpopular decisions."

Yes, it destabilizes the economy.

My opponent uses the statement. "The FED works maybe it is not perfect but it works"
You know what else works? Concentration camps.

My point is that it doesn't matter if it works or not. Anything can work and operate. My toilet operates. Its the fact that it doesn't work well. All of the things that my opponent stated the FED can do are correct. But, key word "can." Do they actually do most of that? No.

Since its creation, all it has done is degrade the value of the dollar, destabilize the economy (which I explained above) and "operate" against the public interest.

Because of this I urge the voters to vote Pro.

And I apologize if my tone sounded a little negative. I don't wish to make my opponent feel unintelligent. Con is certainly are not intelligent. I just don't think con quite understood it all.








IveGotUrOuts

Con

My OPP is telling half truths to fit with his conspiracy theory this is no debate he is ignoring facts there is no point even debating him. This is one of those many half truths conspiracy theories people use to convince the ignorant which is laughable which you will see.............

The FED is a very powerful institution, and the people who run the worlds large banks are a very powerful group of people. No one would claim otherwise. Also, the bankers have common interests, and, like any other group of people with common interests, they do what they can to bring about government policies that favor those interests.

Because the FED as the central bank of the United States, implements policies that most directly affect the bankers, they of course are quite concerned with what the Fed does, how it is structured, and who runs it. And, like other elite groups, bankers certainly meet in private to figure out how best to get what they want.

With all that said the idea that a small cabal of bankers runs the world through the operations of the FED is wrong on several counts. It is no reason to abolish the FED as PRO would love you to think.

The FED was not formed in secret. The FED was created by legislative action, formally and publicly. But there were certainly private meetings that laid the groundwork for it. Of course, the same is true of legislative actions affecting the pharmaceutical industry, Silicon Valley, insurance firms, and the list goes on. Nothing that special about the creation of the FED. Finally, while I am sure that there are many decent people who see the FED and the bankers as the source of the worlds problems, this view is often part of a larger anti Semitism.

Jeckyll Island:

Following the near catastrophic financial disaster of 1907 the movement for banking reform picked up steam among Wall Street bankers, Republicans, and eastern Democrats. Much of the country was still distrustful of bankers and of banking in general after 1907. After two decades of minority status, Democrats regained control of Congress in 1910 and were able to block several Republican attempts at reform, even though they recognized the need for some kind of currency and banking changes.

In 1910 Nelson Aldrich, Frank Vanderlip of National City (today known as Citibank), Henry Davison of Morgan Bank, and Paul Warburg of the Kuhn, Loeb Investment House met secretly at Jeckyll Island. The meeting was held in secret because the participants knew that any plan they created would be rejected automatically in the house of representatives if it were associated with Wall Street. Because it was secret and because it involved Wall Street, the Jekyll Island affair is a favorite source of conspiracy theories. The movement toward significant banking and monetary reform was well known. It is hardly surprising that given the real possibility of substantial reform, the banking industry would want some sort of input into the nature of the reforms. The Aldrich Plan which the secret meeting produced was even defeated in the House, so even if the Jekyll Island affair was a genuine conspiracy, it clearly failed.

Conspiracy theorists have long viewed the FED act as a means of giving control of the banking system to the money trusts, when in reality the intent and effect was to wrestle control away from them. History clearly demonstrates that in the decades prior to the FED act the decisions of a few large New York banks had, at times, enormous repercussions for banks throughout the country and the economy in general. Following the return to central banking, at least some measure of control was removed from them and placed with the Federal Reserve.


What we know:

The Fed regulates financial institutions, acts as the U.S. government's bank, acts as a bank's bank, and is responsible for managing the nation's money. The Fed has two divisions: One group, the Board of Governors, is responsible for setting monetary policy and managing the nation's money the other group, the 12 regional Reserve Banks, acts as the service division that carries out the policy and oversees financial institutions. The regional Reserve Banks represent the private sector. Both of these groups have the same goals.

In its role as money manager, the Fed has two primary goals:

*Maintain stable prices (control inflation)

*Ensure maximum employment and production output

It achieves these goals indirectly by raising or lowering short term interest rates. Although these are two separate goals, the outcome of each is the same a stable economy.

My OPP has shown nothing except the fact is his mind the FED is a conspiracy who knows for what reason. It would be a mistake, however, to ignore the context in which many of these theories exist. To the conspiracy culture, the FED is a vital player in the plot to enslave the world. George Johnson (1984) summarized the conspiracy world view with this following passage:

Over the last hundred years, the world view in which bankers, Communists, and Jews are twisted into a single enemy has become so engrained in the minds of some right-wingers that it is difficult to unravel the threads and explain exactly how they are supposed to fit together. The connections are more emotional than rational, but the purpose of a conspiracy theory is to impose a system of inchoate hate. To Liberty Lobby, the world works something like this:
By promoting U.S. involvement in foreign wars, the bankers force the federal government into debt. To cover its mounting deficit, the country must borrow money from the Federal Reserve System which is supposedly run by the international bankers or tax citizens through the Internal Revenue Service, another element of the plot. The Soviets benefit because the United States is so distracted by its various foreign ventures that it has no time to oppose the Communist plan to enslave the world with a Marxist superstate.

According to the theory, Communists and capitalists only seem to be competitors, while, in truth, they are working toward the same goals: socialism and one world government. Expensive federal social programs increase government borrowing, enriching the bankers. Taxes and government regulation oppress small scale entrepreneurs and businessmen, keeping them from challenging the bankers' wealth. In a one world government, this power over the people would be extended to every continent, strengthening the bankers' stranglehold on the planet (Johnson, pp. 104-105).

Johnson wrote this in 1984 when the Soviet threat was still with us. If you strike the words "Soviet" and "Communists" from the text and simply replace them with "socialists," then the plot still retains a fresh relevance for the modern conspiracy believer. Of course, much of this conspiracy theory cannot be falsified -- there's no way to prove there isn't a conspiracy, much like there's no way to prove Santa Clause doesn't exist. This does not preclude the possibility, however, true believers will simply ignore the evidence against the conspiracy theory(as my OPP has done)or just rewrite it a bit so as to make it unfalsifiable.

My OPP claims the FED operates against public interest is just absurd and makes no sense.

Vote whichever way you want I am not going debate a conspiracy theorist ever again........
Debate Round No. 4
AlextheYounga

Pro

My opponent believes that i am a conspiracy theorist and therfore wants nothing to do with me. I am in fact not a conspiracy theorist. I actually oppose most conspiracy theories myself. My opponent uses other conspiracies which i never included in any of my arguments. He goes off topic to talk about a one world government conspiracy. I too have heard of this conspiracy, and have seen the flaws within it, which is why i didnt include it. I included nothing about the FED controlling the world, for my opponent is pulling these ideas out of his... Behind.

But first, lets see the flaws in his argument.
1. Yes, they operate against the public interest. As i stated above, when the FED was created, they gave the FED a high degree of independence because they make "unpopular decisions." That is operating against the public interest.
2. The FED has not accomplished stabilizing prices. If you notice, since 1913, the value of the dollar has declined and inflation has risen at a steady rate since then.

" The FED is a very powerful institution,and the people whorun the worlds large banks are a very powerful group of people. No one would claim otherwise. Also,the bankers have common interests, and, like any other group of people with common interests, theydowhat theycan to bring about governmentpolicies that favor those interests.

Because the FED as the centralbank ofthe United States,implements policies that most directly affect the bankers, they of course are quite concerned with what the Fed does, how it is structured, andwhorunsit. And, like otherelite groups, bankers certainly meet in private to figure out how best to get what they want. "

Why, con! Thank you for supporting my argument. My opponent has almost directly recited the definition of cartel.
And he tries to use this to support his argument.

So far, all my opponent has done has gone around the fact that the FED does not stabilize the economy by just describing its goals. Goals it has failed to accomplish.

All of my previous points still remain intact. My opponent has done nothing to debunk them.
If my opponent wishes to keep arguing and win this debate, con will have to give a good reason why the FED should be kept which my opponent hasnt.

YOU CAN TAKE OUT THE ONE CONSPIRACY THEORY THAT I MENTIONED (I ONLY MENTIONED ONE, I DID NOT EVEN INCLUDE A WORLD GOVERNMENT, OR A THEORY ABOUT THE FED CONTROLLING EVERYTHING) AND MY ARGUMENT STILL HOLDS MORE WATER THAN MY OPPONENTS. WHICH BTW, WHAT I MENTIONED WAS NOT A CONSPIRACY. ALL OF THIS HAS BEEN PROVED IN HISTORY. GO TO THE JEKYLL ISLAND CLUB AND THERE'S A PLAQUE ON THE DOOR THAT SAYS "THE FEDERAL RESERVE WAS CREATED IN THIS ROOM."

P.S. i did this from my phone. I apologize if they're any errors. And i apologize for the CAPS LOCK. I can't use the bold for some reason on my phone.
IveGotUrOuts

Con

This debate was over whether or not the FED should be abolished let me point out that allegations that a secret conspiracy illegally directed formation of the FED and continues to control it. But there are facts that we cant disregard (1) Years before the FED was formed, Supreme Court decisions had given Congress virtually total power over the U.S. monetary system and that power was used to advance easy-credit, fiat-money interests. (2) The FED bill was openly debated in Congress and before the American public, and it was passed with broad bipartisan support in a political and social climate that strongly favored the creation of a central bank. (3) The power of the member banks as stockholders of the FED banks is narrowly circumscribed by the terms of the FED Act thus, the influence of bankers on U.S. monetary policy is via some avenue other than the little known fact of their stock ownership in the FED.



Although there is a reasonable basis for doubting the Constitutionality of fiat money, by the time the FED plan was conceived the Supreme Court had long ruled that Congress did indeed have Constitutional power to control the monetary system of the United States. Congress had passed Legal Tender Acts in 1862, 1863, 1864, and 1865 as wartime measures, and additional acts in 1878 and 1890 as peacetime legislation. According to these acts, non-interest-bearing legal-tender notes issued by the United States were declared "lawful money and a legal tender in payment of all debts, public and private, within the United States." Initially such notes were not legal tender in payment of duties on imports or on Government interest-bearing obligations, but by 1890 these exceptions had been eliminated.



The Supreme Court ruled on the Constitutionality of these Acts in three landmark cases: Hepburn v. Griswold (1870); Knox v. Lee (1871); and Juilliard v. Greenman (1884). Although in Hepburn v. Griswold the Court first ruled against Congress's authority to issue fiat money, as soon as the Court's membership changed, it reversed the ruling. As a result of rulings in Knox v. Lee and Juilliard v. Greenman the power exercised by Congress in authorizing issues of legal-tender notes was a legitimate power in both wartime and peacetime. The nearly unanimous (8 to 1) 1884 decision granted Congress sweeping powers to regulate virtually all monetary issues. Thus Congress had already taken many easy-money steps before it passed the Federal Reserve Act in 1913. The Constitutionality of the Act was upheld in Raichie v. Federal Reserve Bank of New York on July 15, 1929. One can today continue to maintain, we grant, that the Supreme Court's decision was innocently or malevolently contrary to the Constitution, but that decision settled the issue according to the legal procedures of the Nation.



The definition of conspiracy theory is : A conspiracy theory explains an event as being the result of an alleged plot by a covert group or organization or, more broadly, the idea that important political, social or economic events are the products of secret plots that are largely unknown to the general public.



The Myth of the Federal Reserve is an amazing attempt at historical revision, and rather than being just one conspiracy theory weaves many of them together in a "conspiracy tapestry". The myth is all over the internet and independent documentaries, and the accounts of the conspiracy differ a bit in their scope, so I can’t possibly address all of the issues in my limited space. I will show conspiratorial myths surrounding the creation of the Fed and that the Fed is a for-profit banking cartel that controls the US money supply in order to enrich itself one more time. Neither of these suppositions is grounded in fact.



Myth: The Federal Reserve System is a for profit private banking cartel and is being used by private bankers to devalue the American currency for their own gain.



Panic of 1907 was a financial crisis that arose near the beginning of the twentieth century as result of a plan to limit the popularity of trust companies. The banking industry was unsettled with the emerging successes of trusts companies, so they attempted to bring financial ruin to F. Augustus Heinze's Knickerbocker Trust in order to falter the public's favor in trust companies. Since the Knickerbocker Trust was unable to receive any financial support from other financial institutions to save itself from failure, the public started to fear that the banking and trust industries were experiencing liquidity issues and thus starting to perform bank runs.(bank run is a situation in which numerous bank customers try to withdraw their bank deposits simultaneously and the bank's reserves are not sufficient to cover the withdrawals.)



The 1913 U.S. legislation that created the current Federal Reserve System. The Federal Reserve Act intended to establish a form of economic stability through the introduction of the Central Bank, which would be in charge of monetary policy, into the United States. The Federal Reserve Act is perhaps one of the most influential laws concerning the U.S. financial system.



Some people believe that expansion of the money supply generates many problems, such as inflation expectations, which become self fulfilling as higher wages and prices are demanded. Supply does not keep up with demand and the effects of growth versus inflation are a net negative for the economy. Economists, such as Milton Friedman, have advocated a fixed rate of increase in M1(which is used as a measurement for economists trying to quantify the amount of money in circulation. The M1 is a very liquid measure of the money supply, as it contains cash and assets that can quickly be converted to currency), rather than discretionary policies that expand and contract the money supply based on macroeconomic factors. Other schools of economic thought, such as the Austrian school, believe that central banking is itself the source of the business cycle, and should be replaced with the gold standard, or a free market determined currency system. I did not focus on these theories and policy choices here, since my purpose is to argue against certain scenes in the FED conspiracy and its revisionist history, but it is helpful to know that there are legitimate economic arguments against the Fed, at least in its current form. But I am also opposed to the “End the Fed” agenda on real economic theory, not just conspiracy theory, and the correct historical account of the Panic of 1907 is only a small part of this justification, in that it demonstrates the value of a lender of last resort.



I hope I have shown, at the very least, that the FED was not created under a veil of conspiracy for specifically nefarious or greedy purposes. By explaining the historical events that provided the impetus and forged the will to create a central bank, along with the unique structure and function of the FED as an American style central bank, I hope that any worries one might have had, that the FED is a shadowy cartel controlling the money supply, can now be recognized as overly simplistic and paranoid.



So the argument that The Federal Reserve should be abolished is ignorant and unfounded



Like I said last round vote whichever way you want........

Debate Round No. 5
22 comments have been posted on this debate. Showing 1 through 10 records.
Posted by TheInformed 10 months ago
TheInformed
I think the bottom line is that the fed's role is important, but it is obvious that it needs a powerful watchdog to investigate claims that it had been created/infiltrated by powers/banking cartels that seek to monopolize the world's banking system (or that have already monopolized the world's system and simply created the fed as an extension of that monopoly). This would actually be a more meaningful debate: The fact that there seems to be a lot of intelligent theories about the reality of world domination by a banking cartel, that in itself is MORE THAN ENOUGH reason to create an CIA-style body to aggressively research such claims. This investigative body would have to be protected against the usual tools of all "cartels" - murder, infiltration, media manipulation, etc.
Posted by 12tafran 1 year ago
12tafran
Jake-migkillertwo.....Federal reserve don't print money, the Bureau of Engraving and Printing does....BURN!!!!!!!
Posted by AlextheYounga 1 year ago
AlextheYounga
IveGotUrOuts also argued me again on this topic. If anyone would like to see it and vote on it, here is the link.
http://www.debate.org...
Posted by Wallstreetatheist 1 year ago
Wallstreetatheist
Pro could have gone harder on the destabilization argument with empirical evidence prior to the Great Depression, Housing Crisis, and Financial Crisis; but, he did have strong arguments on the ties to big business and big bankers, the abject failure of its dual mandate, and the price inflation due to currency devaluation.

Con clearly did not have an adequate understanding of the federal reserve, because he stated that inflation is bad, but the fed creates that! No strong arguments from the con.
Posted by AlextheYounga 1 year ago
AlextheYounga
Debate me if you want Jake-migkillertwo if you want. IveGotUrOuts made another debate with me on the same subject, but he's just letting the time run out. http://www.debate.org...

But, i'd rather you start the debate. I don't necessarily know exactly what you are wanting to debate on.
Posted by Jake-migkillertwo 1 year ago
Jake-migkillertwo
Was browsing econ debates and came here because I myself am majoring in economics with a special focus on macroeconomics, and the Federal Reserve is the most important institution that relates to macroeconomics.

I have to say, this is one of the worst debates I've read on the subject. I will gladly debate either of you on the Federal Reserve. Even though I myself am a Keynesian, I don't think this IveGotUrOuts gentleman has ever heard of "Austrian Business Cycle Theory"

"The Fed is a Cartel"

Just because people involved in finance are regulating finance does not mean that they are rigging "the game" in favor of financial services. The simple fact of the matter is that people who are actually in finance have the necessary knowledge that laypersons, like you or I, would never have to competently regulate something as complex as the American, and by extension the World financial system.

"Inflation destabilizes an economy"

Pro only pointed to long-run inflation, as in the loss of the value of a dollar over a period of 90 years. But long-run inflation does not destabilize an economy necessarily. *unexpected* inflation destabilizes an economy because it changes the terms of trade, and because prices don't adjust quickly enough. This causes a redistribution of wealth from creditors to debtors.

And yes, the Federal reserve DOES PRINT MONEY from nothing. Where does the Federal reserve get money to lend to depository institutions? Not from depositors, that's for sure.
Posted by innomen 1 year ago
innomen
There's nothing that the mod does with plagiarism. The offender should lose points as a result. If both sides want the debate removed, I can do that.
Posted by Mrparkers 1 year ago
Mrparkers
Yes, clearly I have no idea what I am talking about. I know you aren't committing copyright infringement, but you are demonstrating that you aren't capable of making an original argument by yourself. It's ok that you need other people to speak for you, just don't expect to win debates like that.

In any case, plagiarism is against the rules, and is usually an automatic win for the opposite side.

I urge everyone who is capable of voting to vote Pro because of Con's massive conduct errors.
Posted by IveGotUrOuts 1 year ago
IveGotUrOuts
This forum is nonprofit and only for educational purposes there is no copyright infringement kid does not know what he is talking about.
Posted by Scorbie 1 year ago
Scorbie
Dang son owned lol
5 votes have been placed for this debate. Showing 1 through 5 records.
Vote Placed by Wallstreetatheist 1 year ago
Wallstreetatheist
AlextheYoungaIveGotUrOutsTied
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Reasons for voting decision: RFD in comments
Vote Placed by Mrparkers 1 year ago
Mrparkers
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Reasons for voting decision: Conduct to pro because of plagarism. Con gave a lot of arguments, but didn't really address much of what the pro said. Pro did a better job outlining the negative aspects of the fed, and the con didn't do a great job responding to it.
Vote Placed by Gileandos 1 year ago
Gileandos
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Reasons for voting decision: Conduct point to Con due to Pro's use of language bias. Arguments to Con as well as I felt the usefulness of the Fed as a stabilizing agent was incredibly well done and convincing. Pro offered no meaningful replacement and did not meet the burden. I was even convinced by Con's argumentation.
Vote Placed by 16kadams 1 year ago
16kadams
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Reasons for voting decision: Conduct = plagiarism. BUT con mainly listed the functions of the fed, not what the fed has DONE. PRO proves that the feds job requirements which con listed out are useless if the fed fails to do its job, he proved his point that they have failed to do anything positive, and only negative. With this information we can assume PRO wins. He also showed its large power in an economy can be and has been detrimental, hence I vote pro.
Vote Placed by imabench 1 year ago
imabench
AlextheYoungaIveGotUrOutsTied
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Reasons for voting decision: being unable to meet its goals doesnt mean it should be abolished, maybe overhauled but not abolished. There is the issue of plagarism so i do give conduct to the pro, sources were pretty even, there wasnt a clear gap in spelling, glad to finally see a FED debate that didnt end in a bipolar shouting match *like*
Research this debate: Barack Obama