The Federal Reserve should be dissolved out of existence for tyrannical Interest and Inflation
Debate Rounds (3)
"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States."
-Sen. Barry Goldwater
It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
"The regional Federal Reserve banks are not government agencies. "but are independent, privately owned and locally controlled corporations."
-Lewis vs. United States, 680 F. 2d 1239 9th Circuit 1982
"The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers."
-Congressman Louis T. McFadden
"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson."
-Franklin Delano Roosevelt
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it"s issuance."
"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs."
"The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe."
"Give me control of a nation"s money and I care not who makes it"s laws"
-Mayer Amschel Bauer Rothschild
The Federal Reserve is a partially privately owned bank, and it does, as BirdieMachine points out, have the ability to "print money from thin air and charge interest on that money to the Federal Government. " Moreover, and perhaps of equal concern, the Fed's private owners are the very same banks that it is supposed to regulate. Making this conflict of interest even worse, the little power that the President does have over the Fed (the power to appoint members of the Board of Governors and the Chairman, is often misused to appoint former employees of Goldman Sachs and Citi Bank, for instance. While we're on the subjects of banks, it's important for us to keep in mind that banks other than the Central Bank (i.e. the Federal Reserve) lend money into existence (by loaning out as much as 10 times more money than they have in deposits) through a practice known as Fractional Reserve Banking. I point this out because one crucial point in this debate is that the Federal Reserve is not the only actor in the tawdry system of debt based money. Simply eliminating the Federal Reserve will not put an end to the usury that puts individuals, businesses, and the government into far more debt than it needs to be.
Therefore I have developed a counter plan: Nationalize the Federal Reserve, put it under the control of the Treasury, and ban fractional reserve banking. This has been proposed before. From 1933 to 1935 it was proposed several times by economists at the University of Chicago, hence it's name: the Chicago Plan. It has even been proposed as legislation, most recently, I believe in the National Employment Defense Act (H.R. 2990). https://www.congress.gov.... This is not a partisan idea. People as conservative as Milton Friedman and as liberal as Dennis Kucinich have backed this proposal. I have one addition to the traditional Chicago Plan -- my counter plan would also ban the appointment of any Ex-employees of private banks to the Chairmanship of the Fed and to any position on the Board of Governors. Furthermore, one issue my opponent raised was Congressional Accountability. Once the Federal Reserve is part of the Treasury Department, Congressional supervision of the Treasury Department will extend to the Federal Reserve.
Before I go further in enumerating the advantages of my counter plan, I think that it is important to examine the flaws in the Proposition's proposal. The first issue with the proposal put forth by the Proposition is that it is either very vague or very simple. The clearest statement of the plan can be found in the title of this debate,"The Federal Reserve should be dissolved out of existence for tyrannical Interest and Inflation". The key words here are dissolved out of existence, and they are undefined. How will they be dissolved? Over what timeline? And here is the crux of the issue: What will replace the Federal Reserve? We are not informed about this. Are we going to simply go back to the Gold Standard, as is often advocated by Libertarian monetary reform advocates? We don't know. Is there any plan at all for what we do after abolishing the Federal Reserve, or is that the silver (W.J. Bryan! I hope some of you got the in joke) bullet solution that'll solve all of our monetary problems.
The second problem with this plan is that it says nothing about raising reserve requirements from 10% to 100%. (Ending Fractional Reserve Banking). I don't think that it would be fair for my opponent to amend the plan and include a ban of fractional reserve banking, because my opponent said nothing about it in the first round, and I accepted the challenge to this debate believing (based on my opponent's words) that the only component to this plan is "Ending the Fed". There wasn't even a hint in the first round that any of our monetary problems or solutions have anything to do with private banks like Goldman Sachs or Citibank.And that is what I prepared to debate. The Opposition has less ground to debate whenever the Proposition arbitrarily decides to add something to it's plan, esp. when the item added to the Proposition's plan was originally proposed in the Counter Plan (which was put forward, let us remember, by the Opposition). That not only makes debate unfair for the opposition, it also makes the debate less educational. The point of debate is to educate people on both sides of any given issue, as well as those people who are on the fence. Thus, adding a ban of fractional reserve banking defeats the very purpose of debate. Such an amendment to the Proposition's plan would warrant a vote for Con on the grounds of fairness, education, and value.
Even supposing that my opponent does suddenly decide to abolish all fractional reserve banking, who would enforce the new, stringent reserve requirements? The Federal Reserve has experience enforcing Reserve Requirements, lousy 10% requirements, granted, but that is because of how it is currently structured. Once we pass legislation requiring 100% reserve requirements, the Federal Reserve, under the Treasury Department's supervision, and indeed, under the supervision of Congress, will enforce the new reserve requirements. There may be more to come regarding flaws in my opponent's plan in the Second Round, once my opponent has had the chance to answer these questions, and once we have a clearer picture of the plan.
And now, here are a few contentions which argue for the counter plan:
Contention 1: My counter plan would put the Government, in direct control of the nation's money supply. This is warranted by the fact that the Federal Reserve would be nationalized and part of the Treasury Department, and that this will enable greater Congressional supervision of the Fed.
This has 2 main impacts.
i: This would mean the democratization of money. Ordinary people will have more power and sovereignty over money than they currently have.
ii: This would enable us to have debt free money creation, and would reduce the levels of personal, business, and governmental debt at all levels of government.
Contention 2: My counter plan would help promote a stable money supply, and by extension, a stable economy.
This is for two reasons: The first is that when the Government issues debt free money while it bans fractional reserve banking, the inflationary effects of the debt free money will be canceled out by the deflationary effects of banning fractional reserve banking. This is why the two policies go hand in hand.
Contention 3: By ending the private ownership of the Federal Reserve, by the banks that regulate it, and by banning the appointment of former bankers to key positions within the Fed, we will enable the Fed to regulate Wall Street more thoroughly than it has in the past. This will also promote economic stability for obvious reasons that can be elaborated in round to if necessary.. Moreover, my opponent's plan simply ends the Fed. It does not create any new agency that will be given the Federal Reserves regulatory powers, thus Pro's plan will deregulate Wall Street and increase the instability of the economy. If Pro suddenly decides to create a new agency with the Federal Reserve's regulatory powers, that would be unfair for the same reasons enumerated regarding a ban on fractional reserve banking, and it would warrant a vote for con for those very reasons.
I would like to thank BirdieMachine for making this debate possible. I'll be leaving the country on July 10th and I don't know if I'll be able to respond to arguments after that day.Pleaserespondearlythx
-I agree we need to end the Privately owned Central Bank Scam called the Federal Reserve.
-We need to audit the Fed thoroughly to try and find out how much they cheated and audit the owners where ever they are located, assets and all. Find out where all that money stolen has gone to buying up assets. Repossess stolen assets.
-I agree we need to end Fractional Banking (Fractional Banking allows Public Banks and especially the Big Banks to Gamble in the Markets with highly leveraged "Investments" like Derivatives. If those bets go bad the losses will be asked to be paid by the taxpayer Again. Fractional Banking is simply printing money you don't have and lending it, it could never be regulated enough so a Bankster doesn't cheat and add some zero's to his own offshore accounts.
-Through the control of Interest Rates and Inflation and Deflation the Federal Banksters know ahead of time what rates they will go to thus being able to place bets in the markets accordingly. Massive Insider information. We must end human controlled rate fixing.
-I DO NOT trust the Government to print and control the money supply either as a Fiat currency. Fiat meaning moneys value backed by nothing. When you have a currency that is backed by nothing it allows the creators to print money to themselves.
Money needs to actually be worth something other then what it's printed on. Worthless paper. It needs to be able to be exchanged for a tangible good or rare item like Gold.
What we need is not a monopoly but competition to move to a new system. I agree with Ron Paul. HR 1098: Free Competition in Currency Act of 2011 will essentially do three things: 1) repeal legal tender laws to remove the monopoly control of the Federal Reserve, 2) legalize private mints to issue coins to be controlled by anti-fraud and anti-counterfeit laws, and, 3) remove taxes from precious metal coins to ensure fair competition among new currencies.
Going back to "some" Silver and Gold Coins set at a specific value will help eliminate this money printing dilemma. You certainly could use the coins or alternate paper and digital currency. Money needs to have value.
First I'll address the arguments put forward by BirdieMachine, and hopefully I'll have enough space to elaborate on my own contentions. If I don't then I'll just extend my contentions, as they have not been refuted.
"I've read my opponents argument and he is on my side in eliminating the Federal Reserve". I don't want to split hairs here, because we do agree on many of the problems in the status quo, but I am not in favor of eliminating the Federal Reserve. I gave no indication that I was. I want to nationalize the Federal Reserve and ban Fractional Reserve Banking.
"I agree we need to end Fractional Banking..." Well, as I have said at greater length earlier on, adding part of my counter plan to the Props plan is unfair, it gives me less grounds for debate and it therefore makes this debate less educational. Pro did NOT even try to address the issue of fairness when Pro added a ban of FRB to the Proposition's plan. The voters can determine the fairness of this, and whether this is grounds to vote Con. Even if you deem that this is fair, I will give you many other reasons to vote Con.
"We need to audit the Fed thoroughly to try and find out how much they cheated and audit the owners... Repossess stolen assets." By nationalizing the Federal Reserve, all privately owned assets (in the Federal Reserve) would immediately belong to the U.S. Federal Government. In other words, repossession of stolen assets is already covered in my plan. Furthermore, once the Federal Reserve is part of the Treasury Department, Congressional oversight (and audits) will be much easier to implement.
" -Through the control of Interest Rates and Inflation and Deflation the Federal Banksters know ahead of time what rates they will go to thus being able to place bets in the markets accordingly." This is a serious problem, and it is addressed by my counter plan, which bans the appointment of ex-bankers to the Federal Reserve Board of Governors and to the Chairmanship of the Fed. Insider trading will be much harder once Goldman Sachs (for instance) loses its ability to have its people placed in positions of power in the Federal Reserve.
"I DO NOT trust the Government to print and control the money supply either as a Fiat currency. Fiat meaning moneys value backed by nothing. When you have a currency that is backed by nothing it allows the creators to print money to themselves. "
The proposition may chose not to trust the government to control a Fiat currency, that is Pro's business. But we ought to heed history. There have been numerous times in the past when government's directly issued Fiat currencies:
1. In 1100 AD, King Henry I used tally sticks as a fiat currency. These were sticks that had notches carved into them, denoting different amounts of money. It worked quite well. https://books.google.com...
2. In Colonial Pennsylvania, "colonial script" was issued as a government controlled fiat currency, and it worked quite well, as Benjamin Franklin and even (over the pond) Adam Smith observed. Moreover, ""The price level during the 52 years prior to the American Revolution and while Pennsylvania was on a paper standard was more stable than the American price level has been during any succeeding fifty-year period." https://21stcenturycicero.wordpress.com...
3. During the Civil War, Abraham Lincoln issued Greenbacks -- or U.S. dollar bills, as a fiat currency. There was some inflation but it was overall fairly successful. http://www.xat.org... Scroll down to the part about Lincoln to learn more.
My point is that history, which I consider to be a great laboratory of policies whose effects should be analyzed when we consider similar policies, shows that government controlled fiat currency has worked and often, quite well.
"It needs to be able to be exchanged for a tangible good or rare item like Gold." I confess that I was hoping for the opportunity to argue against the Gold Standard. Let us look at the history of gold based money systems. The manipulation of money, and the emergence of banking all began with the Goldsmiths. Goldsmiths didn't only make gold, they began to store people's gold in vaults. It was the goldsmith's idea to start lending out more gold than they had in reserve. This is how Fractional Reserve Banking began! https://en.wikipedia.org... Scroll down to history. Then when we get back to American history, the 1896 election was about the "battle of the standards." William Jennings Bryan and the Populists were against the prevailing Gold Standard because gold was very rare and it was easy for banks to manipulate the currency and to increase the debts of farmers and governments. Hence W.J. Bryan's prescient words, " Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business." http://historymatters.gmu.edu...
" 2) legalize private mints to issue coins". Alright, so the first problem with this is that when private entities control the money supply, the money supply can be manipulated and we still have the issues of usury, greater personal and national debt, basically all the stuff that was going on in the 1890s. Remember, even if money is based on gold or some other rare commodity, the issuer of money can, and throughout history has gotten away with, loaning out more money than it has in store. The second problem with private mints is that the decentralization of the money supply would probably lead to inflation. It's one thing if one entity is issuing money, but when we're dealing with multiple entities acting independently of each other, without coordinating their activities, the right hand won't know what the left hand is doing and we'll have financial chaos. The third issue with this is that from the 1830s to the 1860s, when many different state and commercial banks were issuing different types of currency, counterfeiting money was much easier, and it was a bigger problem. It's much easier to police counterfeiting when you're dealing with one currency than when you're dealing with five, ten, or more. For a more contemporary example look at Zimbabwe and the problems they are having with eight currencies: http://www.bbc.com...
These arguments are not gold specific. Any rare metal can be manipulated by the private mints. Remember, bankers were originally humble goldsmiths -- private mints will go the same way.
My opponent's plan does not address the issue of regulation. The Federal Reserve has regulatory powers, if it is abolished and if those powers are not transferred to another entity (and my opponent's plan does not transfer those powers to another entity) then Wall Street will be less regulated, and will probably manage away to muscle it's influence into those private mints. Even if Wall Street doesn't do that, deregulating Wall Street is part of what led to the recession, and we need to remember that when we consider deregulation.
I extend my three contentions, which went unaddressed by my opponent.
Once again, I'd like to thank BirdieMachine for making this debate possible, and I look forward to hearing the next argument. Thanks for promptly responding in Round 2, and please do thesameagain
Your plan does not address the issues of Fiat currency and it's worthlessness overtime. Since 1913 the Value of the Dollar has gone down 98% and the Debt the Federal Government owes has gone up over 5000 times. Yes you read that correctly. 98% and 5000 times. A Millionaire meant being wealthy not to long ago. Now in certain places you'd be hard pressed to find a 1500 sq foot shanty for a million dollars.
You can't print yourself Silver and Gold. They have intrinsic value while paper or digital money does not. My solution is to do away with Fiat currency and it's inevitable collapse through Inflation/Hyperinflation. The average life span of a Fiat currency is 26 years. You don't get that with Silver and Gold. An ounce of Gold 100 years ago would buy yourself a nice tailored suit. Just as it would today (current value ~1300 USD).
Returning to a Gold backed currency is one step but I do include Silver coins as well just for more stability.
I would also like to implement that the money creator owners and employees be regulated to unparalleled highly transparent auditing and oversight. I mean that making the peoples tax records public, assets public and even an open to the public free tour of the Mint and Paper making areas. Transparency is king and secrecy is corrupt.
You can't print Silver and Gold. Return to real money that has value.
2. D&D (Democracy and Debt)
3. Monetary Stability
4. Regulation and (this word will be key) Enforceability
First let's look at the issue of fairness. When I included a ban of fractional reserve banking in my counter plan, I argued that it would be unfair for the Proposition to add that to the Pro plan. This was added to the proposition plan, without any explanation of why it was fair at any point in the debate. Okay, you may say, he did that in Round 2, stop winging. Well, I'm not terribly bent out of shape about it. But there is something else that Pro did that is far more unacceptable. In the final round of the debate, my opponent added a new component to the Proposition's plan -- "money creators and employees be regulated to unparalleled highly transparent auditing and oversight. I mean that making the peoples tax record public, assets public, and even an open to the public free tour of the mint and paper making areas." I've combed over Pro's statements in rounds 1 and 2, and I could not find a single mention of making tax records, assets, and (the physical spaces of) mints public. One rule that has governed every debate format I've ever participated in is that nobody can bring any new arguments to the table in the final round. You can present new evidence and analysis to back up old arguments but new arguments cannot be brought to the table as they give the other side insufficient time to respond. This is doubly true with regards to Plans that are being debated. By adding something to the plan in the last round, Pro has (unwittingly -- I don't question pro's motives) insured that throughout the debate, the Con side didn't know precisely what plan it was debating against. Now this is ultimately up to you. You may say, BirdieMachine is new to debate.org so I won't vote based on unfair conduct in this debate, or you may say that voting based on the fairness of a debate is the best way to teach new folks about our rules. But regardless of whether this is a voting issue for you, this new plank in Pro's plan NEEDS to be inadmissible.
Enough about the rules already, you damned school marm! Alllllrighty then, let's move onto some other issues.
The second voting issue is D&D -- Democracy and Debt. As I pointed out in my first contention which was never directly addressed (while, in fairness, one of my opponent's brand new closing arguments did partially -- and indirectly, counter it) U.S. Government control of the money supply would help democratize the monetary system and reduce the national debt. (Along with personal and business debts). Part of our Democracy/Republic must be popular sovereignty over monetary policy. As W.J. Bryan put it, the issue isn't that the government needs to get out of the banking business -- the banks need to get out of the governing business. Giving a democratically elected government the right to control it's money supply is the key to empowering the people. This democratization will not happen if we pass off control to private mints. My opponent tried to critique a government fiat money system by saying that there was a 5,000 fold increase in the National Debt since the Federal Reserve came into existence. Well, yes, when you have a private central bank that can issue as much money as it wants -- as debt that the government has to borrow, exponential growth in our national debt isn't surprising. Once the government can issue itself money, without borrowing that same money from a private Federal Reserve and from other banks, it will be able to gradually reduce the National Debt. I've pointed this out before, but if you don't believe me, then look at this IMF study as supportive evidence of my first contention: "Our analysis finds that the government is left with a much lower, in fact negative, net debt burden." http://www.telegraph.co.uk... Negative net debt burden, or in other words, we'd have a surplus. Not just a budgetary surplus for fiscal year x -- our government would not be in any debt, it may even have extra money. That isn't my claim. That's what the IMF is saying. It certainly won't happen overnight. We can't just print 19 trillion dollars and pay off all of our creditors because than we'd have hyperinflation. But over a few decades we can eliminate our national debt. I never said that we should dissolve the Federal Reserve out of existence, but I do say this: if we nationalize the Federal Reserve and ban Fractional Reserve banking, we CAN dissolve the National Debt out of existence. My opponent has offered us no reason to believe that his plan would dissolve any of our currently existing debt -- and if the government is not issuing debt free currency, than it's monetary policy would not have any effect on it's debts. I would love to elaborate about all of the positive economic implications of this surplus, but I don't want to introduce any new arguments. Connect the dots. This is a major reason to vote Con.
The third voting issue is monetary stability. Throughout this debate my opponent has insisted that ANY fiat currency is bad, regardless of who controls it. And throughout this debate I have maintained that a privatized money supply -- whether fiat or gold -- is a recipe for disaster. My opponent used one example of a fiat currency which doesn't work -- a privately controlled fiat currency. I have pointed to three government controlled fiat currencies that did well. One of these government run fiat currencies was Pennsylvania's Colonial Scrip-- and Princeton economist Richard Lester found that during the fifty two year long period that the Scrip was in circulation, prices were more stable than they were during any other fifty year period in U.S. history. Now he said that in 1938, mind you, but since than we've had plenty of inflation since then so the point still stands. I have also pointed to times throughout history when gold was manipulated - by Goldsmiths in the 1660s and later by Bankers in the 1890s. The Proposition did not address any historical arguments, either pro fiat or anti gold. My opponent never furnished us with an example of a government run fiat currency that did badly. Finally, the proposition didn't address my point about the instability, chaos, and undetected counterfeiting that we'll have when multiple mints are issuing different currencies at the same time. Just look at what's happening in Zimbabwe.
Finally, the fourth voting issue for you to consider in today's debate is regulation/enforceability. The first regulatory issue is that when we nationalize the Fed and ban ex bankers from running it, we remove a major conflict of interest that often gets in the way of thorough Wall Street regulation. Second, by getting rid of the Fed, we'd be getting rid of an agency with certain powers to regulate Wall Street. Pro would not only get rid of the Federal Reserve, Pro never mentioned any transfer of regulatory powers to another agency. In other words, Pro's policy would deregulate Wall Street, and that didn't work well before 2008. Even when Pro embraces 100% reserve requirements, tax/asset audits, etc., Pro never specifies who will enforce those reserve requirements, or who would audit taxes. This points to a much larger issue in Pro's plan. We don't know how it'll ever be enforced; the plan has remained so vague throughout this debate that we learned new details in the final round -- this isn't just a fairness issue, it's a feasibility issue. This debate boils down to what will work in the real world. Vote Con.
That being said, thank you, BirdieMachine, for an awesome debate!
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