The Instigator
TheMarketLibertarian
Con (against)
Winning
3 Points
The Contender
FllippR
Pro (for)
Losing
0 Points

The Federal Reserve:

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
TheMarketLibertarian
Voting Style: Open Point System: 7 Point
Started: 2/15/2017 Category: Economics
Updated: 1 year ago Status: Post Voting Period
Viewed: 443 times Debate No: 99958
Debate Rounds (5)
Comments (0)
Votes (1)

 

TheMarketLibertarian

Con

The resolution is that the Federal Reserve should be abolished and replaced with a free market monetary system. Pro, who is opposing this, will make the first argument.
FllippR

Pro

True, the federal reserves has been a subject to a lot of criticisms and conspiracies. Most notably the Rothschild family conspiracy. But To say that it should be abolished is not a smart move in every angle. Here's my argument.

The United States economy is already structured and the foundations has been already been in place. There's no point of replacing it. Simple.

"Why replace something that already works?"
Debate Round No. 1
TheMarketLibertarian

Con

THE FEDERAL RESERVE VIOLATES THE CONSTITUTION OF THE UNITED STATES:
Article 1 Section 8 Clause 5 of the Constitution states:
"Congress shal have the power... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."
The power to coin money is granted to congress under the Constitution, not to the Federal Reserve- neither is congress ever gven the power to transfer any of its powers to another entity of government, let alone a private corporation under the Tenth Amendment, which states:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
The Constitution never gives the Federal Government the power to create a Central Bank, this power is additionally prohibited to the States according to Article 1 Section 10 of the Constitution, which states:
"No State shall... 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."
Therefore, a Central Bank of any kind, whether Federal or State, is completely unconstitutional.


FllippR

Pro

The thing is, the congress doesn't print money, loan the government and do what the Federal Reserve already do. Abolishing it would result years of economic uncertainty because you just can't replace it overnight.

And no, the federal reserve is constitutional. On Dec. 23 1913, the United States president Woodrow Wilson signed the Federal Reserve Act into law, thus creating the Federal Reserve.

Section 13. Powers of Federal Reserve Banks
1. Receipt of deposits and collections
Any Federal reserve bank may receive from any of its member banks, or other depository institutions, and from the United States, deposits of current funds in lawful money, national-bank notes, Federal reserve notes, or checks, and drafts, payable upon presentation, or other items, and also, for collection, maturing notes and bills; or, solely for purposes of exchange or of collection, may receive from other Federal reserve banks deposits of current funds in lawful money, national-bank notes, or checks upon other Federal reserve banks, and checks and drafts, payable upon presentation within its district, or other items, and maturing notes and bills payable within its district; or, solely for the purposes of exchange or of collection, may receive from any nonmember bank or trust company or other depository institution deposits of current funds in lawful money, national-bank notes, Federal reserve notes, checks and drafts payable upon presentation or other items, or maturing notes and bills: Provided, Such nonmember bank or trust company or other depository institution maintains with the Federal reserve bank of its district a balance in such amount as the Board determines taking into account items in transit, services provided by the Federal Reserve Bank, and other factors as the Board may deem appropriate; Provided further, That nothing in this or any other section of this Act shall be construed as prohibiting a member or nonmember bank or other depository institution from making reasonable charges, to be determined and regulated by the Board of Governors of the Federal Reserve System, but in no case to exceed 10 cents per $100 or fraction thereof, based on the total of checks and drafts presented at any one time, for collection or payment of checks and drafts and remission therefor by exchange or otherwise; but no such charges shall be made against the Federal reserve banks.

[12 USC 342. As amended by act of Sept. 7, 1916 (39 Stat. 752), which completely revised this section; June 21, 1917 (40 Stat. 234); and March 31, 1980 (94 Stat. 139). With respect to the receipt by Reserve Banks of checks and drafts on deposit, see also this act, section 16.]

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2. Discount of commercial, agricultural, and industrial paper
Upon the indorsement of any of its member banks, which shall be deemed a waiver of demand, notice and protest by such bank as to its own indorsement exclusively, any Federal reserve bank may discount notes, drafts, and bills of exchange arising out of actual commercial transactions; that is, notes, drafts, and bills of exchange issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used, or are to be used, for such purposes, the Board of Governors of the Federal Reserve System to have the right to determine or define the character of the paper thus eligible for discount, within the meaning of this Act. Nothing in this Act contained shall be construed to prohibit such notes, drafts, and bills of exchange, secured by staple agricultural products, or other goods, wares, or merchandise from being eligible for such discount, and the notes, drafts, and bills of exchange of factors issued as such making advances exclusively to producers of staple agricultural products in their raw state shall be eligible for such discount; but such definition shall not include notes, drafts, or bills covering merely investments or issued or drawn for the purpose of carrying or trading in stocks, bonds, or other investment securities, except bonds and notes of the government of the United States. Notes, drafts, and bills admitted to discount under the terms of this paragraph must have a maturity at the time of discount of not more than 90 days, exclusive of grace.

[12 USC 343. As amended by act of Sept. 7, 1916 (39 Stat. 752), which completely revised this section; and by act of March 4, 1923 (42 Stat. 1478). As used in this paragraph the phrase "bonds and notes of Government of the United States" includes Treasury bills or certificates of indebtedness. (See act of June 17, 1929, amending section 5 of Second Liberty Bond Act of Sept. 24, 1917). As to eligibility for discount under this paragraph of notes representing loans to finance building construction, see this act, section 24).]

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3. Discounts for individuals, partnerships, and corporations
In unusual and exigent circumstances, the Board of Governors of the Federal Reserve System, by the affirmative vote of not less than five members, may authorize any Federal reserve bank, during such periods as the said board may determine, at rates established in accordance with the provisions of section 14, subdivision (d), of this Act, to discount for any participant in any program or facility with broad-based eligibility, notes, drafts, and bills of exchange when such notes, drafts, and bills of exchange are indorsed or otherwise secured to the satisfaction of the Federal Reserve bank: Provided, That before discounting any such note, draft, or bill of exchange, the Federal reserve bank shall obtain evidence that such participant in any program or facility with broad-based eligibility is unable to secure adequate credit accommodations from other banking institutions. All such discounts for any participant in any program or facility with broad-based eligibility shall be subject to such limitations, restrictions, and regulations as the Board of Governors of the Federal Reserve System may prescribe.

As soon as is practicable after the date of enactment of this subparagraph, the Board shall establish, by regulation, in consultation with the Secretary of the Treasury, the policies and procedures governing emergency lending under this paragraph. Such policies and procedures shall be designed to ensure that any emergency lending program or facility is for the purpose of providing liquidity to the financial system, and not to aid a failing financial company, and that the security for emergency loans is sufficient to protect taxpayers from losses and that any such program is terminated in a timely and orderly fashion. The policies and procedures established by the Board shall require that a Federal reserve bank assign, consistent with sound risk management practices and to ensure protection for the taxpayer, a lendable value to all collateral for a loan executed by a Federal reserve bank under this paragraph in determining whether the loan is secured satisfactorily for purposes of this paragraph.
The Board shall establish procedures to prohibit borrowing from programs and facilities by borrowers that are insolvent. Such procedures may include a certification from the chief executive officer (or other authorized officer) of the borrower, at the time the borrower initially borrows under the program or facility (with a duty by the borrower to update the certification if the information in the certification materially changes), that the borrower is not insolvent. A borrower shall be considered insolvent for purposes of this subparagraph, if the borrower is in bankruptcy, resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding.
A program or facility that is structured to remove assets from the balance sheet of a single and specific company, or that is established for the purpose of assisting a single and specific company avoid bankruptcy, resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding, shall not be considered a program or facility with broad-based eligibility.
The Board may not establish any program or facility under this paragraph without the prior approval of the Secretary of the Treasury.
The Board shall provide to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives--
not later than 7 days after the Board authorizes any loan or other financial assistance under this paragraph, a report that includes--
the justification for the exercise of authority to provide such assistance;
the identity of the recipients of such assistance;
the date and amount of the assistance, and form in which the assistance was provided; and
the material terms of the assistance, including--
(aa) duration;
(bb) collateral pledged and the value thereof;
(cc) all interest, fees, and other revenue or items of value to be received in exchange for the assistance;
(dd) any requirements imposed on the recipient with respect to employee compensation, distribution of dividends, or any other corporate decision in exchange for the assistance; and
(ee) the expected costs to the taxpayers of such assistance; and
once every 30 days, with respect to any outstanding loan or other financial assistance under this paragraph, written updates on--
the value of collateral;
the amount of interest, fees, and other revenue or items of value received in exchange for the assistance; and
the expected or final cost to the taxpayers of such assistance.
The information required to be submitted to Congress under subparagraph (C) related to--
the identity of the participants in an emergency lending program or facility commenced under this paragraph;
the amounts borrowed by each participant in any such program or facility;
identifying details concerning the assets or collateral held by, under, or in connection with such a program or facility,
Debate Round No. 2
TheMarketLibertarian

Con

Woodrow Wilson passed a bill making the Federal Reserve Constitutional? Was this a constitutional amendment- because a regular bill can't do that, you need to introduce it as a constituitional amendment, and get a 2/3rd majority in both the House and the Senate, none of which were done.

Abolishing the Federal Reserve would create uncertainty, but so did abolishiong slavery- which was abolished over night, and though there was panic in the short term, most people would agree that this was the best decision.
FllippR

Pro

Slavery was a case of human mistreatment, and I am glad that it has been abolished. But we are talking about an economic issue here. Slavery did not have a central department sort-of thing to be worried about. Unlike the federal reserve, slavery did not also have a strong foundation. It was just a decentralized system with no strong foundation to be supported with.
Debate Round No. 3
TheMarketLibertarian

Con

What does that have to do with anything? I made the case that the Federal Reserve is unconstitutional, which means it should be abolished, you haven't refuted that thus far.
FllippR

Pro

It is constitutional, End of.
Debate Round No. 4
TheMarketLibertarian

Con

Article 1 Section 8 Clause 5 of the Constitution states:
"Congress shal have the power... To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."
The power to coin money is granted to congress under the Constitution, not to the Federal Reserve- neither is congress ever gven the power to transfer any of its powers to another entity of government, let alone a private corporation under the Tenth Amendment, which states:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
The Constitution never gives the Federal Government the power to create a Central Bank, this power is additionally prohibited to the States according to Article 1 Section 10 of the Constitution, which states:
"No State shall... 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."
Therefore, a Central Bank of any kind, whether Federal or State, is completely unconstitutional.
FllippR

Pro

A president is given the right to execute commands without the consent of the lower house like the Congress. It can bypass any law, hence Trump's immigration ban on some Muslim majority countries. That means that a president can make a central governing body on economy just like, or exactly like the Federal Reserve.
Debate Round No. 5
No comments have been posted on this debate.
1 votes has been placed for this debate.
Vote Placed by Theguy1789 1 year ago
Theguy1789
TheMarketLibertarianFllippRTied
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Total points awarded:30 
Reasons for voting decision: Con made the case that the Federal Reserve is unconstitutional, Pro then responded to this by saying that it was because congress passed a law, which Con then refuted, and Pro responded to by saying that it is constitutional, and that that was it. Con made an argument, Pro did not- therefore arguments to pro.