The Instigator
crutherford
Pro (for)
Losing
3 Points
The Contender
invertman
Con (against)
Winning
12 Points

The US needs to abolish the Federal Reserve.

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Voting Style: Open Point System: 7 Point
Started: 12/16/2007 Category: Politics
Updated: 9 years ago Status: Voting Period
Viewed: 1,377 times Debate No: 534
Debate Rounds (3)
Comments (4)
Votes (5)

 

crutherford

Pro

There is no reason why the US should be paying interest to a private group. Central banks around the world are the most corrupt institutions there are. If the US can issue a bond it can issue a currency.
invertman

Con

There are many reasons why the U.S. needs the Federal Reserve Bank, but I will open with these Five:

1) Bank functionality: The Federal Reserve is the "bankers bank"; when a person deposits money into the bank in a checking account, the vast majority of that money does not stay there. It either goes out via loans, vault cash, or, and most importantly, to a reserve account at the Federal bank. This account is protected by the Federal Reserve, insuring that a bank robbery would not destroy a banks cash. It protects Americans and their banks.

2) Check Clearing: the Federal Reserve bank clears all of the checks in America. When Suzie Q, who has an account at Bank of America, writes a check to Johnny Joe, who has an account at Washington Mutual, the banks do not argue with each other for the cash. Rather, the check is submitted to a Federal Reserve District Bank. The Federal reserve then withdraws the money from Bank of America's account there and deposits it in Washington Mutual' s account. This is an essential part of a functioning bank.

3) Issuing Paper Currency: The federal reserve does not print money, but it does issue currency to banks. For example, during the Christmas season, many people make larger than normal cash withdrawals. Banks need to replenish their vault cash, so they contact the Federal Reserve. The Federal Reserve then issues the bank cash while subtracting the amount of issued cash from their account. This insures banks have the vault cash they need while at the same time not acquiring any more currency than they already have.

4) The Governments Banker: Our government collects and spends an enormous amount of money. Like an individual, the government requires a checking account to do this. The Federal Reserve acts as the primary checking account holder, its banker. If the Federal Reserve were not in place, a myriad of private banks would be required for the governments checking accounts.

5) Control the money supply: our government has two ways to stimulate or constrict our economy, fiscal policy, handled by the Congress and Executive, and monetary policy, handled by the Federal Reserve. Through controlling the supply of money through a variety of operations, not just the Discount Rate, the Federal Reserve is able to quickly act in economic crisis, much quicker than the Congress or the Executive. It also has the added advantage of being an appointed body in that it is solely responsible for low inflation and sustained economic growth, and not trying to campaign for re-election every few years.

I would ask my opponent to review this information and provide realistic alternatives to banking and government given the essential, efficient and effective nature of the Federal Reserve Bank.
Debate Round No. 1
crutherford

Pro

One thing you need to understand is something called fractional reserve lending. the way this works is if you go to the bank and you deposit 1000 dollars the bank can then lend out 10,000 dollars AT INTREST!! if you or i were to do that its called fraud, which is a felony. This concept came about back about 500 years ago when the first paper currency was used. all is was, was a goldsmith would hold peoples gold for them in return he gave them a receipt which basically said you have x amount of money with me. well he relized that only about 10% of the people ever came to get there gold at one time. so he was then able to cheat they system and lend out money that he didn't have at interest. which is exactly how the banks work today. when the reserves get to low lets say the bank has a million and you want to buy a 300,000 house well they need to go the FED and borrow 30,000 then they can give you you mortgage.

how the FED makes money

1.The Fed open market committee approves the purchase of bonds.
2. Fed buys bonds from who is selling
3. Pays for the bond with electronic credits to the seller's bank, these credits are based on nothing, fed just creates them
4.Banks use these deposits as "reserves" they can loan out over 10 times the amount of there reserves to new borrowers all at interest.
Fed buys a million in bonds it gets turned into 10 million in bank accounts. To reduce money is economy is just the opposite.

Banking does not need to be fractional lending, it needs to be fractional lending for the bankers to make money and to control every major government in the world. but there is a simple solution to this problem that effects us all.

The reason they call it the "Federal" reserve is because they want people to think its part of the government. This bill was dead in 1910 when the bankers were trying to get this through congress. they had a meeting on Jekyll island off the coast of georgia, a secret meeting with big names, a young guy from princeton was there they told him that they would make him president if head would pass the Federal Reserve Act. His name was woodrow wilson, on december 23 1913, there were 3 senater still in office when the bill was brought up, nobody objected, it then went on to Wilson's desk on which he of course signed.

Monetary Reform Act-
1. pay off debt with debt free US notes
2. abolish fractional reserve banking, as debt is paid off, the reserve requirement of all banks and financial institutions would be raised proportionality at the same time.(stable money supply)
3. repeal Federal Reserve Act 1913 and National banking act of 1864- these delegate power back to treasury where it belongs these relate to fractional reserve.
4. Withdraw the US from IMF, the BIS (bank of international settlements) and the world bank- these are designed to centralize power of the global economy.

Money supply grows with population to keep prices stable ( if you didn't do that things would enter deflation period not good) 3% a year

Meeting of FED are secret, all things in new system would be open to the public.

here are a couple people that you might have heard of that also agree that bankers are the most corrupt people on earth and they control every major country.

Milton Friedman-"I know of no serve depression, in any country at any time, that was not accompanied by a sharp decline in the stock of money, and equally of no sharp decline in stock of money that was not accomplished by a severe depression" (the great depression was planned by bankers so they could then gain more control over businesses and media outlets, ex the washington post was purchased in 1933)

The Central Bank was put in place to create stability, instead its been a roller coaster, first 30 years 3 economic downturns including great depression(20-21, 29-33 and 38-39 no other period in history matches that, past 30 years has created massive inflation

"Give me control of a nation's money and I care not who makes it's laws." - Mayer Amschel Bauer Rothschild

"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 its issuance." -James Madison

"From now on, depressions will be scientifically created." - Congressman Charles A. Lindbergh Sr. , 1913

"...the increase in the assets of the Federal Reserve banks from 143 million dollars in 1913 to 45 billion dollars in 1949 went directly to the private stockholders of the [federal reserve] banks." - Eustace Mullins

A 1982 court ruling regarding the Federal Reserve Bank (LEWIS v. UNITED STATES, 680 F.2d 1239) came to this conclusion.
"Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Federal Reserve Banks are not federal instrumentalities for purpose of the FTCA, but are independent, privately owned and locally controlled corporations.

I want people to understand this issue, there is not a more important issue facing the world right now.

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." - President, Thomas Jefferson

"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." - Henry Ford

The bankers helped their friends establish monopolies in oil, chemicals, pharmaceuticals, transportation, media, etc. and took a healthy stake.

Few wealthy families Morgan, Rockefeller, Rothschild's

in 1800's the Rothchilds were thought to control 1/2 of the WORLDs wealth.(bankers) who helped create the "bank of england" haha also private

All wars are financed by bankers some are lucky enough to fund both sides of the war.

Rothschild's financed diamond monopoly in africa
Harriman's in railroads in US
Vanerbuilts in railroads and the press
Carnegie in the steel industry
WWI- JP Morgan thought to be richest man in America, but when he died they realized he was just a lieutenant to the Rothschild's. He only owned 19% of JP Morgan companies

real reason for the revolutionary war took away the power to print our own currency!! the founding fathers understand the bank of england.

In the american colonies Shortage of silver and gold.
1760's start with own currency-colonial script not backed by anything, it was successful medium of exchange.
Totally fiat currency
Franklin- "issue currency in property proportion to the demand of trade and industry to make products pass easily from producers to consumers"
Bank of england could not allow this.
Made it illegal-forced them to pay taxes in gold

The Rothchilds are no fools they relized Loaning money to govt and kings more profitable then to people, governments debt was secured tax payers.
First son- stayed in germany
Second son-vienna
Third son- most clever went to london-1798 Napoleon sent him 550,000 pounds to buy govt stock he didn't buy he invested it smarter- 1815 gave the king his money back with the interest he would have made with the investment he wanted. Rothschild made other much more profitable investments
he later brags to his buddies that in 17 years he took 20,000 which is father gave him to help start up the bank in england and explained it by 2500times or equalling 50,000,000

Mid 1800's the family dominated central banking
Forth son-naples
Fifth son-paris- worth 650 million french franks (150 million more then all the other banks in paris put together!)

if you have a hard time believing me, type in money masters in google video, its 3 1/2 hours.its amazing
invertman

Con

First, I want to point out that you did not answer my question to you about providing a viable alternative to the Fed's many non-monetary policy functions. You have provided no solution to check-clearing, no solution to issuing paper currency, no solution to a place for the governments massive checking account, and no solution to a place for a bank to keep its reserves besides vault cash. If you want to throw out the Fed, you have to provide answers these questions.

Second, lets stick to the point. Bringing up the IMF has nothing to do with a discussion on the merits of the Federal Reserve. Sticking in quotes from somewhat well known people does nothing to help your position either. Using someone with a severe ideological bias, like Milton Freidman (who I believe was a great economist by the way), is an appeal to a bad authority.

You enter into a long rant about the banking industry and its evils. This would be appropriate if we were debating how banks should be run, but we are not. We are only talking about the Federal Reserve, so bringing up the evils of bankers before the Federal Reserve even existed, like bankers financing monopolistic corporations, is completely irrelevant. If you want to have a discussion on banking in general, entitle the debate as such. I am not here to defend the history of banking, nor would I.

Now I will move onto fractional reserve lending.

First of all, you failed to note that the Required Reserve Ratio is set and enforced by the Fed, and can be changed. The Federal Reserve can raise or lower the amount, currently at 10% for all liabilities over 43.9 million. The number goes down with decreasing liability size.

Second, your statement "if you or i were to do that [loan out more money than we had on hand] its called fraud, which is a felony." This is not a fair comparison to banks because all legitimate banks are insured by the Federal Government. Lawmakers in this country decided banks would be allowed to conduct fractional reserve lending, and have also insured these banks so that people would not have to fear losing all of their funds if a "run" occurred. Now, should the Required Reserve Ratio be higher? Maybe, but once again, this is not a discussion on that particular issue.

Third, the Monetary Reform Act is completely impractical.

In the first issue, pay off the U.S. debt with debt free notes, how would this take place given the current debt in the United States? Also, this statement implies that somehow all debt is bad. Now, I think we would both agree that the state of our debt is out of control. However, some debt can be beneficial to our economy. Think, for example, the expansion of roads. These require high capital up front but relatively little later on. If the government were not allowed to get loans, it would have to spend years and years trying to scrape up the cash to build new roads. If they are allowed to get a large loan for capital, the whole process would proceed much quicker, and the government would still be able to pay back its debt over time. If everyone would be required to be debt free, how would anyone buy homes or start businesses? The same principle applies to the federal government.

The second part, abolish fractional reserve lending; you maintain that as the debt would be paid off and the required reserve ratio was increased, the money supply would remain stable. This is an extremely complex economic problem, and you have given no data to support that there is a direct relationship between the U.S. debt, the required reserve ratio, and the money supply. I am not going to argue on what I think would happen because I recognize that this is an advanced economic problem. However, I can say that you cannot claim that the abolition of fractional reserve lending would be in such a direct proportion to the payment of the U.S. debt that the money supply would remain "stable".

Third, repeal the Federal Reserve Act of 1913: as I have already said, you have not provided any alternative solutions to the other operations of the Federal Reserve which have nothing to do with monetary policy but are simply their to make our banking system more efficient and coherent.

Fourth, the final point in the bill has nothing to do with our discussion.

Throughout your response, you have made many economic claims which I would challenge. I am not saying you are wrong with these claims, but that if you do not provide any data or economic models to back up your claim, then I must assume you pulled it out of thin air. Here are the statements I would challenge you to provide me with data:
"Money supply grows with population to keep prices stable ( if you didn't do that things would enter deflation period not good) 3% a year"
"real reason for the revolutionary war took away the power to print our own currency!! the founding fathers understand the bank of england."
"In the american colonies Shortage of silver and gold.
1760's start with own currency-colonial script not backed by anything, it was successful medium of exchange.
Totally fiat currency"

In summary, I think it is clear that you have an issue with the banking industry, but this is not relevant to our discussion. Lets stick to the merits of the federal reserve itself.
Debate Round No. 2
crutherford

Pro

crutherford forfeited this round.
invertman

Con

Well, it's unfortunate this debate couldn't continue. I'm willing to continue any discussion about the Federal Reserve in the comments section.
Debate Round No. 3
4 comments have been posted on this debate. Showing 1 through 4 records.
Posted by revleader5 9 years ago
revleader5
crutherford had a great argument. If her had kept it up in the third round he would have easily won. I voted for Pro.
Posted by andrewsnell 9 years ago
andrewsnell
Rhetoric : The Pro fails to answer claims made by the Con, while the Con defends his contentions. The Pro tends to drift from the topic-at-hand to a more general discussion about conspiracy and greed in the banking industry. The Con tries to focus the debate. Winner: Con

Evidence: I would encourage both sides, especially the Pro, to check their sources and provide links to their research. As a person with a degree in economics who specialized in economic history, it seems like there is some confusion on how the banking industry works and how it evolved. Please note, a list of quotes, without context or link, does not evidence make. Winner: Con

Elocution: Again simply listing quotes and facts is not a good way to make an argument. The tone and structure of the Con's case was superior to that of the Pro. Winner: Con
Posted by clsmooth 9 years ago
clsmooth
This is my favorite subject.

ROUND 1

Pro makes the right argument (abolition) for the wrong reason. The main problem with the Fed is that it gives the government too much control over the currency -- you are arguing against the bank from the Left, saying that the government should have even more control. Of course, were this the case, the dollar would collapse almost immediately, since politicians would be unable to resist the urge to inflate even more (by far) than the Fed bankers.

Con confuses the FDIC (another horrible government program, producing "moral hazard") with the Fed. Otherwise, he understands the functions of the Fed better than most. However, functions like check clearing could be handled by the free market -- by the Fed itself, even in absence of its monopoly status.

Winner: Con. He addresses the advantages of the Fed that were not preemptively attacked by the Pro in Round 1. Pro ceded the terms of debate to Con, and Con effectively argued. It was not Con's job to show the downsides of these advantages, or to show that the functions could be provided by the free market. Thus, despite the fact I wholeheartedly disagree with Con, he clearly wins Round 1 (in a route).

ROUND 2

Pro changes the terms of the debate. In Round 1, he argued for direct government control over the currency. In Round 2, he's despairing over the Fed's power to create money. This is what he should have been doing in Round 1. However, some of the "conspiracy" elements presented in this round hurt the anti-Fed case. They are easy for pro-Fed people to attack, and they obfuscate the debate, discouraging people from seeing the truth and joining the anti-Fed movement.

Con stuck to the issues and brought the debate back to where it is supposed to be.

Winner: Con, easily.

See my debate on the Fed: http://www.debate.org...
Posted by iluvdb8 9 years ago
iluvdb8
dude, i would debate you, but i honestly know nothing on the subject...srry!!!
5 votes have been placed for this debate. Showing 1 through 5 records.
Vote Placed by invertman 9 years ago
invertman
crutherfordinvertmanTied
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revleader5
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ziege19
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andrewsnell
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clsmooth
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