The Instigator
Yakaspat
Pro (for)
Losing
26 Points
The Contender
Rumsy
Con (against)
Winning
43 Points

We should to get rid of the Federal Reserve.

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Voting Style: Open Point System: 7 Point
Started: 8/15/2009 Category: Politics
Updated: 5 years ago Status: Voting Period
Viewed: 7,791 times Debate No: 9228
Debate Rounds (2)
Comments (19)
Votes (13)

 

Yakaspat

Pro

We need to get rid of the Federal Reserve of America so that the money authority can be rightfully be returned to the American People. The Federal Reserve is not federal at all. It is outside our government.

The Federal Reserve loans it's money to the Government at an interest, so we have to pay the money back to them, obviously. But what about the interest that we have to pay back to them? We get the money to pay the Fed back from the Fed of course! It is this vicious cycle of endlessly borrowing money to pay of the debt of the previous money that you borrowed from the same people that will ultimately get us into a situation like the Wiemar Republic or Zimbabwe. Where we are in Hyperinflation. This means that the national currency is worth next to nothing.

Also, if you think about it... the money doesn't even exist! If you have to pay off a debt for money, where do you get more money from? Simple, the Fed creates it out of thin air. It's not that hard to do, since 90% of our money is digital.

This is not a crazy conspiracy, it's common sense to think about things like this. It has happened before in the Wiemar Republic and Zimbabwe.

Thanks in advance to who accepts this debate.
Rumsy

Con

Im sure everyone agrees, thank you for posting this debate and for the chance to become more knowledgeable in this topic. In the first round I will be addressing why The Federal Reserve System is important, and thus why it should be kept in place. In later rounds I will address my opponents criticisms on the system.

Background on the Federal Reserve System [1]:

The Fed's primary policy-making group is the seven-member Board of Governors. Appointed by the president and confirmed by the Senate, members serve for one fourteen-year term only. A member who is appointed to fill an unexpired term may be appointed for an additional full term. From among the seven members, the Board's chairman and vice chairman are also appointed and confirmed by the president and the Senate for four-year terms.

Central banking system in the United States, the "Fed," established by the Federal Reserve Act of 1913 and comprising the 12 district Federal Reserve Banks and their 24 branch offices, the Federal Reserve Board of Governors in Washington, D.C., the Federal Open Market Committee, the Federal Advisory Council, and member banks owning stock in one of the 12 Federal Reserve Banks. National banks are required by law to own stock in the Federal Reserve Bank in their region. State chartered banks have the option of becoming member banks, although only about 1,100 state chartered banks have done so.

As its name implies, the Federal Reserve System is a federal central bank, with operational responsibilities shared by the Board of Governors and the 12 regional banks. The Federal Reserve System regulates the cost and availability of bank credit through Monetary Policy decisions of the Federal Open Market Committee; sets the Discount Rate banks pay when borrowing from a Federal Reserve Bank; approves interstate banking mergers; supervises bank holding companies, and oversees international banking operations through agreements with other central banks

I strongly urge anyone interested in this to read over the information on that site.

The Federal Reserve is important because of its responsibility to carry out these four duties [2]:
1. Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates;

2. Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers;

3. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets;

4. Providing 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.

Monetary Policy - [3]
Monetary policy is the process by which the government, central bank, or monetary authority of a country controls (1)the supply of money, (2) availability of money, and (3) cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.

1. The Federal Reserve largely regulates monetary policy of the country discretely, without need to go through lengthy Congress approval. The other option, referred to as Fiscal policy, is the changes in the taxing and spending of the federal government. The process takes so long, that by the time it is set into place, the economy has already changed drastically. So although some may see this as giving The Federal Reserve too much power over the economy, it is much more a safety net, to balance out the economy. [5]

2. Simply put, there are many policies in place by Congress and The Federal Reserve to protect the "American People" from things such as bank 'bounce' loans, mortgage markets, and mortgage related fraud. Another major one, The Federal Reserve develops rules that your bank must follow to keep your financial records private. [4]

3. The Federal Reserve is largely in place to help neutralize the effects of inflation, and prevent a large-scale failure of banking systems. To help prevent inflation, they work mostly in the short-term hoping to effect the long-term and interest rates are often raised. [6] For other examples of how The Federal Reserve regulates short-term economic growth through repurchase agreements and treasury securities. [7]

4. Also simply put, The Federal Reserve offers financial services to your government, your bank, and in a sense you. Its the nation's central bank, and as such, is granted special privileges, and immense responsibility.

I think it is also very important that I state this in round one. It is hard to say that The Federal Reserve is outside government control. That is very much like saying that the Supreme Court is out of government control. The Board of Governors is appointed by the executive branch, and approved via the legislative branch. Very similar to the Supreme Court Justices. The Federal Reserve works outside of government influence as much as The Supreme Court does.

And lastly, I must ask my opponent, if he still thinks The Federal Reserve System should be abolished, to explain in some detail a possibly better system he may have come up with, and its advantages.

[1] http://www.answers.com...
[2] http://en.wikipedia.org...
[3] http://en.wikipedia.org...
[4] http://books.google.com...
[5] http://faculty.etsu.edu...
[6] http://www.house.gov...
[7] http://www.econbrowser.com...
Debate Round No. 1
Yakaspat

Pro

I'd like to thank my opponent for accepting my debate.
----------------------------------------------------------------
"It is hard to say that The Federal Reserve is outside government control."
No it is not actually. It's quite easy to say so when they don't have to answer the government. They don't even have to tell us how much money they make. This is why people like Ron Paul are trying to get bills passed in the House of Representatives that would audit the Fed. Which simply means that we would be able to figure out much money the printed.

"The Federal Reserve is largely in place to help neutralize the effects of inflation, and prevent a large-scale failure of banking systems."
Again, the Fed is printing or creating mass amounts of money out of thin air to help the government pay off the debt to them. As we all know, creating money out of nowhere brings initial prosperity in the market, but after that money loses it's value do to the inflation that it caused, there is usually a recession afterwords. Also, this system is making the poor poorer because the government fails to increase the minimum wage to meet with the inflation.

"The Federal Reserve largely regulates monetary policy of the country discretely, without need to go through lengthy Congress approval."
Again, this points out how the Fed is outside of Government control. I think it is important for congressional approval before the Fed starts printing up billions or even trillions of dollars.

"Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets"
I find this quote ironic because the Fed caused all the economic problems ever since it's creation. The most notable one being the Great Depression. The cause these recessions and depressions to buy out smaller banks and institutions.

"And lastly, I must ask my opponent, if he still thinks The Federal Reserve System should be abolished, to explain in some detail a possibly better system he may have come up with, and its advantages."
This is a simple question. You replace the Fed with U.S. Treasury Control and replace the Federal Reserve Notes with United States Notes. Thus bringing the money control of the nation back to the congress, where it rightfully belongs according to the Constitution.

Now, many notable presidents have warned us of the dangers of having a Central Bank. Two of which have abolished Central Banks during their terms as president. These presidents are Thomas Jefferson and Andrew Jackson.

"The bold effort the present bank had made to control the government ... are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it." -Andrew Jackson

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs. If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." - Thomas Jefferson

Thanks you again for accepting this debate.
Rumsy

Con

"Now, many notable presidents have warned us of the dangers of having a Central Bank. Two of which have abolished Central Banks during their terms as president. These presidents are Thomas Jefferson and Andrew Jackson."

Your facts are a tad bit off, while Thomas Jefferson has made a famous quote about central banks which you have inevitably posted, he has never abolished any. The First Bank was signed into law by one very eclipsing founding father, George Washington, and Hamilton who pushed it forward. The First Bank of the United States 20 year charter ran up for renewal, and was denied by Congress. The Second Bank of the United States, which was created partly to stabilize inflation after the War of 1812, was destroyed by Andrew Jackson via vetoes in 1833. It should be noted that a large group of congressmen, formed their own party in attempts to override Jackson's veto. It should also be noted, that they were talking about completely different central banks.[1]

"No it is not actually. It's quite easy to say so when they don't have to answer the government. They don't even have to tell us how much money they make. This is why people like Ron Paul are trying to get bills passed in the House of Representatives that would audit the Fed. Which simply means that we would be able to figure out much money the printed."

The Office of Inspector General is charged with auditing The Federal Reserve, and The Federal Reserve often keeps its records private for about 5 years before releasing them to the public. Congress can directly force The Federal Reserve to release its records after 5 years if they the Reserve withholds them.[2] Secondly, The Federal Reserve prints no currency, Department of the Treasury print currency.[4] The Federal Reserve simply buys government bonds for a small price, or sells them, creating an increase or decrease in interest rates.[3] Ron Paul's attempts to fully audit The Federal Reserve is very popular among libertarians, but could have dire consequences. First I would like you to deeply consider that Thomas Jefferson also did not believe in a strong federal government. By fully auditing The Federal Reserves, central government could influence monetary policy. I will emphasize this connection again, The Federal Reserve is as much a part of the government as The Supreme Court, without being directly influenced by it. The Federal Reserve is granted any and all of its authority by Congress. Congress may pass laws, and enact them on The Reserve, and has done so 12 times already [1]. The Reserve is both private and public [8], it does not run amuck in the global economy, causing inflation and spitting on poor children everywhere it goes.

"Again, this points out how the Fed is outside of Government control. I think it is important for congressional approval before the Fed starts printing up billions or even trillions of dollars."

The Federal Reserve pays off all of its expenses and returns the profit to the U.S. Treasury. In 2008, The Reserve handed over the 31.7 billion dollar profit to the Treasury.[1] In the first round I gave a website that explained in great detail the reasons its important for the Federal government to "create money". The Federal Reserve must regulate the amount of cash in circulation to stabilize the economy. [6]

"This is a simple question. You replace the Fed with U.S. Treasury Control and replace the Federal Reserve Notes with United States Notes. Thus bringing the money control of the nation back to the congress, where it rightfully belongs according to the Constitution."

This would be giving your government direct control over the economy, as The Federal Reserve is a more indirect control, which must operate within restrictive bounds of government policy. The Constitution was in part set in place to restrict government powers, if you think about it, you're suggesting handing it over to them. And no, originally the Constitution was interpreted as following. The federal government is not granted the power to issue paper currency. This was changed by Abraham Lincoln during the Civil War. [5]

"I find this quote ironic because the Fed caused all the economic problems ever since it's creation. The most notable one being the Great Depression. The cause these recessions and depressions to buy out smaller banks and institutions."

Okay while I can't quite understand the second sentence (please rephrase, check spelling, etc.),
I can address the first. The Federal Reserve did not cause the Great Depression, but has been blamed for causing it due to its inaction. Inaction from government policy and regulation at the time, which put a pressure on the Federal Reserve and a limit on the allowable credit the Reserve was allowed to introduce into the economy.

[1] http://en.wikipedia.org...
[2] http://www.federalreserve.gov...
[3] http://wiki.answers.com...
[4] http://www.treas.gov...
[5] http://en.wikipedia.org...
[6] http://www.econbrowser.com...
[7] http://en.wikipedia.org...
[8] http://www.federalreserve.gov...
Debate Round No. 2
19 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Shtookah 4 years ago
Shtookah
I say nationalize not abolish.
Posted by Rumsy 5 years ago
Rumsy
We're both Conservatives ZT, and we both agree to N/S anything on Global Warming. Practically brothers. Besides, im a pretty easy going guy, you should be flattered. :P
Posted by ZT 5 years ago
ZT
You think I could be Rumsy's second account? I'm not sure whether that's a good or a bad thing.
Posted by Yakaspat 5 years ago
Yakaspat
Thanks for the advice heart, and thanks for the debate Rumsy. I'm not too good at debating, and my 0 to 3 proves that. :D And you're right about ZT there Rumsy, he is very much you're style.
Posted by Rumsy 5 years ago
Rumsy
I originally accepted, and until I posted my arguments in Round 2, didn't realize there were'nt 3 rounds. Lol.
Posted by heart_of_the_matter 5 years ago
heart_of_the_matter
RFD: Agree with B/A= PRO, Conduct = Tied, Spelling/Grammar = Con, Arguments = Con, Sources = CON.

Yakaspat - while I agree with your contention and I am very thankful that you chose to debate this topic and I think you did well, but, I think Rumsy did a little better than you on the arguments (which is what I mostly care about).
I would have liked to have seen at least 3 rounds of debate as well...I think you could have countered some of CON's arguments or elaborated and explained your points more if you had more room...

I think PRO has plenty of other things that can be brought up to support the resolution...things such as Abraham Lincoln creating the Greenback to finance the Civil War rather than pay interest at 28% to the bankers...
Other interesting side topics include the assassinations or attempts on 9 Presidents who have tried to abolish the Fed. Also the issue of fractional banking would be well to be discussed and brought to light too...
As far as George Washington I think this quote by him could have been used as well "We should avoid...the depreciation of our currency; but I conceive this end would be answered, as far as might be necessary, by stipulating that all money payments should be made in gold and silver, being the common medium of commerce among nations. (Fitzpatrick, Writings of George Washington, 11:217)

in any case thank you to both of you for debating this interesting topic!
Posted by Rumsy 5 years ago
Rumsy
Lol. I don't even know ZT (Although I like his style :D). I haven't put any work into my profile because its a debate site, and im friends with Logical and Nags just like a couple hundred other users on this site. I also havent commented on this debate, because I pretty much said everything I needed to about the topic. If you want me to comment about this debate, then here it goes:
Posted by Rumsy 5 years ago
Rumsy
Hes right, basically everything you said lacked empirical evidence. You didn't back up any of your arguments, and all of it was mere speculation. I proved you wrong many times. Still, thanks for the debate.
Posted by Yakaspat 5 years ago
Yakaspat
Well this is also just a speculation... I think that ZT might just be Rumsy's second account here on debate.org. Considering that both of them are friends with Logical-Ma and Nags, and that ZT's first activity was 2 days ago. Also, that his profile doesn't seem like it has a lot of work put into it and that ZT has done most of the commenting on this debate instead of Rumsy.

Just a speculation.. not trying to anger anyone.
Posted by ZT 5 years ago
ZT
That's not empirical evidence, it's speculation.
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