Why is the Federal Reserve bad?

Question

I am having a debate with a friend and I am having trouble convincing him that the Federal reserve is a bad thing. Any, ideas on how to convince him would be helpful.

If you think the Federal Reserve is a good thing please do not waste my time.

@ Laissez-Faire Guy

Thanks for brilliant response that so clearly defined your counter argument that I could not possibly continue to have my own opinion when you so eloquently showed me the error of my ways.

And no I am not a liberal nor am I a conservative, a democrat, a republican, or a independent.

Last, I would ask you 3 questions.

1. Does the Constitution not say in article 1 section 8 that it is congress' responsibility to coin and regulate money?

2. Did the Supreme Court not rule i 1935 that Congress can not delegate its constitutional responsibilities?

3. If the answer to the first two questions is yes , does that not mean the Federal Reserve is unconstitutional?

Answer 1

The Fed is a bad thing because it causes inflation through t's debt based, fiat monetary system. With fiat money, it's value comes through confidence in it, legal tender laws and taxes, basically. It has no intrinsic value, unlike gold, silver, platinum, palladium, copper, land, or any other commodity, since it's supply is virtually unlimited. Only running out of paper will stop it from being made(but that is only physically, not the computer entries which "make" most money today. The more there is of something, the less value it has. This is where inflation comes from. It also encourages banks to make loans to people that they have a better than average shot of not paying, since it allows fractional reserve banking. Fractional Reserve banking allows a bank to "create" money from your loan signature by allowing a bank to lend money it doesn't have. It can lend roughly 7 or 8 dollars out for every dollar it has in it. Also, when the bank "creates" the loan, it only ever creates the principal, never the interest, making it impossible for everyone to ever pay their loans to banks.

Basically, by allowing the Federal Reserve to run the monetary system of America, it turned our entire money system into a giant debt which can never be paid off.

Answer 2

Okay basically I had to take many politic classes and american history classes to figure it out: Basically Before FDR when we had a reccesion, the economy would get bailed about by private banks, J.P. Morgan which you may still here of his company today talked to all the banks and they alled bailed out the economy in the late 1800s when William Taft has asked him too, of course J.P.Morgan and the banks got an extra share as well. Under FDR he hoped to change that process and basically created the federal reserve which acted as the J.P. Morgan and was supposed to get together with all of the big banks and establish how much loans to give to how many people, where they should be investing etc. and it worked However thru de-regulation which should be noted was the worst under Ronald Regean and George W. Bush, the banks kind of did what they wanted and the Wall Street Crash of 08' happened. Although I vote democratic usually I also blame Chris Dodd and Barney Frank (both senators) who were ont he comitee to oversee such things did not happen. It turns out Chris Dodd was getting deals on housing to turn a blind eye Now many conservatives believe it is the head of the federal reserve Ben Bernenke's fault and that he should be fired. This is a half truth because as we know the banks were deregulated under both houses of congress and the two presidents. What Ben Bernenke could have done though publically anounce the scandelous things going on but because he cared more about his jon thent he American people, we are in this mess.

Answer 3

Well, okay.

The Fed's response to everything lately has been to cut interest rates. This weakens the dollar, and drives up oil prices, which in turn hurts consumer spending and confidence. (Which is the largest source of economic growth)

Answer 4

The Federal Reserve Is Evil

Answer 5

Open mouth, closed mind.

Are you a liberal my friend?

UPDATE: The Constitution and Supreme Court do not always mesh well. The 9th and 10th Amendments are pretty clear that whatever the gov't is not specifically authorized to do, it is prohibited to do. So tell me where in the Constitution programs like Social Security, Medicare, or the Dept of Education can possibly be authorized?? Yet the Supreme Court has ruled SS is constitutional.

I would disagree with the SC. If it's Congress's power, it's theirs to delegate.

But all this is irrelevant to your original question. You asked if the Federal Reserve is a "bad thing." I submit it is not, and in fact I trust them a hell of a lot more than I trust Congress with monetary policy.

Answer 6

well firstly it is private. run by a select group of businessmen whom we cant even know the names of. you cant allow the money of a nation to be controlled by a private business.