Federal+Reserve+2

Dropping the Fed • Federal Reserve created in. 1913  • The Fed is a private bank • The Board of Governors does not receive money from congress • BOG Members are appointed by the president • Board must annually report go congress • President can remove a BOG member • the primary responsibility of the Board members is the formulation of monetary policy • The Federal Open Market committee comprises seven members of the BOG and five representatives from the Federals Reserve Banks Economists from the Austrian and Chicao school of Economics want the Fed Abolished • Milton Friedman says that the Fed contributed to the Great Depression by contracting the money supply when the Markets needed liquidity since the purpose of the Fed was to prevent events like the Great Depression, it obviously failed in its most important mission • Meetings of the Fed are held in secret and Xcripts are released five years after the fact • According to the campaign website of Cong. Ron Paul "In addition, the Federal Reserve, our central bank, fosters runaway debt by increasing the money supply — making each dollar hi your pocket worth less. The Fed is a private bank run by unelected officials who are not required to be open or accountable to "we the people."" On September 10, 2002, Ron Paul introduced legislation to abolish the federal reserve, • he claims that it has benefited the wealthy at the expense of the working classification • "The Fed has followed a consistant policy of flooding the economy with easy money, leading to a misallocation of resources and and artificial "boom" followed by a recession or depression then the Fed-created bubble bursts." • The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. • Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare- warfare state. • Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. • driving interest rates down to absurdly low levels, Our money is no longer backed by Gold • To be sure, monetary inflexibility is the friend of free markets. Without the ability to create money out of nothing, governments tend to run tight financial ships. Banks are more careful about the lending when they can't rely on a lender of last resort with access to a money-creation machine like the Fed. "Gold stands as a protector of property rights" Alan Greenspan • Interest rates would reflect the real supply and demand for credit