See? Updating more often, like I said I would. Actually, this is something I had intended on writing for a while but had been putting off due to work stuff, and just general disinterest and writer’s block. It’s a political/econ piece, so I apologize in advanced. If you have any questions or concerns about any of the opinions I have stated below, do not hesitate to contact me in however way you do.
Originally, I had intended on posting this (more apologies because I’m a moron like that):
“Gah.
It’s been so long since I’ve written that I think I’ve felt my brain literally melt into goodness knows what. So, I apologize for the poor writing beforehand. I really haven’t written much for a very long time, and that (combined with me not reading as much as I should) is really rotting whatever skills I had in good ranting and blogging.”
Currently Reading: Playboy (I read it for the articles)
Currently Playing: Final Fantasy Tactics Advanced 2
Currently Consuming: Nothing
Currently Working On: Nothing (but I’m going to start on my Saber Lily cosplay soon)
Currently Wearing: My awesome red yukata (which I look super duper sexy in. I think)
Awesome Incident of the Day: Bonnie’s Companion Cake making friends with my Companion Coconut
No matter where I go, I seem to be getting constant news about various people in politics. This is not a bad thing (especially since I should be getting them… through the rss feeds on my blackberry), but I’ve been getting more and more annoyed at the growing number of people not understanding what the Federal Reserve is… again.
Recently, there has been talk of Congress wanting to audit the Federal Reserve. Some advocates include Ron Paul and other democratic senators who are insistent upon pushing the fact that the Federal Reserve is a great big monster that eats our cash.
No. First off, the Federal Reserve does not make money on a whim. They increase or decrease the amount of money going into the economy to try and balance economic stability (which is now most commonly calculated by the ratio of unemployment to the ratio of inflation). Yes, they are powerful (they are the only people to control the inflation rate and such), but they are neither moronic nor out to “ruin the US economy.” In fact, every single person who works on one of several boards would only benefit if the economy is doing well. People act like this is some war between the banks and the people when, in fact, everyone is suffering in this situation.
So, back to that auditing idea. There has been a keen interest, mostly from the democratic side, to start regulating the Fed, thereby limiting the Federal Reserve’s power and forcing the Federal Reserve to fix the economy. To make a long story as short as it can be, “No, this does not work.” First of all, someone would have to take on the power if the Fed doesn’t (and we’re talking control of the money flow) and, chances are, Congress would do it (I suppose the Fed isn’t the only one with hidden agendas). This is Congress who is more than willing to spend trillions of dollar on an unsuccessful stimulus package. Most people in Congress barely know what a discount rate / reserve rate is, let alone understand the importance and complication of using their rates to, essentially, keep the country’s economy in check. The reason we even made the Federal Reserve was because no one wanted to trust a bunch of morons on Capitol Hill to control the US economy (some of whom have never passed an econ class themselves).
Beyond the fact that the US economy will be in the hands of people who don’t know about economics is the issue that these hands are already politically inclined. I don’t want senators pushing gun control bills under their to-be Federal Reserve actions. The point of creating the Federal Reserve was to keep it away from Congress/the President. That’s why there’s two ways to control economics: Fiscal and Monetary (Fiscal: Government run, like taxes and stimulus packages // Monetary: Federal Reserve and interest rates). To put all that economic power into ONE concentrated hand bothers me (and it’s not even the very good hand).
Besides, who would you have to regulate the Fed? Again, I am sure Congress would love to audit the Federal Reserve themselves. I’ve already discussed the general intelligence (or lack there of) when it comes to economics and Congress, but let’s not forget the main fact that the Federal Reserve is also the bank for Congress (meaning that for most government projects, Congress borrows money from the Fed). This would give Congress economic control to do what they want with how much money they can make. This may sound nice, but I worry about Congress over-generating money and shooting inflation sky high in an attempt to clean the US debt. In that attempt, the government will generate too much money, bringing the US Economy into a similar state as the German Super Inflation.
Okay, maybe that was an exaggeration. But in all seriousness, Congress knows little about how to increase or decrease the money flow, and I really would not like to see us hand Congress more power.
And as I’ve essentially stated before, Congress is just as power hungry as the Federal Reserve (perhaps more, and certainly more detrimental). When the Fed spends loads of money to cover their own banks, it eventually trickles down to help us anyway (Business cycle, people). Yes, the Federal Reserve has screwed up on several occasions (my first thought goes to Greenspan, who was the Fed chair during the dot com boom/bust, as well as others because of his inability to make decisions), but it’s far better than when the government touches economics (I’m thinking Great Depression times).
I agree with the idea that the Fed should be more “regulated” in some way. For example, the Fed chair is only required to make two reports to Congress. At the very least it should be 4 (every quarter) or 8 (Twice in a quarter). Also, the Fed shouldn’t be put out as this mysterious all knowing corporation. It’s not even a corporation, and the Fed building sticks out like a sore thumb (at least in NY, which is where it matters, in my head. That and that’s where all the gold lies). This is more the fault of the media and the public going “if I didn’t know about it before, it must be mysterious and inherently dangerous.” I suppose the idea came up with good intentions, but (once again) the nut houses on Capitol Hill had to bring it up a notch. I think we have more thinks to worry about (like saving the economy).
Yeah, “ruin the US economy.” is a main problem , What we can do?
ummm have you been living under a rock or something? The US economy, not to mention the world economy has been ruined by the Federal Reserve… Do you know how much in debt this country is at the moment? Watch this video and be enlightened. Oh you should also read this article http://moneynews.newsmax.com/financenews/feds_lost_nine_trillion/2009/05/12/213463.html.
Federal Reserve FRAUD: http://www.youtube.com/watch?v=hEZfMruLMSI
It is the most effective way of control and an evolved form of slavery my friend. Open your eyes before it is to late.
Congress will give the powers back to it’s rightful owner, the US TREASURY!
I have no idea what you just said since I’m at work skimming through it, but it’s good to know that a fool who prefers to do backflips when i can like me can ask some random ass economist such as yourself what the hell is going on. In detail. Double stuffed.
Nick, try finding the code in a law book for the Federal Income Tax. You will not find one because there isn’t one. The Federal Income Tax takes 35 % of your wages per year! Thats approximately 4 months of hard work going to the foreign entity that is the Federal Reserve. What do you think happens to that money they collect? NOT ONE CENT OF THIS COLLECTION GOES TO ANY GOVERNMENTAL PROGRAM WHATSOEVER! It goes to pay the interest on the currency being produced by the fraudulent federal reserve bank. The money you make working 4 months out of the year goes literally into the pockets of the international bankers who own the PRIVATE Federal Reserve bank. There is no law in existence that requires you to file a tax return at ALL! It is the evolved form of slavery. Nothing more, nothing less.
FDR 2012
That is all.
Glenn, I hope you are fully aware that it takes me at least 2 days of research before I post, especially when it comes to political science or economics. This is because I like to stay informed, or perhaps reading 3-4 different newspapers daily (this does not include US News & World Reports, Newsday or The Economist) is not enough to prove that I’m not living under a rock?
Many of the links you have posted are the REASON why I put this blog post up. To explain some things that the media has put a clear spin on. Anyone who has taken ONE CLASS of Macroeconomics can easily understand what I’m talking about.
Of the article you posted above, I hope you are fully aware that the Inspector General is not a part of the Federal Reserve, and is not required to ask the Federal Reserve about their budgeting. It’s like asking how much your friend spent for the week of May 21st without asking for information (a slight exaggeration, but you get my point).
Furthermore, you’re mixing up bother fiscal and monetary policy by claiming that the Federal Income Tax is a tool of the IRS and is therefore a tool of the US Treasury and not the Federal Reserve. And, the debt that has been incurred by the United States comes from overspending of the Federal Government, not the Federal Reserve. You can thank the United States for the increased amount of debt we have to pay. Not to ourselves, but to other countries, unbalancing our system of floating debt. And, in the end, you only have Congress to blame for borrowing so much money from the Federal Reserve and other external countries. Of course none of the money goes to government projects. If you look at the budget that Congress gives itself, they do a very good job at making a small budget, and do a better job at spending far more than they’re supposed to on unnecessary things.
Yes, I agree that the Federal Reserve is not as up to par as they should be, and should be checked at a little more (for example, two economics meetings per quarter… which most congressmen fall asleep on anyway), but taking crucial power away from the Federal Reserve will essentially throw our economy out the window. Legislation takes so long in the United States, that any plans for economic reform can only be seen 3-4 months after the implemented program.
Poor media coverage and lack of information gathering has led to this type of mindset that the Federal Reserve is this evil bank out to get the world. They may have ulterior motives, but what part of the United States doesn’t (I mean, take a look at Sarah Palin resigning to supposedly run in 2012).
And, the US Congress can do far more for the economy than thrust stimulus packages at our faces. For example, France has taken efforts to improve their economic situation by creating jobs to renovate national landmarks, just for the sake of creating jobs. This is a mirror of exactly what we did back at home during the Great Depression (I’m sure superglucose can tell you all about it, since he’s already mentioned FDR). There are many, MANY tools that the US Congress can do to help improve our situation, rather than putting the blame on the Fed. In the end, the point is that we are NOT supposed to blame anyone. There are MORE important matters at hand, matters such as OUR ECONOMIC RECESSION. Now is not the time to be blaming people (because, really everyone is to blame for a piece of the economic downfall).
Please, wake up. I am not a moron, I do not live under a rock.
If I remember correctly the FED is taking that 35% and putting it on fire! (its to “control” the amount of money in circulation)
[...] And, yes, I am fully aware that I have talked about this before. If you want a real quick explanation, you can go back and read my previous blog posts about the Federal Reserve: 1)The Real Quick (and, now that I look back, poorly written) Blurb 2)A Post About Possibly Shifting More Power to Congress and Away from The Federal Reserve [...]