Why the Fed Should Be Eliminated

Only available on StudyMode
  • Download(s) : 78
  • Published : December 6, 2012
Open Document
Text Preview
Why the Federal Reserve System should be Eliminated
There are many reasons why the Federal Reserve System should be eliminated because it manipulates the United States economy. The Federal Reserve creates boom-and-bust cycles; these are a type of cycle experienced by an economy characterized by alternating periods of economic growth and contraction. When the United State’s economy goes through these alternating periods the Federal Reserve inflates the money supply by telling the Treasury to print x amount of currency. This is a major problem because when the new currency is circulated the value of the United States dollar decreases. The Federal Reserve also tells the Treasury to print more currency when the government needs to borrow it, the problem with this is that when the government borrows money it does not properly enforce taxes to pay off the loan. This triggers debt in the government that leads to more and more borrowing of money from the Federal Reserve. Where exactly does all this debt go? It is bought by foreign countries like China and Japan and is placed on future generations of Americans to pay down the line. The Federal Reserve is reckless with its decisions to print more money at the expense of the American tax payer. We have seen this with the massive corporate bailouts by the government.

The Federal Reserve also manipulates the American economy by setting national interest rates by keeping rates high or low, the Federal Reserve has the power to create economic growth or to destroy it and have the power to inflate massive bubbles and then to pop them. When the Federal Reserve changes interest rates it is either harder or easier to get a loan, this is a problem because when the interest rates are high usually people who need and can pay back a loan are denied and when interest rates are low usually people who can’t afford to pay back a loan are approved. A prime example of this is the housing bubble burst.

The Federal Reserve is careless and...
tracking img