Federal Reserve System Research Paper

On December 23, 1913, a congressional act was passed and signed into a law, under the presidency of Woodrow Wilson that established the Federal Reserve Bank and made the Federal Reserve System a crucial aspect of the United States' government. The Federal Reserve System is contemplated to be an independent central bank; however, is sometimes referred to as "independent within the government” and is considered to be the central bank of United States. Ever since 1913, the United States of America has relied on its Federal Reserve System to control the country’s currency and interest rates. The existence of such an institution has caused the United States of America to possess one of the world’s finest economies. Therefore the United States' economic
The establishment of the Federal Reserve System demolished the financial crisis that sunk the economy of United States of America in 1907. As described by the Federal Reserve Bank of St. Louis, Central to America’s Economy, “A particularly severe panic in 1907 resulted in bank runs that wreaked havoc on the fragile banking system and ultimately led Congress in 1913 to write the Federal Reserve Act.” The System that, at first was established to stabilize the panic crisis; now holds a larger responsibility of stabilizing the employment rate. The employment rate is influence by the Federal Reserve System as evident by the Board of Governors of the Federal Reserve System, “...monetary policy influences inflation and the economy-wide demand for goods and services—and, therefore, the demand for the employees who produce those goods and services--...” This illustrates how the Federal Reserve System influences employment rate. As a policy under the Federal Reserve System inflates the demand of goods and services, the employers producing the goods and services seek for more employees. Hence, the inflation of the demand of goods and services directly relates to the inflation of the employees, which stabilizes as well as maximizes the employment rate in United
Many believe that the Federal Reserve System is gaining an excessive amount of power, which can be insidious for the individuals who inhabit in America. The people of America fear the abuse of the power the Federal Reserve System holds. However, if the power of the Federal Reserve System were never expanded, United States would have been in a crisis economically and financially. Due to the Federal Reserve System’s power, the interest rates have been positively impacting the American lives. This is verified by the Time, “The money you have stashed in savings and money markets accounts will earn higher interest.” This demonstrates that the interest rates are not only helping the government, but as well as the people too. Living in the United States requires an essence to obtain savings and due to the work the Federal Reserve System does, the people are receiving interests, or in other terms “free-money”. Therefore, keeping this system would serve as the best alternative for both the government and the people who inhabit in the United States of