You guys have only had a Federal Reserve since 1913.
Before that you had individual banks exposing themselves and collapsing - since then, the Fed has worked to broaden the risk so that when one goes, everybody goes.
I'm not sure that's a better system, personally.
It appears to be the antithesis of making the component parts of your financial system small enough that the failure of any individual one can be tolerated. Since 1913, the US seems to have been diligently working towards a system where the taxpayer - being the only entity in this entire diagram that's allowed to be landed with the bill - is regularly shafted as ever-more parts of the system become "too big to fail"
Humanity has gone eight thousand years without that 'power', and we made it here just fine. I'm not sure the last 100 was anything particularly special that we'd want to replicate.
Doesn't account for when you have to adjust rates to handle different economic cycles.
Who has to adjust which rates?
If we're talking interest rates, that would be something each bank would have to assess for themselves, taking into account that bank's circumstances. Not sure what other rates you'd be talking about...
Dunno. Was playing devil's advocate because I mentioned abolishing the fed to a friend and I don't think I made a good argument, so I wanted to see what this forum would say in response to some of the things he said.
Unfortunately, the Fed probably won't be abolished anyway since no one in Congress views this as an issue.
You guys have only had a Federal Reserve since 1913.
Before that you had individual banks exposing themselves and collapsing - since then, the Fed has worked to broaden the risk so that when one goes, everybody goes.
I'm not sure that's a better system, personally.
It appears to be the antithesis of making the component parts of your financial system small enough that the failure of any individual one can be tolerated. Since 1913, the US seems to have been diligently working towards a system where the taxpayer - being the only entity in this entire diagram that's allowed to be landed with the bill - is regularly shafted as ever-more parts of the system become "too big to fail"
Okay so we go to back to a system of private banks. Doesn't account for when you have to adjust rates to handle different economic cycles.
Humanity has gone eight thousand years without that 'power', and we made it here just fine. I'm not sure the last 100 was anything particularly special that we'd want to replicate.
Who has to adjust which rates?
If we're talking interest rates, that would be something each bank would have to assess for themselves, taking into account that bank's circumstances. Not sure what other rates you'd be talking about...
Dunno. Was playing devil's advocate because I mentioned abolishing the fed to a friend and I don't think I made a good argument, so I wanted to see what this forum would say in response to some of the things he said.
Unfortunately, the Fed probably won't be abolished anyway since no one in Congress views this as an issue.
the real argument is 10th amendment because congress was not grated the power to delegate its authority to mint and value currency to a 3rd party