Is The Federal Reserve Doing A Good Job?
We are told that the Federal Reserve is "above politics" and that it is absolutely vital that the Fed remain "independent". The reality is that the Federal Reserve has more control over the performance of the U.S. economy than the president even does, and yet most Americans never spend much time thinking about the Fed at all.
It is almost as if someone has instructed us to "ignore the man behind the curtain," and most of us just blindly obey. With the economy in such a mess and with the national debt exploding so dramatically, isn't it about time that we had a national conversation about the performance of the Federal Reserve? Isn't it about time that we evaluated whether the Federal Reserve is doing a good job or not?..
So has the Federal Reserve done a good job?
Well, one of the things that the Federal Reserve is charged with doing is to protect the value of our currency. In other words, they are supposed to keep inflation under control. In that regard, the Federal Reserve has failed miserably. The U.S. dollar has lost 96.2 percent of its value since 1900, and almost 100 percent of that decline has come during the Federal Reserve era. The other half of the Federal Reserve's "dual mandate" is to keep unemployment low. It doesn't take a genius to figure out that the Fed has failed there too. In the United States today, there are less jobs than there were a decade ago even though we have added more than 30 million more people to the population since then.
So, no, the Federal Reserve is not doing a good job of keeping us all employed.
We are also told that the era before the Federal Reserve was created was a time when great "financial panics" happened on a regular basis and that the Federal Reserve was created to stop them from happening.
So has the Federal Reserve been effective at preventing financial panics?
Well, current Federal Reserve Chairman Ben Bernanke
has openly admitted
that the Federal Reserve helped cause the Great Depression of the 1930s. And there have been 10 separate economic recessions since 1950. So that is not a really great track record.
In addition, it seems very clear that the foolish low interest rate policies of the Fed fueled the massive housing bubble that plunged the U.S. economy into the greatest economic downturn since the Great Depression when it finally crashed.
Shouldn't the Federal Reserve receive some criticism for that?
Of course one of the biggest problems with the Federal Reserve is that it is a perpetual debt machine.
If you do not know where our money comes from in the United States, please see
. The Federal Reserve system was designed to perpetually expand the money supply and to perpetually expand U.S. government debt. On both counts, it has performed brilliantly.
When the Federal Reserve was created, the U.S. national debt was less than 3 billion dollars. Today, it is more than
What is the appropriate word to use when something is 5000 times worse than it used to be?
When you simply look at performance, the truth is that it is really hard to deny that the Federal Reserve has been a complete and total nightmare for the United States.
But instead of shutting it down, Congress has been giving the Federal Reserve even more power. The Dodd-Frank bill gave the Fed significant new powers and substantial new responsibilities, and the Fed has been exercising those new powers in almost complete secrecy - Source Michael Snyder Contributing Writer
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