December 19, 2012
Source: Best Accounting Schools
Uncovering The Fed: The Federal Reserve and its Critics
In the early 20th century, a financial crisis led panicked citizens to withdraw all their money at once, damaging banks. By 1913, Congress responded with the Federal Reserve Act, creating 12 regional banks acting as a federal bank to deal in local and global affairs with both private banks and the federal government.
Is the Fed still doing its job today? What secrets are being kept from us and how are the Fed’s ations impacting our economy?
Some say the Fed was meant to create a balanced economy, while others argue its purpose was to inorganically manipulate free enterprise, rescusing banks that we’d be better off without.
Complaints Against The Fed
– Overly secretive
– Should be fully audited
– Encourages bad, risky investments by softening the blow of bad decisions
– Causes economic bubbles
– Makes the pain of recessions worse by covering up and exasperating problems that the market would correct on its own
– Caters to banks and financial insiders
– Systematically allows the value of money to decrease as a result of inflation
– For 100 years before the Fed, money retained or gained value over time
– Discourages people from saving for the future
– Doesn’t hold government spending in check