End the Fed!

[Orangecat]

We do print. Why would we print instead of borrowing?

Why would we borrow currency we can print?

 

[gipper]

I think the Fed basically exists to make sure inflation doesn't get too far out of control and recessions/depressions are not too severe or last too long. They do this by raising interest rates to curb inflation and then lowering them to curtail economic slowdowns before a recession hits. But that requires timely action to be effective, something the Fed has not been too good at. But do we throw out the institution because the people running it screwed up? What is the alternative? How would we have any control at all over our money supply?

And yet, we have lots of inflation and have incurred many recessions and depressions.

 

[Toddsterpatriot]

I think the Fed basically exists to make sure inflation doesn't get too far out of control and recessions/depressions are not too severe or last too long. They do this by raising interest rates to curb inflation and then lowering them to curtail economic slowdowns before a recession hits. But that requires timely action to be effective, something the Fed has not been too good at. But do we throw out the institution because the people running it screwed up? What is the alternative? How would we have any control at all over our money supply?

The fed was created before inflation was really a thing.
They were needed because panics and depressions were caused and extended
by liquidity issues. No one wants to lend during a panic, so cash was hoarded
making it harder to come out of the panic.

 

[gipper]

Why would we borrow currency we can print?

It’s claimed we borrow because this doesn’t cause as much inflation if we had printed currency instead.

 

[Toddsterpatriot]

Why would we borrow currency we can print?

In 2022, the federal government had about $4.9 trillion in revenue, spent about $6.3 trillion
and borrowed about $1.4 trillion.

How much should they have printed to spend?

 

[task0778]

The fed was created before inflation was really a thing.
They were needed because panics and depressions were caused and extended
by liquidity issues. No one wants to lend during a panic, so cash was hoarded
making it harder to come out of the panic.

This is true, but in today's world with so much fiat money and out of control gov't spending, do we not need something to kinda mitigate the damage being done? IMHO, the Fed was late in raising interest rates to curb inflation but inflation eventually came down. But what if there was no Fed? Would inflation have risen a lot higher? Or the COVID economic slowdown that many said was indeed a recession would've been worse and lasted longer? Absent the Fed, what other controls exist?

 

[sparky]

Why would we borrow currency we can print?

because fractional reserve banking is a debt based system in a fiat system w/out a reserve

~S~

 

[Orangecat]

It’s claimed we borrow because this doesn’t cause as much inflation if we had printed currency instead.

Has anyone proven that theory? We now have both inflation and are paying vast amounts of interest for borrowing our own currency. Smells fishy to me.

 

[Orangecat]

In 2022, the federal government had about $4.9 trillion in revenue, spent about $6.3 trillion
and borrowed about $1.4 trillion.
How much should they have printed to spend?

They should be required to spend within revenue levels. We should also go back to the gold standard so the currency we do print is actually backed by something tangible.

 

[Orangecat]

because fractional reserve banking is a debt based system in a fiat system w/out a reserve

~S~

The largest debt in human history says this is a bad idea.

 

[Toddsterpatriot]

This is true, but in today's world with so much fiat money and out of control gov't spending, do we not need something to kinda mitigate the damage being done? IMHO, the Fed was late in raising interest rates to curb inflation but inflation eventually came down. But what if there was no Fed? Would inflation have risen a lot higher? Or the COVID economic slowdown that many said was indeed a recession would've been worse and lasted longer? Absent the Fed, what other controls exist?

Yes, the Fed left rates way too low for way too long.
They kept increasing the size of the balance sheet when they should have shrunk it.
Bidenflation was the result.

But what if there was no Fed? Would inflation have risen a lot higher?

Doubtful. What would have replaced the Fed?

 

[Toddsterpatriot]

because fractional reserve banking is a debt based system in a fiat system w/out a reserve

~S~

Without a reserve? What do you mean?

 

[Toddsterpatriot]

Has anyone proven that theory? We now have both inflation and are paying vast amounts of interest for borrowing our own currency. Smells fishy to me.

Name some countries that printed instead of borrowing.
What are their inflation and interest rates?

 

[Toddsterpatriot]

They should be required to spend within revenue levels. We should also go back to the gold standard so the currency we do print is actually backed by something tangible.

They should be required to spend within revenue levels.

I won't argue with that. So, you're not saying we should print instead of tax?

We should also go back to the gold standard so the currency we do print is actually backed by something tangible.

And when China converts their dollars to gold, we have to shrink our money supply.
Wouldn't deflation be an issue?

 

[Toddsterpatriot]

The largest debt in human history says this is a bad idea.

We had fractional reserve banking under a gold /silver standard.

 

[task0778]

Doubtful. What would have replaced the Fed?

Good question. I do not know the answer but I doubt Congress is up to the challenge and I do not trust any president to make such decisions that are in the best interests of the country instead of politics. I do not believe the Fed should have any other consideration, such as politics or unemployment. Fuck that, just manage the money supply correctly.

 

[Natural Citizen]

How long are you guys gonna let Toddster keep jerking you around in a redundant circle?

You're letting him control your arguments with redundant spin.

 

[MisterBeale]

How long are you guys gonna let Toddster keep jerking you around in a redundant circle?

Till Toro enters the thread and it officially becomes a peep show?

 

[Natural Citizen]

Till Toro enters the thread and it officially becomes a peep show?

I don't think Toro is an open market operations guy, though.

He don't know the difference betwen base currency and base money either, as has been thoroughly illustrated in days gone by, but that's beside the point. lol.

 

[dblack]

Who will be the lender of last resort?

Uncle Vinny?

Without a central bank, shitty banks would fail. As they should. Don't put your money in a shity bank!