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Ward Williams

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Is the Federal Reserve a false necessity, created to redistribute wealth from bottom to top?

The United States no longer uses the gold standard as backing for it's monetary system. Instead our money is created by fiat, that is, the Federal Reserve simply says it exists. The Federal Reserve, which is not a government entity loans us the money and we pay it back with interest. As a middle man isn't it in the Federal Reserve's interest to loan us as much money as it can? Given the obvious incestuous relationships between money and power in Washington, is it equally beneficial for Washington to concoct reasons for the government to need money?

I don't really have a problem with fiat money since anything will assume whatever value we place on it, but why are we paying a middle man to fabricate it from thin air? Why are we borrowing money from someone else when we could borrow the money from ourselves, much as borrowing from a 401k. We borrow from ourselves and pay ourselves back, with the same interest. That interest would then become income, rather than expense. Given that fiat money is imaginary, isn't then the debt imaginary too?

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    Feb 19 2013: my advice: follow the money. when the government decides to "spin up" the economy with some extra money, the theory talks about the total (aggregate) demand. but we might want to have a look where exactly the new money enters the economy, and who is benefited. it is a very worthy topic to explore and dwell on.
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      Feb 19 2013: The reading I've done on the subject lead me to believe there are ulterior motives behind the current central banking system. My interests lie not so much in proving a conspiracy exists, but in removing the device that allows that suspicion. Suspicion can only result when information is unknown. It can be unknown because of a general lack of knowledge, ie poor research, or when information is withheld, as in secrecy. Right now the general population is victimized by its own unwillingness to research important matters, and is further compounded when that research is confronted with the roadblock of secrecy. That secrecy can manifest itself in many ways, and is sometimes not recognized as secrecy.

      Secrecy is easily identified when we are told we simply can not have the requested information. Not so easily recognized when the information is skewed, spun, or represented with an outright lie. It gets even more confusing when skewed or misleading information is challenged by an opposing yet equally skewed answer.

      This what I think is happening right now within our political system as a whole, and because of our general unwillingness to do due diligence, or hold our employees truly accountable by requiring their transparency we will suffer under a blanket of secrecy. Fortunately there are things we can do that require no legislation or even the permission of those who would for their own benefit keep it the same.
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        Feb 19 2013: that is certainly true, but i would claim that what we know is enough to be upset
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          Feb 19 2013: What you and I know is plenty enough. Sadly most don't know, and have no real reason to care. The flip side to my own argument is that things must not be as bad as I say. If it were, more people would take an interest. In the US at least most people are not cold or hungry, two very motivational situations. The poor have a reasonably good safety net. The middle class are busy being middle class, and the rich, well, some of the rich are driving this; it's working perfectly for them. Not much impetus for change.

          I try really hard to look at as many aspects of an argument as I can. Either I don't have that strong an argument, or it is simply being consumed by the shrapnel from the other side.

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