Monday, June 27, 2016

The Fed Reserve

There is a new meme on Facebook, that caught my attention:


It was posted by the Libertarian Party.  My answer to the first part:

Not Federal - it is not a branch of the government, as we normally think of it. It was created by an act of Congress. Its members serve 14-year terms, while the Chair serves 4 (but can be re-appointed).

So, why do I not consider it Federal?
(1) It is funded independent of the budget, collecting its fees from various non-governmental sources. That's one of the objections I also have to the CFPB - the Consumer Financial Protection Bureau. Their funding takes them outside of the normal channels, and makes it hard for the people of the USA to keep them from making regulations that cannot be challenged.

(2) Its original reasons for existing were: maximize employment, stabilizing prices, and moderating long-term interest rates. NONE of these are proper actions, under the Constitution.

Government doesn't make employment happen - private businesses do.

Stabilizing prices is a bad idea - it is contrary to letting the market function most effectively.

Moderating long-term interest is NOT a good idea. It makes a market-driven factor totally controlled by a central authority - and, one that is HEAVILY influenced by political pressures.

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