Do you see the federal reserve as a threat to the common man? why?

Question

Do you see the federal reserve as a threat to the common man? why?

Answer 1

As a liberatarian, I see all powerful institution as potential threats. Which is why it is important to have proper checks and balances in place, enforceable by law.

The Federal Reserve has awesome power so questions regarding the checks-and-balances of that power is warranted. This has been a topic of much debate and you can see the results in the laws that govern the Fed.

At the top of the Federal Reserve is the Board of Governors. They are appointed for 14-year staggered terms by the president and confirmed by congress. This was to ensure that no single president could "stack" the board when elected.

Congress was concerned that they didn't want the Fed leadership dominated by bankers. So the law reads that there is a "a fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country". (http://www.federalreserve.gov/GeneralInf... .  Board members are forbidden by law to have any economic interest in a private bank. (Ref: Title 12 chapter 3 of the U.S. Legal Code). Major monetary decisions must be by majority vote which means even the powerful chairman cannot force  such decisions.

The Fed branches are organized to share control with member banks. This was a compromise in 1913 of those that felt government should not be involved in banking (the republicans), and those who did not trust bankers (the democrats). However, in the early days, it became obvious the private bankers had too much power in the branches, and there was no coordinated monetary policy. The Bank Act of 1935 placed all the branches under direct oversight of the Board of Governors.

The Federal Reserve is officially overseen by congress, reports to it on a regular basis, and is audited at least once a year.

So how is their track record?  Prior to 1935 when there were less checks-and-balances, there were lots of examples of power abuse at the branch level (outrageous salaries, opulent offices, etc). Since 1935, I can't cite any scandals in the Fed.

I would judge the checks-and-balances of the Federal Reserve to be "pretty good". But, as with all government institutions, it is up to the good citizens to be ever-vigilant against  potential abuses of power.

I will say that the common man has receive more benefit that harm from the Federal Reserve (post-1935). One only needs to compare it to the monetary systems before 1900 to see how.

Another interesting fact is the Fed has a small but positive effect on the national debt. By law, the Fed has to give any income after expenses to the Treasury. So that $800B in Treasury securities they own? 90%+ of the interest earned on these securities is returned to the Treasury making these T-Bills almost interest free to the government. Not a bad deal for the taxpayer.

Answer 2

The federal reserve is made up of private banks owned by rich famlies. The government of the US has to borrow from the Fed and every tax dollar paid by Americans goes to the private bankers to pay the countries debt plus a nice profit for the member banks.

Answer 3

The Fed has been a stabilizing force in the American economy since Greenspan was appointed by Carter.

Answer 4

Yes the federal reserve is a threat to the common man. They own the federal government. 30% of our tax money goes right into their pocket as interest on the national debt. Money we owe that they created out of thin air. There is no money. It's just paper with numbers on it. We are virtual slaves to the federal reserve. Unless we get rid of it and go back to the constitutional mandate that congress coin the money based on gold instead of farming it out to a private foreign owned bank that answer to no one we always will be.