Question about dissolving the Fed

[rbixby]

I saw something on the OWS website about a billion dollar buyout of the Federal Reserve. It seems to me like it would be a good idea to just buy it back and have a federal central bank. I'm just wondering, what would the repercussions of something like this be? It seems like a great idea, and an easy way out of having no oversight of what happens to our currency and who it gets lent do. Does anyone have anything to weigh in on this?

[yella_dawg]

1. That pesky constitution.

The Constitution of the United States states that only the government may operate a central bank. But we ignore that, deeming that "coining money" refers only to a mechanical process of stamping coins. Obviously the framers saw this coming and put in safeguards. Safeguards we ignore at our peril, again, obviously.

[RUMMYisFROSTED]

2. You don't have to buy shit.

You just legislate it away.

If that's your goal.

[rbixby]

4. I think when the fed was formed it was under a long term contract

With the option to buy it back for one billion dollars. I'll have to look into it a little more. Seems like something that could probably be done by executive order even.

[RUMMYisFROSTED]

5. I call Horseshit.

[rbixby]

7. You're right

as far as Wikipedia says, that's not how it works.

[RUMMYisFROSTED]

9. Nothing to do with wp.

[glowing]

3. It doesn't make sense for our Govt to borrow money from a private centralized bank.

The People should own our nation's wealth. It was a great scam that went down on a holiday when no one was paying attention.

[FarCenter]

6. The Federal Reserve is a federal central bank.

The seven members of the Board of Governors of the Federal Reserve System are nominated by the President and confirmed by the Senate. A full term is fourteen years. One term begins every two years, on February 1 of even-numbered years. A member who serves a full term may not be reappointed. A member who completes an unexpired portion of a term may be reappointed. All terms end on their statutory date regardless of the date on which the member is sworn into office.

The Chairman and the Vice Chairman of the Board are named by the President from among the members and are confirmed by the Senate. They serve a term of four years. A member's term on the Board is not affected by his or her status as Chairman or Vice Chairman.

http://www.federalreserve.gov/aboutthefed/bios/board/default.htm

---

The staggered appointments and 14-year terms are intended to insulate them from the current whims of politics, but less so than, for example, the Supreme Court justices, who are appointed for life.

People who call for the abolition of the Federal Reserve are generally opposed entirely to having a federal central bank, sort of like the days of Andrew Jackson.

[rbixby]

8. Here's another good link too

http://en.wikipedia.org/wiki/Federal_Reserve_Act

[librechik]

12. why can't we audit them then?

They act like a private bank and transparnecy is next to nil.

[On the Road]

10. As Far as Having No Control Over the Currency,

the alternatives are:

1) to have it left up to the private sector. That would likely make things less economically stable and result in the kind of panics and bank crashes common during the 19th and early 20th century.

2) to make it part of the federal government. This leaves the Fed more open using monetary policy for political ends. Administrations are driven by politics, and managing interest rates and the money supply politically is a very bad idea.

As former chair William McChesney Martin famously said: "I’m the fellow who takes away the punch bowl just when the party is getting good.” The kind of mistakes made under Greenspan were because abandoned this philosophy.

It is not possible to entirely shield the Fed from politics -- for example, Arthur Burns reportedly increased the money supply to get Nixon reelected and to help himself get renominated. But the current structure, neither entirely public or private, shields it from the worst excesses of both.

Do you really want a Republican administration controlling the money supply or interest rates? I shudder to think of the long-term consequences.

[rbixby]

11. Very true

Thanks for the insight