You mean when the US was still a developing (i.e., Third World) country?
Should central banks be abolished?
- Thread starter zdreg
- Start date
You mean the free and voluntary kind of people who, left to their own devices, historically caused panics? You mean those free and voluntary people?
I never meant to imply people were perfect, only that they should be able to rule themselves. I suspect you're just cracking jokes and don't actually feel otherwise, yes?
This is just a misunderstanding of how central banking works. First of all, the Fed is not a lender of last resort. Simply because it has nothing to lend. It has no savings.
If the Fed "buys" something and enlarges its balance sheet, it creates money out of thin air. You believe in free money? Look, money is never free. Someone is going to pay. And in the Fed's case, it's society paying through inflation.
The Fed creating money out of thin air has the same effect as the government raising taxes. In both cases, actual resources (goods and services) are diverted from the private sector and redistributed by the government.
You might think this type of central planning i.e. socialism has benefits. Yet it also creates massive issues. It manipulates the important price of money i.e. interest rates. It creates bubbles left and right, and enables zombie companies e.g. GME that loses hundreds of millions each year. It enables reckless lending that led to the housing bubble. Misallocation has a huge societal cost.
Let the market set interest rates and resources go to where they are best used, benefiting everyone. The Fed is the antithesis to the market.
As for the risk of governments going bankrupt, guess what, their spending has to be paid. Direct taxation is the honest and explicit way to pay for government spending. If citizens refuse to have their taxes raised for something, then that spending simply should not be done, as it was deemed not worth it.
Indirect taxation through inflation is the dishonest way to pay for government spending. Bankruptcy risk helps to properly assess interest rates. Without a central bank, this risk serves to force a government behave well, as it only enables a government to borrow when it's prepared to pay fair market interest rates.
You create arguments that you critique that I never brought up. I never spoke in support of the Fed blowing up its balance sheet. Yet here you are making up stories as you type away. You rehash stuff you copy/pasted straight out of Wikipedia. As if those who converse with you just heard of the Fed yesterday.
Not one single sentence of yours alluded to the TOPIC OF THE DAMN THREAD. This is the 4th time I remind you of that. Fact is that a lot of government spending, the vast majority, is currently lent by the Fed. That is causing inflation and that debt has to be repaid by future generations. The Fed lent us that money we spent at very low interest rates. In the absence of the Fed nobody else would have lent us that money at such low rates because we are much worse credit than the Fed makes it out to be.
You seem stupid, I am done on this topic with you. What a waste of time.
Not one single sentence of yours alluded to the TOPIC OF THE DAMN THREAD. This is the 4th time I remind you of that. Fact is that a lot of government spending, the vast majority, is currently lent by the Fed. That is causing inflation and that debt has to be repaid by future generations. The Fed lent us that money we spent at very low interest rates. In the absence of the Fed nobody else would have lent us that money at such low rates because we are much worse credit than the Fed makes it out to be.
You seem stupid, I am done on this topic with you. What a waste of time.
This is a very naive view of the world IMHO and, I don't think you know me that well to boot.
I'm quite sure most people are idiots... including you and me. But, I have no desire to control them or strip them of their natural God given right to be that way.
I suspect if you give it more thought you'll probably agree. We could always throw you in jail or send you to a work camp if you don't agree... unless you think you never had ill intentions or acted selfishly?
I was responding to your statement that without the Fed the US would go bankrupt. The Fed doesn’t print money — that’s the treasury. The Fed does create money in the form of reserves but this has little impact on inflation in the real economy. The US economy isn’t a zombie propped up by a single sector or export trade — it’s the worlds largest and richest economy for a reason. An incredibly diverse industrial set, vast resources, and a highly skilled workforce outcompetes most other countries in high margin businesses. Also, we host most of the worlds leading universities, have some of the best public school systems, and are well-liked and respected internationally.
Well you might not but I am inclined to strip those idiots off their seemingly "free" choices. Example: we might offer everyone a free choice whether to get covered by health insurance or not. Sounds great right? Less tax payer money used on that. Everyone chooses to get covered and pay premium or pay out of pocket when getting sick. Awesome right?
No, not awesome. Problem is that when those hillbillies get sick guess where they are taken by their family members? Right, straight to the ER. Are we now with good conscience letting them die in front of the ER because they were not covered by health insurance but they chose to rather spent their money on a new truck? No, they just succeeded in privatizing their gains and socializing their losses. If that does not appear fucked up and selfish to you then I don't know how else to put it. Same with everything else in life. If we let everyone choose freely, most make shitty selfish decisions that actually cost all of us in the end more than protecting stupid people from their own inability to make wise choices. Hence we put certain powers into the hands of hopefully wise decision makers whom we democratically elected to make better decisions for the entirety of a society. Of course, garbage in, garbage out: if we only have dumb people then even the decision making at the top will be unwise. And we see this with all the current and recent administrations. Hardly any beaurocrat and public servant exists in the past 5 decades whi truly understands what PUBLIC SERVANT really means...
No, not awesome. Problem is that when those hillbillies get sick guess where they are taken by their family members? Right, straight to the ER. Are we now with good conscience letting them die in front of the ER because they were not covered by health insurance but they chose to rather spent their money on a new truck? No, they just succeeded in privatizing their gains and socializing their losses. If that does not appear fucked up and selfish to you then I don't know how else to put it. Same with everything else in life. If we let everyone choose freely, most make shitty selfish decisions that actually cost all of us in the end more than protecting stupid people from their own inability to make wise choices. Hence we put certain powers into the hands of hopefully wise decision makers whom we democratically elected to make better decisions for the entirety of a society. Of course, garbage in, garbage out: if we only have dumb people then even the decision making at the top will be unwise. And we see this with all the current and recent administrations. Hardly any beaurocrat and public servant exists in the past 5 decades whi truly understands what PUBLIC SERVANT really means...
This is a very naive view of the world IMHO and, I don't think you know me that well to boot.
I'm quite sure most people are idiots... including you and me. But, I have no desire to control them or strip them of their natural God given right to be that way.
I suspect if you give it more thought you'll probably agree. We could always throw you in jail or send you to a work camp if you don't agree... unless you think you never had ill intentions or acted selfishly?
Treasury does not print money, it borrows and repays debt. Goodness. Please just stop. What you are saying is purely idiotic. You are living in a fantasy world. I attended Carnegie Mellon university, it does not mean that this school constitutes the American average. Are you seriously believing the bullshit you are sharing here?