I used to be puzzled by people who hated the Fed. I would hear someone ranting about the Fed and think, “Of course we could do better, but you need to do more than get rid of the Fed.” But I couldn’t muster the “I give a damn” enough to answer the tirades.

Here are some complaints I have heard about the Fed: It

  • Is quasi-private. What would change if it was officially part of the government? We could hope for a bit more transparency, but I wouldn’t want my life to depend on that. If it was fully private, and we could use any competing currency, that obviously would make a difference. It also obviously won’t happen.
  • Profits. These get sent to the U.S. Treasury. They don’t make much difference. I suppose all the bureaucrats are enjoying their subsidies, but how is this different from other government bureaucracies?
  • Finances war. And if the Fed did not exist, the central government would be unable to print money or sell bonds? Harrumph!
  • Puts the kids in debt. (See previous bullet.) When was the last time the USG was not in debt? Oh yeah, never!
  • Pushes the economy to the verge of collapse. USG had no trouble doing this before the Fed existed. USG can do it again, if we end the Fed.
  • Manipulates interest rates and the money supply, indirectly causing price inflation that steals our savings. This almost matters. USG can do this without the Fed, but it might be more obvious or irksome to them without the Fed. The disappearance of the Fed might make a tiny difference here.

Did I leave any out?

So, what would happen if we end the Fed? Would we move to a gold standard, silver standard, commodity basket standard, bitcoin standard, competing currencies or anything else that would require government officials to change their behavior? Or USG greenbacks?