The Federal Reserve has long been recognized as a necessary force in the U.S. economy for regulating the money supply. However, the Federal Reserve, or ‘The Fed’, has done more harm to the American economy over the past century and will continue to do so as long as it exists. There are plenty of reasons why the reserve should be audited and abolished, so the free market can prosper again.
Reason 1: Bailouts
When the Great Recession occurred, millions of Americans lost their money, jobs, their homes, and in many cases, all three. The effects of the recession were felt for several years, and unfortunately, the federal reserve acted and bailed out the big banks when the system collapsed. Bailouts are always bad, but it is interesting how the Fed always bails out the big banks while the smaller banks suffer.
This is bad because not only is it at the taxpayer's expense, but it teaches the bankers nothing and that they can continue to act irresponsibly and make risky decisions that will harm the economy and their investors. The reserve, like other government agencies, loves to create a system of dependency so that whenever they alter interest rates, it often leads to investors being unable to pay what they owe. These bailouts often come just after many investors were encouraged to spend and invest far more than what they could actually afford, leading to the housing market’s collapse in the late 2000s.
Reason 2: CDBCs
Because of the massive and wasteful government spending, the American dollar has crashed and burned, leading to runaway inflation, higher interest rates and taxes, and higher unemployment. The Fed, which prints trillions of dollars out of thin air, is partially responsible, and now they want to go through the digital market. It now appears that the Fed is trying to make CDBCs the primary American dollar, which is not a good idea.
CDBCs would allow the government to spy on Americans far more than they do already, but this time with digital currency. Based on the power of the Fed and their liking to bail out the big banks, they probably would want to be the sole form of digital currency and would try to eliminate alternative forms of currency. This is un-American, and unconstitutional as the government has no right to tell people what currency they use, and not only that, but many people live off cryptocurrency, so eliminating that would be destroying many Americans’ way of life.
Reason 3: Massive Printing-Massive Spending
One way in which the Fed has destroyed the dollar is by simply printing more of it. Some people would think that printing more money will be good, but this is not true. Sadly, people who think printing more money solves anything are in charge of the Fed.
In times of crisis, usually because of government spending and interference in the free market, the Fed comes in to save the day by printing trillions of dollars, which usually ends up causing higher inflation by devaluing the dollar. This money is often used to bail out the big banks, while the small banks are left to suffer. However, during the COVID-19 pandemic, people became sympathetic to money printing and were more than willing to accept relief checks, but this has had negative effects on the economy and the effects will continue to be felt for several years.
Not only does the Fed encourage irresponsibility and is a system of corporate welfare but printing so much money enables the government to spend it. With so much money on hand, the government often spends it on what it considers sympathetic causes, but these causes end up causing more harm. An example of this is seen with America's overseas wars.
Reason 4: The Financier of War
The United States frequently finds itself involved in war, whether it is funding a proxy war, or sending its own troops directly to combat. This is another reason the government utilizes the Fed, because whenever it feels compelled to defend another country or sees an opportunity to nation-build, the Fed is right there to print money for a war. If there is one thing in D.C. that does its job, it’s the Fed, and unfortunately the money it prints is used for more foreign aid and more war.
The United States has spent hundreds of billions of dollars on these wars and continues to borrow more and more which further ramps up the deficit. While this happens, many American citizens lose their jobs and wind up homeless largely because the Fed enables wasteful spending. If the United States abolished the Fed, the bureaucrats would be forced to recognize that sound money doesn’t just pop out of thin air and that wasteful spending and unlimited money printing have done irreparable damage to the economy.
The Federal Reserve has been an unhealthy system that enables big government and big spending since it was first created in 1913. The Fed has played a role in many of the financial messes the United States has previously found itself in and is certain to cause more financial trouble with spending cuts seemingly not in the minds of many leaders. Ron Paul and many others tried to warn us about the dangers of central banking, and how it hurts financial competition and finances war, but the Washington elite did not and still do not want to hear it.
Have an opposing viewpoint to this opinion?  Let us know.  All views are welcome.  Send your thoughts to our Editorial Staff – Editor Dylan Hicks dhicks@student.dean.edu or Dean Daily Faculty Advisor, Professor John Rooke jrooke@dean.edu