From the Editor
Time to End the Fed
Ask an average American what his top concerns are, and the Federal Reserve System is not likely to make the list. He might worry about inflation, unemployment, the national debt, the prospect of a world war, or even the collapse of the dollar. But he probably doesn’t understand that the common cause behind all of these ills is America’s central bank — the Federal Reserve, or Fed. Behind the innocuous name, the Fed has been for generations methodically destroying the value of our currency, creating inflation, fueling boom-and-bust cycles, and incentivizing more and more debt both public and private. Through the legerdemain of fiat money creation and deficit spending, the Fed, in partnership with the Treasury Department, has also permitted an unprecedented spending binge on the military and on numerous welfare programs. Yet most aspects of the welfare-warfare leviathan would be political pipe dreams if they had to be financed by direct taxation.
What not one American in a thousand understands is that the endless cycle of borrowing and printing money is in fact a type of tax, and, moreover, a tax of a particularly dishonest and insidious kind. Rather than sending agents to extract the money from our paychecks, business transactions, and capital gains, the Federal Reserve presides over a steady transfer of wealth from the poor and middle classes to the wealthy and well-connected elites, as the mechanism of money creation causes the value of savings and paychecks to plummet even as it drives up asset values for the most privileged.
The Federal Reserve is an odd beast. Designed by secretive European bankers in the early 20th century, the institution is a unique public-private hybrid. As an article published by the Federal Reserve Bank of San Francisco puts it, “The Federal Reserve … enjoys a unique public/private structure that operates within the government, but is still relatively independent of government to isolate the Fed from day-to-day political pressures in fulfilling its varying roles.”
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