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Responses: 9
If anyone reads the full history of the Federal Reserve, they would see why they exist. To protect banks and investment companies, not to stabilize the dollar. Regardless of the tax structure, the IRS is necessary, but with good policy, much reduced in size and scope.
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SFC Dante Alanis
I agree with you... We do need these organizations, but the bureaucracy, regulations and corruption need to be greatly reduced. There are many people that are there with not so good intentions towards the American people, especially the working class.
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Ok - lets clear something up, if you think we don't need a central bank, please go read an economic history of the United States prior to the establishment of the Federal Reserve system - the level of economic illiteracy here is just amazing.
The role of the central bank is critical to providing a stable banking system - within a central banking system there is no stabilizing economic backstop - it's more than just the FDIC ( which was established in 1933 as a result of the Great Depression)
A brief outline of before the establishment of the Federal Reserve ( not including the period 1800-1834 as the economy was still formative)
1836 - 1838 - Major recession, banks stopped paying in gold, 600 bank failures, southern economy collapsed
1839 - 1843 - deep depression, deflation, bank failures
1845 - 1846 - mild depression
1847-1848 - strong recession, linked to bank crisis in Britain
1853 - 1854 - very high interest rates, railroad failures
Panic of 1857 - 5,000 business failures, mass unemployment, protests in the streets, loss of confidence in banks
1860-1861 - another recession, bank panic narrowly averted by onset of civil war
1865 - 1867 - post war deflation, rolling periods of financial instability associated with Reconstruction and financial instability in Europe crossing the Atlantic to impact US
1869 - 1870 - continued rolling financial instability, major financial panic associated with crop failures, start of Farmer's Movement
Panic of 1873 - the "Long Depression" - actually worse than the Great Depression. Economic conditions brought about by failure of various speculator markets, large scale deflation and wage cuts - Great Rail Strike of 1877 - US return to gold standard in attempt to calm markets
1882 - 1885 - Recession - continued depression in prices, railroad building decline, Panic of 1884 (bank failures)
1887 - 1888 Mild recession
1890 - 1891 - recession caused by monetary failures internationally and bank panic in England
Panic of 1893 - bank failures, economic stagnation and deflation
Panic of 1896 - general economic deflation and productivity declines, bank failures
1899 - 1900 - short recession
1902 - 1904 - slow decline in economic activity, deflation in wages and prices
Panic of 1907 - Major bank failures - severe monetary contraction (no liquidity in the markets - Congress starts work on federal reserve system
Panic of 1910 - 1911 - lon depression, economic growth almost non-existent, deflation
1913-1914 - Recession result of effects from Panics of 1907 & 1910 - Federal Reserve Act signed
Note that in the above sequence almost all recessions where much harder economically than periods of recessions post establishment of the federal reserve and resulted in no or little growth, deflation and bank failures. Prior to 1933 when a bank failed, everyone lost their money with no chance of getting back. The 'panic' periods are very much akin to periods of depression and in every case were as severe or worse than the "Great Depression" relative to economic impact. In fact the Panic of 1873 is also considered the Long Depression which by some measures lasted until 1896. Economic growth stagnated in the US -and if you read history, it gave rise to a series of periods of unrest , riots, the formation of anarchist groups and violent unions (and violent suppression of unions).
Since the establishment of the Federal Reserve system this country has seen only two major events - the Great Depression and the Great Recession. One of the key differences between the two was the way the Federal Reserve acted - in the Great Depression, the Federal Reserve tightened monetary policy which further removed liquidity from the markets - in the Great Recession, the decision by the federal reserve to loosen monetary policy had the effect of providing liquidity and keeping the markets (and economy) from getting worse. The Great Recession was further eased by the existence of the FDIC - even though banks failed, most depositors where insured - and while banks 'failed' very often the FDIC forced mergers which preserved depositor funds without the FDIC having to pay out.
Yes there have been recessions since the Federal Reserve was established, but nothing on the scale of what a recession meant prior to the federal reserve.
Sorry for the long post, but simple 'polls' like this are a pet peeve - it's like asking someone ' So when did you stop beating your wife'
The role of the central bank is critical to providing a stable banking system - within a central banking system there is no stabilizing economic backstop - it's more than just the FDIC ( which was established in 1933 as a result of the Great Depression)
A brief outline of before the establishment of the Federal Reserve ( not including the period 1800-1834 as the economy was still formative)
1836 - 1838 - Major recession, banks stopped paying in gold, 600 bank failures, southern economy collapsed
1839 - 1843 - deep depression, deflation, bank failures
1845 - 1846 - mild depression
1847-1848 - strong recession, linked to bank crisis in Britain
1853 - 1854 - very high interest rates, railroad failures
Panic of 1857 - 5,000 business failures, mass unemployment, protests in the streets, loss of confidence in banks
1860-1861 - another recession, bank panic narrowly averted by onset of civil war
1865 - 1867 - post war deflation, rolling periods of financial instability associated with Reconstruction and financial instability in Europe crossing the Atlantic to impact US
1869 - 1870 - continued rolling financial instability, major financial panic associated with crop failures, start of Farmer's Movement
Panic of 1873 - the "Long Depression" - actually worse than the Great Depression. Economic conditions brought about by failure of various speculator markets, large scale deflation and wage cuts - Great Rail Strike of 1877 - US return to gold standard in attempt to calm markets
1882 - 1885 - Recession - continued depression in prices, railroad building decline, Panic of 1884 (bank failures)
1887 - 1888 Mild recession
1890 - 1891 - recession caused by monetary failures internationally and bank panic in England
Panic of 1893 - bank failures, economic stagnation and deflation
Panic of 1896 - general economic deflation and productivity declines, bank failures
1899 - 1900 - short recession
1902 - 1904 - slow decline in economic activity, deflation in wages and prices
Panic of 1907 - Major bank failures - severe monetary contraction (no liquidity in the markets - Congress starts work on federal reserve system
Panic of 1910 - 1911 - lon depression, economic growth almost non-existent, deflation
1913-1914 - Recession result of effects from Panics of 1907 & 1910 - Federal Reserve Act signed
Note that in the above sequence almost all recessions where much harder economically than periods of recessions post establishment of the federal reserve and resulted in no or little growth, deflation and bank failures. Prior to 1933 when a bank failed, everyone lost their money with no chance of getting back. The 'panic' periods are very much akin to periods of depression and in every case were as severe or worse than the "Great Depression" relative to economic impact. In fact the Panic of 1873 is also considered the Long Depression which by some measures lasted until 1896. Economic growth stagnated in the US -and if you read history, it gave rise to a series of periods of unrest , riots, the formation of anarchist groups and violent unions (and violent suppression of unions).
Since the establishment of the Federal Reserve system this country has seen only two major events - the Great Depression and the Great Recession. One of the key differences between the two was the way the Federal Reserve acted - in the Great Depression, the Federal Reserve tightened monetary policy which further removed liquidity from the markets - in the Great Recession, the decision by the federal reserve to loosen monetary policy had the effect of providing liquidity and keeping the markets (and economy) from getting worse. The Great Recession was further eased by the existence of the FDIC - even though banks failed, most depositors where insured - and while banks 'failed' very often the FDIC forced mergers which preserved depositor funds without the FDIC having to pay out.
Yes there have been recessions since the Federal Reserve was established, but nothing on the scale of what a recession meant prior to the federal reserve.
Sorry for the long post, but simple 'polls' like this are a pet peeve - it's like asking someone ' So when did you stop beating your wife'
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GySgt Carl Rumbolo
Cpl (Join to see) - "fill out a postcard and mail it' - Cruz is a being disingenuous - you still need an system of administration, an audit function and enforcement mechanisms - the infrastructure necessary to administer a flat tax or a VAT (and you will need both to have adequate revenue since all of the Republican proposals rely on dramatic cuts to corporate taxes) - looking at other countries with VAT systems, proportionally in terms of per capita , a flat tax/VAT IRS wouldn't be significantly smaller - some candidates propose that they can 'cut the IRS in half' or 'eliminate entirely the IRS' when in actuality you'd see the IRS shrink about 10-15%
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SFC Dante Alanis
SSG(P) Ryan R. - That is the right answer... these bureaucrats need to find a civilian job and help contribute instead of making it more complicated than it should.
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SFC Dante Alanis
GySgt Carl Rumbolo - That is partially correct... once a simplified mechanism is established, software and hardware may be used to do a large portion of the verification. The enforcement part is both physical, but a significant part can be done electronically.
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