Do we need the IRS or Central Banks?

SSG Ed Mikus — Thu, 03 Mar 2016 14:13:03 -0500

I have heard a lot of talk over the last 10 years about abolishing the IRS and the central banks, I understand this has good and bad implications but how do you see them? Do we need them? Would things be better or worse without them?

Response by 1SG Private RallyPoint Member made Mar 3 at 2016 2:15 PM

1SG Private RallyPoint Member — Thu, 03 Mar 2016 14:15:37 -0500

With the current structures in place, yes.
If you want to get rid of the IRS, you need to get rid of the tax code and go with a flat tax.

Response by SPC Andrew Griffin made Mar 3 at 2016 2:19 PM

SPC Andrew Griffin — Thu, 03 Mar 2016 14:19:21 -0500

What will we replace it with?

Response by Sgt Aaron Kennedy, MS made Mar 3 at 2016 2:40 PM

Sgt Aaron Kennedy, MS — Thu, 03 Mar 2016 14:40:48 -0500

We can't ever get rid of the "IRS" but we could likely modify it to something significantly different.

As an example, Texas doesn't have State Income Tax. They still have a Comptroller Department that handles taxation issues though.

As long as there are "Taxes" (fines, etc) which are used as "Revenue" by the Government, there will have to be a Government Agency which handles the Revenue. It may be a much simpler and streamlined process which is less intrusive to the People, but it will exist.

To go from Macro to Micro. Who handles PAY in the Military? DFAS, but we still have payroll clerks (Financial Management Technicians) who are uniformed.

Response by A1C Private RallyPoint Member made Mar 3 at 2016 3:08 PM

A1C Private RallyPoint Member — Thu, 03 Mar 2016 15:08:16 -0500

The famous line...Vice President Burr killed Alexander Hamilton 15 years too late. 1791 Hamilton creates the Central Banking System which lead to the Federal Reserve which is a private group that controls America. The IRS can be deleted by simply putting a tax on what is spent. No loop holes. A company pays the same percentage as a plumber.

Response by MAJ Ken Landgren made Mar 3 at 2016 4:31 PM

MAJ Ken Landgren — Thu, 03 Mar 2016 16:31:17 -0500

Sometimes decentralizing a functional organization will make a mockery of the situation.

Response by GySgt Carl Rumbolo made Mar 3 at 2016 9:41 PM

GySgt Carl Rumbolo — Thu, 03 Mar 2016 21:41:32 -0500

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'

Response by MCPO Roger Collins made Mar 4 at 2016 10:01 AM

MCPO Roger Collins — Fri, 04 Mar 2016 10:01:36 -0500

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.

Response by SSG Ed Mikus made Mar 4 at 2016 12:02 PM

SSG Ed Mikus — Fri, 04 Mar 2016 12:02:03 -0500

I have learned a great deal from this discussion, thank you all!

Response by MSgt Neil Greenfield made Apr 16 at 2016 10:00 PM

MSgt Neil Greenfield — Sat, 16 Apr 2016 22:00:29 -0400

People don't seem to realize that if the IRS was abolished, and taxes were not collected by the U.S.A, none of us would have any of these fancy titles we call ranks.