If you order your research paper from our custom writing service you will receive a perfectly written assignment on The Federal Reserve. What we need from you is to provide us with your detailed paper instructions for our experienced writers to follow all of your specific writing requirements. Specify your order details, state the exact number of pages required and our custom writing professionals will deliver the best quality The Federal Reserve paper right on time. Out staff of freelance writers includes over 120 experts proficient in The Federal Reserve, therefore you can rest assured that your assignment will be handled by only top rated specialists. Order your The Federal Reserve paper at affordable prices! Ever since the creation of the Federal Reserve System in 11 by Congress, there has been debate on whether or not the Federal Reserve had to much power. Today the debate is still on going. Through out the life of the Federal Reserve there has been fact and fiction that shows it might have a lot of power. Some reasons that people believe that the Federal Reserve is too powerful is all the myths that the people believe. One is that the Federal Reserve assassinated president John F. Kennedy and that the Federal Reserve is just a privately owned bank put out there to take the taxpayers money. No matter what the Federal Reserve is thought to have involvement in, the question is still out there. Does the Federal Reserve have too much power?
First, What is the Federal Reserve System? The Federal Reserve System is the central banking system of the United States. It is commonly known as the Fed. A central bank is the banker to both the banking community and the government. The Federal Reserve also issues the national currency, conducts monetary policy, and plays a major role in the supervision and regulation of banks and bank holding companies. The system was started when the Federal Reserve Act of 11 was enabled. The 11 act established a seven-member Federal Reserve Board, consisting of five presidential appointees, each from a different Federal Reserve district, plus the secretary of the treasury and the Comptroller of the Currency.
In the United States, these roles are the responsibilities of officials of the Federal Reserve System. The Board of Governors and the top officers of the 1 district Federal Reserve banks are the main officials of the Fed. The Board of Governors is located in Washington D.C. and the top officers of the 1 district banks are located throughout the nation in the 1 known districts. The 1 districts each have a main Reserve Bank, which is located in their own district. The Reserve Banks are located in Boston, New York, Philadelphia, Cleveland, Ohio, Richmond, Virginia, Atlanta, Georgia, Chicago, St. Louis, Missouri, Minneapolis, Minnesota, Kansas City, Missouri, Dallas, Texas, and San Francisco. These Reserve banks have a board of officials that control. They are known as directors and control the discount rate.
The Federal Reserves basic powers involve the Board of Governors, which controls policy issues concerning bank regulation. The Feds actions have a significant effect on United States interest rates and on stock, bond, and other financial markets. The Fed controls the interest rates by loosening or tightening the money supply. Some people consider The Federal Reserve, a fourthanch of the United States government because it is made up of a powerful group of national policymakers. These policymakers are free from the usual restrictions of governmental checks and balances. The Federal Reserve is relatively free from political pressures, but it must report frequently to the
Purchase your paper on The Federal Reserve Congress on the conduct of monetary policy. This freedom gives the Federal Reserve a lot more power than any other agency. This freedom is a large part of the reason why people are against the Fed.
The Federal Reserve doesnt have complete authority all the time. The United States banking system is very complex. The authority of the Federal Reserve is shared in some places. For example, in mergers or the examination of banks with other federal agencies like the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC), the Reserve works with those regulatory agencies to review the banks every year. In the critical area of regulating the nations money supply in agreement with national economic goals, the Federal Reserve is independent within the government.
Many people wonder why the Federal Reserve was created. Before the Federal Reserve was created the economy would surge and then there would be an economic crises that would interrupt the growth. There was no regulation and the monetary system was very fragile. The United States banking system was unable to respond to the flexibility of the business cycle. The banking system was very unregulated. The Federal Reserve is responsible for the maintenance of monetary and credit conditions to keep a sound business activity in all fields, such as agricultural, industrial, and commercial. So, the Federal Reserve Act of 11 was enabled and this gave the country a lot more stability when it needed it most.
Next, How does the Fed work? The Fed has three main tools to do its job. The most important is to set the federal funds rate, which is what banks pay each other for overnight loans. The committee sets a target for this rate, but not the actual rate itself. When the news media report that the Fed changed interest rates, its the federal funds rate that is being referred to.
The second tool is the discount rate, which is what banks pay to borrow money from a Federal Reserve Bank. This is usually lower than the federal funds rate, but the two are closely tied. The third tool is the reserve requirement. This is a percentage of deposits that all banks must hold in reserve and cannot loan out. This rate is usually around 10 percent, but it can change from time to time. This is a very powerful tool, but it is rarely used. So this power is mostly theoretical, held in reserve, so to speak.
One last thing that is needs to know about the Fed is who is Alan Greenspan? Alan Greenspan is chairman of the Federal Reserve Board and arguably one of the most powerful individuals in the United States. Greenspan has demonstrated a sharp intellect along with an unusual ability to keep his independence while still following the trends of political power in Washington, D.C.
So why do people think that the Federal Reserve System has too much power? People believe that The Fed has too much power for many reasons. A lot is because of the great myths about the Federal Reserve.
People believe that The Federal Reserve Act of 11 was the result of a secret meeting between Wall Street Bankers and government officials on Jekyll Island, Georgia and gave New York City banks control over the money supply. In reality, the meeting did take place, but it was not a secret. Congress rejected the plan for a central banking system that came out of this meeting. The control over monetary policy was given to the Federal Reserve Board, a government body, not to banks.
It is also believed that The Federal Reserve Act is unconstitutional because the Constitution does not give Congress the power to create a central bank. In reality, Federal and Supreme Court rulings have found the Federal Reserve to be constitutional, under the necessary and proper clause of the U.S. Constitution (Article I, Section 8, clause 1). The constitution also forbids paper money and requires all money to be either gold or silver coin. Although the constitution forbids States from making anything but gold or silver a legal tender, it places no such restriction on Congress.
Another myth is the Federal Reserve is owned and controlled by foreigners, who dictate monetary policy for their own benefit. This is just not true. Each Federal Reserve Bank is owned by member banks in that district. Individuals and non-bank institutions, foreign or domestic, are not allowed to own shares in any Federal Reserve Bank. Again, the Board sets monetary policy not the Federal Reserve banks.
Another myth, the Federal Reserve is a privately owned bank that profits at taxpayer expense. Fact, the member banks in each district privately own each of the 1 Federal Reserve banks. However, the government-appointed Board of Governors controls these banks. Also, the Federal Reserve System rebates almost all of its profits to the Treasury each year, actually reducing the taxpayer burden.
If it were not for the Federal Reserve charging the government interest, the budget would be balanced and we would have no national debt. When the government runs a budget deficit, it borrows the money from the Fed at interest. If the Fed did not charge interest or if the government simply printed its own interest-free currency, then we would have a balanced budget and no national debt. The facts are that The Federal Reserve banks have only a small share of the total national debt (about 7%). Therefore, only a small share of the interest on the debt goes to the Fed. Regardless, the Fed rebates that interest to the Treasury every year, so the debt held by the Fed carries no net interest obligation for the government. In addition, it is Congress, not the Federal Reserve, who is responsible for the federal budget and the national debt.
It has also been said that The Federal Reserve has never been audited. The Federal Reserve consistently resists attempts to audit its books. This is because any independent inspection would reveal the Feds corruption. The fact is that independent accounting firms conduct full financial audits of the Federal Reserve banks and the Board of Governors every year. The Fed is also subject to certain types of audits from the Government Accounting Office.
One of the greatest myths is that, the Federal Reserve had President Kennedy killed because he tried to reduce the Feds power by authorizing the Treasury to issue silver-backed currency. The truth is that Kennedy actually wanted to phase out silver certificates, and agreed with the Federal Reserve on most policy matters. He actually favored legislation to give the Fed more power, not less.
These mythss are not the only reasons people have for thinking the Federal Reserve has too much power. There are many valid reasons. One thing that bothers people the most about the Federal Reserve is its name. It is not federal, nor does the government own it. It is privately owned. It pays its own postage like any other corporation. Its employees are not civil service. Its physical property is held under private deeds and is subject to local taxation normally government property is not.
The control of the reserve is a large part of the debate. Each of the twelve Federal Reserve Banks is organized into a corporation whose shares are sold to the commercial banks and economies operating within the Banks district. Shareholders elect six of the nine the board of directors for their regional Federal Reserve Bank as well as its president. The top eight stockholders of the New York Fed were, in order from largest to smallest, Citibank, Chase Manhattan, Morgan Guaranty Trust, Chemical Bank, Manufacturers Hanover Trust, Bankers Trust Company, National Bank of North America, and the Bank of New York. Together, these banks owned about 6 percent of the New York Feds outstanding stock. Many of these banks are owned by about a dozen European banking organizations, mostlyitish.
Americans do not like the fact that a lot of the Fed. is controlled by outside investors. Americans want to keep the control inside the country. Since the banks of New York owned the largest portion of stock in the New York Fed, it is believed that they could handpick its board of directors and president. This would give them control over Fed operations and U.S. monetary policy. This argument is faulty because each commercial bank receives one vote regardless of its size. It is very hard to prove who exactly controls the Fed.
The control is not the only reason why people do not like the Federal Reserve. Where the money the Federal Reserve makes goes is the other reason? Our currency comes into circulation only when the government borrows currency from the Fed. The Federal Reserve charges interest on the money that goes into circulation. The Fed. makes roughly about four cents per bill.
The opinion of a lot of Americans is that the Fed should not have the power to tax the use of our own currency. People also believe that the money that the Federal Reserve gets from the taxation of our currency just goes to the Federal Reserve directly. People think that the Fed just keeps the money for itself. What actually happens is that the Federal Reserve deposits the money back into the United States Treasury. The Federal Reserve each year makes about 00 million dollars from the taxing of the currency. 80 million dollars is given back to the United States Treasury and the 0 million dollars is used to keep the Federal Reserve working. People do not like being forced into using the bank currency. Some think that we could still use gold and silver instead of being taxed for the currency we are being forced to use.
Some reasons for the people against the Federal Reserve starts back to before the Reserve first started. For centuries there has been a war between the money controllers and their opponents trying to get the control away from them. One of the American Founding Fathers was Alexander Hamilton, who was a money controller who believed in a strong centralized federal government and a central bank. One of his opponents was President Andrew Jackson who vetoed the extension of the charter of the United States Bank (monopoly central bank) in 18. Some people believe that the money controllers constitute the secret government of the world, and that most or all of the national governments are just puppets of the secret government behind the scene. People do not like the fact that so few people can control their monetary system.
Yes, the Federal Reserve does have a lot of power. That I do agree with. I do know if I believe it is too much power. Since the Fed was established there has yet to be many problem with it. People do not like the idea of the Fed because it has control of their money. They also do not like it because the government has little control over the Federal Reserve. People believe that if the government is not controlling the Fed then there will be corruption.
Since there has yet to be a problem with the Federal Reserve System I see no need to change it. If a problem does arise then there maybe need for adjustment to the System. Until then I would allow the system to keep working.
As for the myths about the Federal Reserve, I think that if the people knew the facts then there would be more people for the Reserve. People believe all these myths and do not take the time to research and find out if they are really true. I would not start disliking the Fed because I thought that they killed Kennedy. Some of the points that i have seen do make sense. Why are we being taxed to use our own curreny, if the money is just being redeposited into the Treasury. Also, why does Alan Greenspan have so much power? We could maybe have more people work with him and be just as powerful. Why let one man be the most powerful man in the country.So, no the Federal Reserve System does not have to much power. People want just Americans to be involved in our money system and the fact that Europeans own a lot of stock upsets us, but they really have no say in our interest rates no matter what is said. The Federal Reserve has worked since the early 100s and I believe that it will still work.
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