U.S. National Debt Is 5000 Times Larger Than When The Federal Reserve Was Created
Have you noticed that very few people in the mainstream media ever directly criticize the Federal Reserve? But why should that be the case? Criticizing top politicians from both major political parties has become a national pastime. Most Americans love to throw mud at either the Republicans or the Democrats. But we are told that the Federal Reserve is “above politics” and that it is absolutely vital that the Fed remain “independent”. The reality is that the Federal Reserve has more control over the performance of the U.S. economy than the president even does, and yet most Americans never spend much time thinking about the Fed at all. It is almost as if someone has instructed us to “ignore the man behind the curtain” and most of us just blindly obey. With the economy in such a mess and with the national debt exploding so dramatically, isn’t it about time that we had a national conversation about the performance of the Federal Reserve? Isn’t it about time that we evaluated whether the Federal Reserve is doing a good job or not?
Today I came across a Bloomberg article that was full of endless praise for the secretive Jekyll Island conference in 1910 that developed the plan for the Federal Reserve system. The following is a very brief excerpt from that article….
Although it may seem shocking to watch the 112th Congress, there was a time when national leaders were swift and decisive in getting things done. In November 1910, in the space of less than two weeks, a group of government and business leaders fashioned a powerful new financial system that has survived a century, two world wars, a Great Depression and many recessions.
But has this “powerful new financial system” really performed well for the American people?
The Federal Reserve system has now been in place for about 100 years. That is certainly long enough to evaluate how well it has performed.
So has the Federal Reserve done a good job?
Well, one of the things that the Federal Reserve is charged with doing is to protect the value of our currency. In other words, they are supposed to keep inflation under control.
In that regard, the Federal Reserve has failed miserably. The U.S. dollar has lost 96.2 percent of its value since 1900, and almost 100 percent of that decline has come during the Federal Reserve era.
The other half of the Federal Reserve’s “dual mandate” is to keep unemployment low.
It doesn’t take a genius to figure out that the Fed has failed there too.
In the United States today, there are less Full article here
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crisisboom
CRISISBOOM 
In a properly run economy, the U.S. would have paid down its debts during good times, rather than create debts in order create good times at someone else’s expense. THEN, when bad times came, the U.S. (or any other country on the same program) would have ample ability to do some spending and stimulate the economy. If you pay off debt in the good times, then you have the capacity to use debt to get by in the rough times. That kind of economic program evens out the highs and lows and makes life a lot more livable in a responsible way.
The U.S. has been so profligate with debt during the good times that it has no capacity to take on more debt now. (In one of the greatest travesties of American history, we used national debt and personal debt to create good times for ourselves by setting up our children to pay for our easy high living.)
The U.S. already has more debt than it will ever find the political will to pay off. More dangerous by far than that, as a result of these bailout spending policies that began in the Bush II years, the U.S. NOW has more debt than it could ever pay off, for paying off the debt at any time in the future will be such a burden that it would pull even the strongest of economies right back down.
We have passed the point of no return, and that is why Krugman and others want to keep up deficit spending. Without it, there would be / will be NO economy because the old economy is existing solely on life support now. When an economy is moribund, it would be better to declare a “year of Jubilee” and forgive all debts everywhere and do a complete reboot. Tough as that is, it would put the entire world in better shape for the future.
“Throughout the years of Reagonomics, however, the United State’s national debt as a percentage of GDP — after decades of decline – grew rapidly and continued to do so under President George Bush the First. Then U.S. debt plunged for the first time throughout the Clinton years (when taxes on the wealthy were raised) and finally began to rise again during the Bush II years (when taxes on the wealthy were cut again … even more than they were cut by Reagan).” ( http://thegreatrecession.info/blog/?p=2213 )
Obama has essentially continued with the Bush Bailout Plan.
–Knave Dave