The Founding of the Federal Reserve | Murray N. Rothbard

A speech by Murray N. Rothbard. Presented at the Mises Institute's 1984 "Seminar on Money and Government," in Houston, Texas.

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[MrWakethesheeple]

15 people are misinformed or evil.

[RSG132]

@MrWakethesheeple

15 supporters of Keynes actually



[TouKxiePie]

TL;DR



[cpklapper]

@MattQB1990 I am an economist. "Cumulative fiscal deficit" is not a sentence, nor even a catchphrase, but a functional description of the federal debt. A deficit is a negative balance. A fiscal deficit is a deficit which a government has in its finances. The cumulative fiscal deficit is therefore the negative balance a government accumulates over time by postponing with debt what they could clear with fiat money. That is, the federal debt is an accumulation of prior years' deficits.

[cpklapper]

@MattQB1990 I am not one of those "central bank advocates". I see no point in controlling inflation, prices, money supply or the economy through the banking system. Rather, I am advocating banks solely as adjudicators of financial contracts. The structure of the banking system I advocate would therefore be part of the federal structure of our judicial system. I would abolish the Federal Reserve, the private banking system and all debt beyond very short term, non-revolving loans.

[MattQB1990]

@cpklapper Are you an economics major? Who are you trying to impress with nonsencial sentences like "cumulative fiscal deficit"? Your last sentence makes absolutely no sense but further validates the problem with "scholarship" when it comes to finance. There is a library of fancy sounding words and names for central banking activity, things like "quantitative easing" when it's really just "print out a bunch of money and give it to our insider friends".

[MattQB1990]

@cpklapper Why do we need a central bank in the first place? The stated goals of central bank advocates are to "control inflation" and "manage the economy, make it more stable". If you look at the record of the Federal Reserve, it should be abolished on the grounds alone that it has failed utterly to achieve those stated goals.

[cpklapper]

@MattQB1990 A judicial bank, run by the book by nitpicking bureaucrats and given neither the authority nor the incentive to take positions, would be free from greed and imagination. The bubbles and inevitable crashes, however, are caused by debt, so that prohibition would have to be in place as well. A fiat money supplied by a cumulative fiscal deficit would be one where inflation and deflation would be immediate, transparent and directly attributable to Congress.

[cpklapper]

@MattQB1990 I am pro-local in both government and industry so I don't know you came up with that impression or the others in your comment.

[cpklapper]

@AndrewLLFrazier Creating money by fiat is much to be preferred, especially if it is directly related to budget deficits because it does not require additional money creation. Fiat money would be destroyed by budget surpluses, thus providing an equilibrating mechanism. The presence of federal debt works counter to this balancing device because it makes surpluses harder to achieve. Liquidating the debt while increasing the reserve ratio can remove that barrier with stable prices.

[cpklapper]

@AndrewLLFrazier Debts allows the borrower to bid up prices (directed inflation) on the goods they are trying to buy with the borrowed funds. When those funds are deposited by the seller at a bank, which then lends out a multiple of it, the inflation circulates around the economy and becomes general. This is VERY BAD!!! The ability to repay those loans is dependent on the creation of more new money because of interest, thus turning the economy into a Pnnzi scheme.

[cpklapper]

@AndrewLLFrazier I did not say rising wages in general, I said rising wages for "skilled workers". The good which such a wage rise accomplishes is to encourage workers to acquire those skills and, if such labor is no forthcoming, the replacement of that skill by other factors. Not allowing those wages to increase compounds an existing shortage. Similarly for a scarce item, the rising price enables a market to move toward equilibrium. Lower prices make goods less available.