Milton Friedman on The Fed

Dr. Friedman (born July 15, 1912), a 1976 Nobel Prize winner for excellence in economics, was one of the most effective advocates of economic freedoms and free enterprise. A Senior Research Fellow at the Hoover Institution. At the age of 94, Dr. Friedman passed away on November 16, 2006 in San Francisco, California.

"When government -- in pursuit of good intentions -- tries to rearrange the economy, legislate morality, or help special interests, the costs come in inefficiency, lack of innovation, and loss of freedom. Government should be a referee, not an active player. In the United States, government has gone far beyond the basics."

Source:
http://home.att.net/~mwhodges/friedman.htm

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[hoodoo961]

@ipwnallnubscuzirock while, I will check my math again, but last time I looked, an INCREASE of 3-5% a year qualifies as "more money." Maybe you are confused about the definition of "increase" and "more."

[ipwnallnubscuzirock]

@hoodoo961 he admits it needs a steady supply of money, such as an automatic increase of 3-5% a year. I believe he did not advocate a rampant and reckless increase in monetary supply due to the spendthrift decision of some faceless, anointed official but I'll let his books, debates, and videos speak for themselves. Try his book "Monetary Mischeif" if your actually interested, and if you happen to be a troll, then I would suggest you get lost or shut up.

[ThePenWolf]

Well, it would take a fundamental, practically religious state of mind. Even if Paul became president, Congress would have to repeal the Fed. That means that Socialism, in any shred of a form, has to be dismantled as a viable choice for these morons. And for that to happen you have to replace it with moralilty, Faith, and Character. This is why John Adams said that they made a Constitution for a truly religious people.

[clevebrowns3]

@ThePenWolf I'm glad to see you agree with me. I hope that someday our voices will be heard. I think that our best chance of abolishing it would be if Ron Paul became President. However, the chances of that aren't that high.

[ThePenWolf]

@clevebrowns3 Absolutely. Even so, we can't do it overnight. It must be a long term decision and process. We're not on a Gold Standard. It'll take a lot of time to get there. Unfortunately, we may never get there with a government that changes every four to six years.

[clevebrowns3]

I usually agree with the great economist Milton Friedman. However, I disagree with him that the Federal Reserve should have gave the banks the money that was demanded by the depositors. The reason I do is because it would have caused massive inflation, maybe even hyperinflation. I think the best solution to avoid anymore great depressions is to abolish the Federal Reserve.

[hoodoo961]

Even Friedman admits an economy needs more money, not deflation. Austrians get a clue.

[jetrpg22]

kagar and kawika are both correct.

Kagar got to the root of the problem of why the great depression occurred, why the us today just had a repression as well false numbers created by the FED.

At the same time when a bank failed and people started withdrawing Friedman is correct (give people their money by selling securities) this would have stopped the run on banks, but not resolved the entire issue. Other speeches does address that the fact that the fed stopped growth , stopped the economy.

[KagarBeardtooth]

That's preposterous. The economy wasn't undergoing natural growth, it was being pumped up with easy credit from the Fed. The unnatural supply of money distorted the market and resulted in severe malinvestment which brought about the depression. The supply increase of money that would have been required to support the declining economy would have risen exponentially, resulting in hyperinflation and a Zimbabwean currency devaluation.

[Kawika477]

Hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. No hyperinflation would've occurred with this extra money, because the economy was growing and the Feds had let the supply of money fall by 3%. If the Federal Reserves had bought enough govt securities so that people can withdraw their money, then no panic and no massive withdrawals. The system would've stayed intact and no great depression.