End The Fed?..And then what

That won't happen until there are (enough) financially literate voters.

 

I personally believe we need to move towards that. But it is going to be painful - housing values will get absolutely destroyed.

 

how do you then control aggregate demand.

through fiscal policy. not now after the quantitative easing.

 

The FED's role is not as important as VE's on the left trend line of this depression container. 3 to go.

 

It doesn't work. Fiscal policy cannot stop people from essentially being their own banks and creating (excess) money through credit.

 

to an extent i agree with you. but why use credit in the first place. there are alternatives to both aggregate demand control and to capital generation and saving other than credit thus no interest rate is required if they are used.

could these be the solution.

 

how do you then control aggregate demand.

through fiscal policy.



It doesn't work. Fiscal policy cannot stop people from essentially being their own banks and creating (excess) money through credit.


i was the one who said it would work in the first place. read the part after the full stop. it is not possible now anyway due to the government being full of debt. they cannot increase aggregate demand much further as they have overspent.

 

That's hillarious. Yeah that response should be expected. LOL.

 

And that would also be our doom.

 

There aren't alternatives to the Fed. An autonomous agency trained specifically for regulating both monetary and fiscal policy is required for both of these things to be effective. What the Fed learned in the last 70 years since the first depression was that you had to have policies that enforced the other. That is, you can control fiscal policy with monetary incentives and means, and you can control monetary policy through fiscal measures. Both of these have to be controlled by one entity independent of government bureaucracy. You can say it is a bureaucracy, but one devoid of politics. The main excuse I have for myself, is that I'm an economist, not a republican or democrat, and that would the very problem with anything other than having the Federal Reserve dictate interest rates and the money supply. What is and what should be are conflicting in most cases, and the debate would stagnate into total non-productive measures. Anyway, politics has to be left out, which is why the Fed should not be abolished, ever, and I doubt I'll see it in my lifetime.