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It depends on what you consider evil. The Federal Reserve is an independent, non-government, for-profit, tax-exempt agency that collects their profits at the expense of the tax payer through income tax and inflation so if you consider that kind of theft evil then yes, the Federal Reserve is inherently evil. However, the Federal Reserve also has a vested interest in the health and prosperity of the US economy because that is the hand that feeds it so in that sense the Federal Reserve is not evil, nor does it want to destroy the country. I think "evil" is too strong a word to describe the Federal Reserve but a word such as corrupt, sinister, cunning, shrewd....what else....I guess that's enough. That describes the Federal Reserve. The one thing I can't understand about the Fed/Gov't relationship, is why the Government doesn't print/create its own money and charge a sum of interest to the borrower and return that sum of interest to themselves rather than handing it to the Fed? Assuming the Gov't could balance its budget - which is a far-fetched dream - the government could destroy the money it collects in interest and prevent inflation. Money could be created and destroyed based on the demand for money, like it was in the colonial era. No poverty or unemployment existed when the Government used this policy. What is stopping the Government from Abolishing the Fed and taking back this power?
Sounds like you do understand and simply asked a rhetorical question. That's the point of corrupting senators & Congress to pass the Fed Reserve Act, it's power over the nation while not being held accountable by the voters. Congress can just revoke their charter, nothing is really stopping it but... Most are bought out, corrupt and/or just so stupid & passive that they are easily convinced by the majority opinion. A minority are on the fence but get bullied into by peer pressure and a few actively oppose & fight the Fed, but due to their few numbers, end up being pariahs within Congress.
The gov't printing it's own money and paying interest to itself sounds like a great idea, but in practice it would mean that we would be paying interest "to ourselves" and, while once again it sounds great, it's a rotten idea. Why? Because then it would be "free" money, since it had no cost. (that paying it to ourselves thing) If it had no cost, then there wouldn't be any constraint on gov't spending at all. You couldn't possibly think of a gov't program that wouldn't be funded if there was no cost to funding it. I know, you probably think that they do that now, but if there was actually no cost, it would make what is going on now look like pikers. The only way to have a responsible spending plan is for there to be a cost to spending, an interest cost, that prevents profligate spending. Does the benefit outweigh the cost. That's what interest expense paid to the lender does. Forces cost benefit analysis. Like I said, I know it looks like profligate spending now, but you won't have seen anything 'till you've seen these guys spend money when there is actually no cost. diatribe over
You definitely present an interesting argument but history has suggested that this method doesn't fail based on the merits of the system, but the corruption that it attracts. Back in the colonial era the colonies issued paper money based on demand for money so there was a balance to the economic system. If the money wasn't demanded it was destroyed so there was no inflation. The economy operated in equillibrium and full employment. England caught wind of what was happening and put a stop to it. It was, instead, replaced by the power of England's Central Bank. When that bank entered poverty and unemployment swept through the colonies, much the way it did in England at the time. This event in history was the primary reason for the Revolutionary War so I suppose the real question isn't how long Congress will allow the Fed to remain in power but how long the people of the US will allow the Fed to remain in power. If history is any indication, it will take a lot more oppression before the common man says, that's enough. We are nowhere near that day.
Aren't inflation, loss of purchasing power, and currency debasement the costs of such a system where money that is free is abused?
Yes, with the key word being "abused." How a money system that can be created that would not invite corruption is beyond me. It would have to be written into law, regulated, and then hold your breathe. One of the first things I learned in my first Finance class was, where there is money there is greed and where there is greed there is corruption. By virtue of the human curse, an efficient money system is not possible.
Would it be a better idea to keep the Fed a private institution as it is, but with each US citizen owning one share, and no other shares existing? That way you have all the benefits of a private Fed (the government incurs a cost on borrowing money) but all the profits go back to the people (maybe as a tax refund) which would remove its "evilness" and the corruption that comes with it.