LittleSpeer
Monthly Donor
I found this image in my random search's and I thought of no better place to post it then here. While it might be a tad ASB, what if said United States Notes were decided to replace the standard currency?
Switch Paper Money
- Thread starter LittleSpeer
- Start date
Inflation goes through the roof as the government prints notes to pay its bills.
Ugh...
First of all, the Federal Reserve System issues currency, printed by the US Bureau of Engraving and Printing to private banks w/ interest. The interest revenues are remitted to the United States Treasury Department.
The income tax is entirely unrelated to how the Federal Reserve regulates the value of the US dollar, and in fact that Fed is a net money maker for the US Treasury, paying for all of its operations and then some through its open market operations and the prime interest rate.
They also cannot inflate the money supply at will, as the Federal Reserve Board of Governors is politically insulated, nor would it be in any government's long term interest to have needless inflation.
Finally, the Federal Reserve System has absolutely nothing to do with deficit spending or the national debt.
Whoever made the image literally had everything backwards. A return to currency issued by the US Treasury directly would just place monetary policy in a politically uncomfortable area. It wouldn't affect the income tax at all, and it would not mean no inflation or no national debt.
Quite the opposite, actually. It would mean turning monetary policy into a political issue, and given the number of veto pivots in the American system, that's disastrous. Can you imagine the havoc that would play out if the opposition party refused to allow the executive to issue more currency, and the damage the resulting deflation in the money supply would cause?
First of all, the Federal Reserve System issues currency, printed by the US Bureau of Engraving and Printing to private banks w/ interest. The interest revenues are remitted to the United States Treasury Department.
The income tax is entirely unrelated to how the Federal Reserve regulates the value of the US dollar, and in fact that Fed is a net money maker for the US Treasury, paying for all of its operations and then some through its open market operations and the prime interest rate.
They also cannot inflate the money supply at will, as the Federal Reserve Board of Governors is politically insulated, nor would it be in any government's long term interest to have needless inflation.
Finally, the Federal Reserve System has absolutely nothing to do with deficit spending or the national debt.
Whoever made the image literally had everything backwards. A return to currency issued by the US Treasury directly would just place monetary policy in a politically uncomfortable area. It wouldn't affect the income tax at all, and it would not mean no inflation or no national debt.
Quite the opposite, actually. It would mean turning monetary policy into a political issue, and given the number of veto pivots in the American system, that's disastrous. Can you imagine the havoc that would play out if the opposition party refused to allow the executive to issue more currency, and the damage the resulting deflation in the money supply would cause?