· The Federal Reserve oard is an integral part of the Federal Reserve System of the United States, and it creates and maintains much of the monitorial policy of the nation. The board members are responsible for the monetary health and security of the country, and so shoulder a huge responsibility to the country and to the people · The Federal Reserve System Essay Words | 10 Pages. The Federal Reserve System Even before the creation of the Federal Reserve, banks were used by the public just as we use them today. Deposits were made into savings accounts. Loans were Essay on THE FEDERAL RESERVE: ROOT OF ALL EVILS. The U.S. Federal Reserve activities cause many questions in the American public since the crisis, when it was charged that its policies has led to financial collapse. In , the issue of the Federal Reserve is once again at the forefront of public interest in the U.S., primarily because this structure is under constant criticism of Congressman Ron
Federal Reserve Board - Essay
The U. Federal Reserve activities cause many questions in the American public since the crisis, when it was charged that its policies has led to financial collapse, federal reserve essay. Inthe issue of the Federal Reserve is once again at the forefront of public interest in the U.
Paul represents the libertarian wing of the Republican Party and has influence on over a third of its voters. The primary goal of the Fed is to maintain the monetary and financial stability federal reserve essay the US. However, federal reserve essay, the recent economic recession reveals the full extent to which the monetary policy of the Fed turn out to be ineffective.
More important, the Fed failed to prevent the rise of the economic recession in the US inwhile the further policy of the Fed after the recession has broken down proved to be absolutely ineffective, if not to say, dangerous for the US economy because they created conditions for the further steep decline of the US economy.
To put it more precisely, federal reserve essay, the Fed policies failed to prevent the recession but after the outbreak of the economic crisis, the Fed focused on the support of large banks.
In such a way, the Fed prevented their federal reserve essay but it also failed to help the US economy to recover, while the support of large banks has prolonged federal reserve essay stagnation of large banks and the US economy.
In such a situation, the Fed should refuse from the support of large banks and focus on the stimulation of the rise of spending in the US, instead of support of large banks that consumed a considerable part of the public funds but was absolutely pointless to help the US economy to recover.
In fact, many specialists Monetary Policy Report to the Congress, 8 argue that the Fed conducted and still conducts effective policies. They argue that the Fed regulated the monetary policy effectively and the economic recession has started because of the unpredictable crisis in the housing market that provoked the financial crisis that was followed by the outbreak of a large scale recession. In such a situation, the Fed performed its functions properly because it focused on the regulation of the monetary policy and minimized its interference in the US economy.
However, the economic recession has started, regardless of policies of the Fed, which a priori is supposed to protect the US economy from deep crises by means of monetary and financial regulations.
The economic recession provoked a bunch of problems, including the steep decline of the housing market, the deep financial crisis, the overall decline of many industries and economy at large. Taking into consideration all of the current problems the US economy has faced, the Federal Reserve has undertaken several steps to prevent the further deterioration in the national economy and revive economic activities in the USA.
Firstly, the Federal Reserve has lowered the federal funds rate basis points. Secondly, to support the functioning of commercial paper market in the aftermath of the Lehman Brothers bankruptcy, the Federal Federal reserve essay established the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility and the Commercial Paper Funding Facility and Money Market Investor Funding Facility. Thirdly, to support the mortgage and housing market and the economy, the Federal Reserve announced programs to purchase agency-guaranteed mortgage-backed securities and agency debt.
Fourthly, federal reserve essay, the Treasury announced a temporary guarantee of the share prices of money market mutual funds and used authority granted under the Emergency Economic Stabilization Act to purchase preferred shares in large number depository institutions Monetary Policy Report to the Congress, In such a way, the Federal Reserve developed policies to support the banking system of the USA, which can revive the national economy.
However, there are many critics of the Fed, such as Ron Paul, who criticizes the Federal Reserve System FED because of unfair practices, which bring harm to the economy and millions of ordinary Americans, federal reserve essay. Thus, he has three main claims to the Federal Reserve:. In this regard, Ron Paul federal reserve essay put the Fed under the control of Congress, because under the Constitution the legislative branch has the exclusive right to conduct inspections and investigations in particularly important cases, federal reserve essay.
And what could be more important than financial stability of the whole country. The Federal Reserve has always resisted such an audit throughout its history.
According to the Federal Reserve Act ofthe actions of FED may be limited by laws adopted by Congress, but otherwise acts as an independent shareholder structure.
It is necessary to note that such a position of FED often gives rise to theories about the private Central Bank of the United States. As for the President, he has the authority to approve or not approve the Chairman of the Board of Directors of the Federal Reserve, however, federal reserve essay, director is elected by the internal vote of the Council.
Formally audit of the FED may hold Governmental Accountability Office GAOwhich is a state audit commission and is a part of the legislative branch, but its effectiveness in spite of the extensive self-promotion, is highly questionable. For example, in GAO presented federal reserve essay Financial Report of the Government of the United States and a press release, stating that the Commission could not give its assessment of the consolidated balance sheet of the Federal reserve essay Government because of the weak control over the vast material, a significant number of inaccuracies and due to other constraints.
The Federal Reserve according to the official statement has been operating as an independent agency within the government. That basically means that this institution is de facto a separate branch of government. However, even these solutions such as bill HRfederal reserve essay, which in particular removes restrictions of GAO in auditing the Federal Reserve met strong resistance from the monetary authorities, and as a result President Obama spoke out against it.
Opponents of such legislative initiatives say that it was not for the good of the American economy, but simple populism. Romm So, what we are dealing with: a violation of the Constitution, as says Ron Paul, or violence against the free market or the obvious need for an independent central bank, federal reserve essay, free from the dictates of populist politicians? There are two important questions that follow the critique of Ron Paul and his supporters: can the Federal Reserve be blamed for the financial crisis?
Is it effective enough to prevent crisis or at least mitigate the crisis? Finally, we pose the question more broadly: does the existence of such a powerful structure as the Federal Reserve comply with conditions of economic freedom?
Central banks were established primarily to maintain the stability of the private banking system. The Federal reserve essay was created in the early XX century, after the U. experienced several economic downturns caused by federal reserve essay collapse of banks.
The Fed is really the only institution in the United States free from politics. In my opinion, it is generally the most successful institution in federal reserve essay United States, precisely because it is completely free from politics. If not actions of the Fed, federal reserve essay, the economic crisis for the U. With the position of Goertler disagreed Alan Reynolds, federal reserve essay, former head of the Directorate for Economic Research at the Hudson Institute.
It became obvious at the time of crisis when the U. That is, federal reserve essay, the Fed has recently acted primarily in the interests of major U.
In a moment of crisis the Fed was completely unable to independently regulate the work of these institutions, although it is the purpose of the Fed. The real cause of the problems with the Fed is not the very existence of such an agency, but the fact that the Fed has become hostage to the interests of the oligarchic banking system — that the problem facing the U.
today, and this issue that has not been solved yet, federal reserve essay. The problem is that the Federal Reserve System has become a multi-functional agency. But if the Fed has focused on domestic politics, federal reserve essay, it just might be more likely to prevent systemic crises, federal reserve essay. However, it proves beyond a doubt that such regulation and monetary policies conducted by the Federal Reserve are very complicated and cannot always be applied effectively.
In this respect, it is possible to refer to the recent mortgage crisis, which was followed up by a profound economic recession and a considerable drop federal reserve essay the GDP. In fact, it is obvious that the Federal Reserve has failed to prevent the crisis and the overheating of the national economy resulted in the current economic crisis.
In such a situation, the current polices of the Federal Reserve aim at the revival of the national economy through the monetary policies. In this respect, one of the main directions in the current policies of the Federal Reserve is the restriction of the inflation, which started to grow substantially inbut, by the end of the year, the Federal reserve essay Reserve has managed to decrease the inflation rate, which was negative in the last quarter of federal reserve essay year Monetary Policy Report to the Congress, In addition, the Federal Reserve attempts to maintain federal reserve essay banking system of the USA because many leading banks of the country federal reserve essay faced serious financial problems and suffered from problems concerning liquidity.
Moreover, some banks have already run bankrupt. In such a situation, the Federal Reserve attempts to support banks and stimulate them start lending money extensively to stimulate economic activities in the USA.
In fact, the Fed has failed to prevent the economic recession because it has failed to stop speculations in the housing market before the economic recession. After the recession, the Fed focused on the support of large banks which were definitely sinking down.
Obviously, such support is a provisional measure that will help large banks to survive for a while but this measure will not improve their performance, while the threat of their bankruptcy persists.
Hence, the Fed just prolongs the economic stagnation. During the history of the FED, federal reserve essay, there were only two periods when it was able to achieve both stable growth and low inflation.
It was in the years when there was a gold standard, and from towhen it followed the so-called Taylor rule. But if we speak about the current crisis, the Fed contributed to federal reserve essay, as it kept interest rates too low for too long and federal reserve essay financed the growth of unsecured loans.
The main mistake of the Federal Reserve System is that it has no long-term plans, federal reserve essay is paid mainly to what happens in a very short period of time.
The leaders of the Federal Reserve never ask such important questions: if we do it today, federal reserve essay, what would be the situation in a year? What will happen federal reserve essay two years, three? The Fed failed to prevent speculations before the federal reserve essay and the Fed has done nothing to prevent speculations in the future. Therefore, the threat of the new wave of the economic recession persists. Custom papers you get from our writing experts should be used for research purposes only.
These papers are not supposed to be submitted for academic credit. Essay on THE FEDERAL RESERVE: ROOT OF ALL EVILS. FED POLICIES AND THEIR BENEFITS In fact, many specialists Monetary Policy Report to the Congress, 8 argue that the Fed conducted and still conducts effective policies. CRITICISM OF THE FEDERAL RESERVE SYSTEM However, there are many critics of the Fed, such as Ron Paul, who criticizes the Federal Reserve System FED because of unfair practices, which bring harm to the economy and millions of ordinary Americans.
Romm So, what we are dealing with: a violation of the Constitution, as says Ron Paul, federal reserve essay, or violence against the free market or the obvious need for an independent central bank, free from the dictates of populist politicians? com With the position of Goertler disagreed Alan Reynolds, former head of the Directorate for Economic Research at the Hudson Institute.
com That is, the Fed has recently acted primarily in the interests of major U. FEDERAL RESERVE SYSTEM AND THE CURRENT ECONOMIC CRISIS During the history of the FED, there were only two periods when it was able to achieve both stable growth and low inflation.
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What Is The Federal Reserve? Kal Penn Explains - Mashable
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· Goals and objectives of the Federal Reserve 1. In two or more sentences, describe the goals and objectives of the Federal Reserve? 2. Does the Federal Reserve or the federal government set interest rates for our country? 3. What are the three (3) monetary policy tools used by the Federal Reserve? Essay on THE FEDERAL RESERVE: ROOT OF ALL EVILS. The U.S. Federal Reserve activities cause many questions in the American public since the crisis, when it was charged that its policies has led to financial collapse. In , the issue of the Federal Reserve is once again at the forefront of public interest in the U.S., primarily because this structure is under constant criticism of Congressman Ron · Used at least one example in the essay. Organization Grading Guidelines: Presentation is very effective and presented in a logical format with a clear Federal Reserve After reading all the available information carefully, prepare a two page (double-spaced) essay
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