The Bottom Line
Congressman Ron Paul makes a compelling argument for abolishing the Federal Reserve. Paul's knowledge of economics, especially economic history, is impressive. Unfortunately, he ignores the impact of fiscal policy and the deregulated financial industry. Ending the Fed will not achieve what Paul says it will: the end of business cycles, inflation and recessions.
Pros
- Easy to read and understand. Clearly written without a lot of intimidating terms.
- Explains why war is never good for the economy.
- Provides a good history lesson of the founding of the Fed and early American economy.
- Explains the destructive effect of inflation.
Cons
- Ending the Fed would not eliminate inflation and goverment overspending, which is fiscal policy.
- Ignores the role of derivatives in creating current recession.
- Doesn't address AIG and bankers' misuse of depositors' funds.
- Deficit spending also caused declining dollar.
- Allowing banking system to fail would cause untold losses to most U.S. citizens.
Description
- Chapter One. Why You Should Care.
Chapter Two. The Origin and Nature of the Fed.
- Chapter Three. My Intellectual Influences.
Chapter Four. Central Banks and War.
- Chapter Five. The Gold Commission.
Chapter Six. Conversations With Greenspan.
- Chapter Seven. Conversations With Bernanke.
Chapter Eight. Congress' Interest in Monetary Policy.
- Chapter Nine. The Current Mess.
Chapter Ten. Why End the Fed?
- Chapter Eleven. The Philosophical Case.
Chapter Twelve. The Constitutional Case.
- Chapter Thirteen. The Economic Case.
Chapter Fourteen. The Libertarian Case.
- Chapter Fifteen. The Way Out.
Guide Review - End the Fed
However, ending the Federal Reserve would not end these problems. Congressman Paul does not address how fiscal policy also contributes to inflation and a declining dollar by running budget deficits year after year. The current economic crisis was caused by a great number of complicated factors.
- The Fed, alone, did not create it.
- The Fed did not cause the $13 trillion debt.
- The Fed did not cause AIG to use insurance deposits to create credit default swaps.
- The Fed had nothing to do with the lack of regulation on derivatives and hedge funds.
Therefore, if the Fed were abolished, these things would continue. Business cycles, inflation, and recession would still exist, perhaps more severe than today. That's because there would be one less balance and check on the economy.
As Congressman Paul says, "Everyone should have an intense interest in what money is and how it's manipulated by the few at the expense of the many." The income inequality in this country proves that is true. But ending the Fed would not stop that. The resultant economic turmoil might even make things worse.
