Most Americans Don’t Understand the Fed. Here’s Why It Matters | Jeffrey Tucker

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Most Americans don’t understand the Fed. Here’s why it matters, says Jeffrey Tucker:

The name itself is a misnomer.

“Federal” was meant to sound decentralized, in line with the 10th Amendment—not like a central bank, which Americans despised.

“Reserve” implied it actually held something in store—money set aside, just in case. But it didn’t.

In reality, from the start, the Fed was a central bank—a progressivist experiment in “scientific,” expert-driven monetary management. And it was obvious that it would be abused, Tucker says.

That became apparent during WWI, a war that Americans wanted nothing to with but somehow ended up joining anyway. Why?

Before the Fed, America stayed out of wars largely because it simply couldn’t afford them. The money wasn’t there, Jeffrey says.

“Well, now with the Fed, you have the money. You've got a printing press. You've got this weird power of this one institution to buy and hold government-created debt with money that didn't previously exist.

A check. The nation had a credit card with an infinite balance on it.

…What could go wrong?

…And so the Fed was probably the reason why the US entered the Great War.

…Lots of people argue for a constitutional amendment to balance the budget. A lot of people want their Congress to cut spending and so on.

But until you unplug the Fed's capacity to just print money and cover up for all the profligacy of Congress, we're never going to get there.

…The Fed provides a moral hazard that results in ever bigger government, ever more debt—forever.”"