Federal Reserve System was given great power in 1913 to undertake beneficial actions. Did it give great power to engage in harmful actions?
My economics teacher ask me this in class the other day, I really didn't know how to answer this. His answer was vague and i couldn't really understand. clarity on this subject would really be great.
- OiyLv 57 months ago
You mean the FED has been given the power to carry out the monetary policy independently, in contrast to the fiscal policy which is done by the administration. Yes, it can go wrong. For example, in the 1930 great depression, It has carried out the tight money policy which had prolonged the crisis for more than 7 years. In 2008 depression, it had done the opposite. QE had the effects within a year. Yes, it did give the power to engage in harmful actions to make America great again. And the actions have affected the whole world.