Constitutionality of Delegating Authority to Independent Agencies (or: Calling BS on Zaku)

[zakubandit]

The point is the Fed is run by private banks, all the Fed investors are private banks. The Fed is independent of the government, but reports to the Senate.

Wikipedia: As an independent institution, the Federal Reserve System has the authority to act on its own without prior approval from Congress or the President.

So that right there says that the government in 1913 delegated powers over to the Fed. The gov does not have authority to delegate powers to agencies that are not directly under control of the government.
The member banks, that control the Fed, are private banks hold stock in the Fed. So in actuality the government gave complete control of our currency affairs to a group of private bankers with a group of appointed representatives to be the face of the Fed. They have the power to do whatever they want with our currency. Only the government, department of Treasury, has the authority to coin money, but the Fed was given authority to CONTROL money. Anyone get what I mean? PRIVATE bankers, government power given to them, not constitutional...anyone?

[KrazyHorse]

Yes Kuci, you can take a years pay and go by the GW Bridge.

Ask stupid questions get stupid answers.

He's only asking an idiotic question because you're an idiot (literally).

WHAT ARE YOU TRUSTING THE FEDERAL GOVERNMENT TO DO WHEN YOU ACCEPT THAT A DOLLAR BILL IS WORTH A DOLLAR?

In the case of an IOU, you are trusting that the issuer will exchange US currency for the IOU. To make the analogy that currency represents an IOU from the government, we have to accept that there is a promise to exchange that currency for something. WHAT WOULD THAT SOMETHING BE? What does the government owe me because I hold a federal reserve note?

[zakubandit]

Sorry to burst your bubble KH, I had enough of you crap. Congrats on being the first person I added to ignore. I give respect where respect is deserving, you don't deserve any respect because, well you're completely disrespectful. I can assume though that whatever you posted has something about I am dumb, or I am an idiot, or ****, or any other one of the plethora of names you like to use.

[Felch]

What the government is giving you is legal tender that they will accept for your tax burden. If dollars couldn't be used to pay taxes, they would be much less valued.

That's my guess anyways. I never cared enough to scholar the issue.

[KrazyHorse]

I called you an idiot, if you want to open this one up.



Anyhow, now that he's not going to be any more fun to talk to, here are the plausible lines of development we can follow:

1) The Federal Reserve has implicitly committed itself to aim for ~2-2.5% core CPI in each period (though it has avoided explicitly stating this). What other plausible measures could the Fed target? One could be a measurement of unit labour cost inflation. This would allow the US to take the damage from exogenous supply shocks as inflation rather than underutilized capacity; since the inflation is exogenous people would not get afraid that the Fed is on an accelerating inflationary curve. Another possible measure would be a price LEVEL target rather than a price GROWTH target. This way, if the Fed missed low one quarter people would know that there was going to be self-correcting action the next quarter to make up for it and vice versa. Would this smooth out inflationary expectations and outcomes?

2) What levers OTHER than the short rate should the Fed manipulate to reach its policy goals? I've heard a number of suggestions; commodities, equities, even antique furniture. As long as the thing being purchased is relatively liquid it shouldn't matter that much. Or should it?

3) The Fed, and most other OECD central banks, lean on only one part of the yield curve (short term rates), and only for one type of security (risk free). Should the Fed move to a model where they also attempt to control, say, other system variables? Like other points on the yield curve (buying and selling long-term treasuries), or the price of risk (buying and selling corporate paper)? They did this recently when they reached the lower bound on the short rate, but should it be a long term policy? We don't want the Fed to have TOO many levers, because then it becomes a central planner. But I think most reasonable people will agree that the Fed does important work when it smooths out the price of short-term credit. Why can't it do the same thing for the price of risk?

[KrazyHorse]

What the government is giving you is legal tender that they will accept for your tax burden. If dollars couldn't be used to pay taxes, they would be much less valued.

That's my guess anyways. I never cared enough to scholar the issue.

Felch, the fact that legal tender is legal tender is a bit of a tautology here. The government can't ask you to pay a debt denominated in dollars in coconuts. You have to pay in dollars. And currency IS dollars. Everything else that we think of as money (bank account balances, for example) are only money by the fact that they can be exchanged for currency (due to contract with a private party or with the government). You don't need an agreement with the government that your cash is good for paying tax bills because if they didn't accept cash as payment nobody would be able to pay, because no form of money available to the public does NOT depend on its convertibility to currency.

[Tuberski]

Zaku is right. The material that a dollar is made from is not worth a dollar.

KH is right. The ink that says it is worth a dollar makes it worth a dollar.

ACK!

[SlowwHand]

However, a dollar has relative worth, depending on where you are.

[KrazyHorse]

Zaku is right. The material that a dollar is made from is not worth a dollar.

KH is right. The ink that says it is worth a dollar makes it worth a dollar.

ACK!

You're wrong: that's not what zaku is claiming. Nobody would disagree with the fact that, taken as components, a dollar bill is not worth a dollar. But once it is made into a dollar bill, it is worth a dollar. That's not based on any sort of faith in the government or claim on the labour of the American people.

[Tuberski]

You're wrong: that's not what zaku is claiming. Nobody would disagree with the fact that, taken as components, a dollar bill is not worth a dollar. But once it is made into a dollar bill, it is worth a dollar. That's not based on any sort of faith in the government or claim on the labour of the American people.

Then why is a dollar worth a dollar?

ACK!

[SlowwHand]

A dollar is worth about 50 cents. That's what Yogi would say.

[zakubandit]

Well from what is written on the government pages a dollar is based on their faith solely. The worth of the dollar, as in the amount paid to purchase the dollar, is far less than the amount of the dollar itself, mere change. The reason dollars are honored are because of the property and assets of the people, hence other countries accept it because it is on the faith that the US government can up hold the credit for that dollar. A dollar cannot be worth itself. That is like trading a piece of bread for some water saying the bread will hold value forever because it is bread, while your getting water and all you have backing that is that 'the water is water, trust me.'

No matter how KH argues this, I am not wrong. Nor is he, he just isn't stating it exactly right.

[SlowwHand]

Look at the bright side. Your post count is going up.

[Kuciwalker]

Yes Kuci, you can take a years pay and go by the GW Bridge.

Ask stupid questions get stupid answers.

[Kuciwalker]

Then why is a dollar worth a dollar?

ACK!

For the same reason that an apple is worth an apple.