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1/ When it comes to issuing currency the Federal Reserve is clearly a creature of Congress. They can inflict a lot of damage bc Congress allows them to do too much & looks the other way as they do – & won’t provide or protect despite their immense powers. https://www.federalreserve.gov/faqs/money_12848.htm
2a/ This tweet
is the beginning of a long conversation debating the Fed’s independence. In it, two legal scholars, @rohangrey & @rch371 (assisted by @katiecannon2), make it clear that as it relates to issuing currency, the Fed is a creature of Congress. https://twitter.com/katiecannon2/status/1163423111632629766?s=20
is the beginning of a long conversation debating the Fed’s independence. In it, two legal scholars, @rohangrey & @rch371 (assisted by @katiecannon2), make it clear that as it relates to issuing currency, the Fed is a creature of Congress. https://twitter.com/katiecannon2/status/1163423111632629766?s=20
2b/ “Courts have repeatedly held the federal reserve system is a non appropriated fund instrumentality of the US government.” https://twitter.com/rohangrey/status/1163796085980241920?s=20
2c/ "the regional banks are also instrumentalities" of the government. https://twitter.com/rohangrey/status/1163798210030297088?s=20
2d/ The question matters 1/2. https://twitter.com/rch371/status/1163805361780006913?s=20
2e/ The question matters 2/2. https://twitter.com/rohangrey/status/1163817811560431617?s=20
3/ More on the misconceptions regarding the Federal Reserve by economist Randy Wray. https://rooseveltinstitute.org/interview-randall-wray-truths-and-myths-federal-reserve/
4/ More from the courts regarding how the Federal Reserve is an arm of the federal government. https://twitter.com/stf18/status/1214257600096813056?s=21
5/ Economist Randy Wray: The Greatest Myth Propagated About The FED: Central Bank Independence (Part 1). http://neweconomicperspectives.org/2014/01/greatest-myth-propagated-fed-central-bank-independence-part-1.html
6/ Economist Randy Wray: The Greatest Myth Propagated About The FED: Central Bank Independence (Part 2). http://neweconomicperspectives.org/2014/01/greatest-myth-propagated-fed-central-bank-independence-part-2.html
7/ When it comes to issuing the currency, the Federal Reserve is clearly a creature of Congress. The Fed only creates money (issues currency via computer keystrokes) when it is already part of their Congressional mandate, or a new law is passed by Congress.
8/ Regarding the former: The Fed creates new bank reserves, often in massive amounts, that are used exclusively for asset swaps (even trades) with banks and other institutions. This in order to fulfill its mandate of "maintaining the stability of the banking system."
9/ Regarding the latter, the Fed creates new money that ultimately makes it into the hands of individual Americans, via the Treasury. This is always in service of a new law, as written and passed by Congress, and signed by the President. The mechanics: https://twitter.com/MMTResources/status/1253341681342050312?s=20
10/ The just-above tutorial was inspired by this presentation I gave to Graham Elwood in May 2020. The presentation gives an introduction to the #MMT view of the Federal Reserve's role in issuing currency. https://twitter.com/ActivistMMT/status/1262515618626121728
11/ The Federal Reserve is an independent agency only in the sense that Congress allows is to do too much and looks the other way while they do so. This is exacerbated by the fact that many representatives are corrupt and fully bought by elite backers.
12/ The Fed is independent, even if Congress doesn’t treat them that way. From the 2012 paper “Modern Money Theory: A Response to Critics” (page 3) by economists Scott Fullwiler ( @stf18), @StephanieKelton, and L. Randall Wray ( http://ssrn.com/abstract=2008542)
13/ Nothing changes the fact, however, that Congress created the Fed with an Act (the 1913 Federal Reserve Act). An Act does not override the Constitution. Congress could therefore change or eliminate the Fed with another Act, at any time.
14/ Image by @DeficitOwls. Quote referred to (and referenced) in this article by L. Randall Wray: https://neweconomicperspectives.org/2014/01/greatest-myth-propagated-fed-central-bank-independence-part-1.html
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![14/ Image by @DeficitOwls. Quote referred to (and referenced) in this article by L. Randall Wray: https://neweconomicperspectives.org/2014/01/greatest-myth-propagated-fed-central-bank-independence-part-1.html[END EVIDENCE. START OPINION]](https://pbs.twimg.com/media/EY6AuGoWsAEXZSm.jpg "14/ Image by @DeficitOwls. Quote referred to (and referenced) in this article by L. Randall Wray: https://neweconomicperspectives.org/2014/01/greatest-myth-propagated-fed-central-bank-independence-part-1.html[END EVIDENCE. START OPINION]")
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15/ If Congress has the votes to pass [some program], then they also have the votes to (a) reign in the Fed and then (b) pass [that program]. If the Fed ever tried to stop Congress in this scenario (where they already had the votes), Congress would undoubtedly win.
16/ If you have a problem with the Federal Reserve, then you should also have a problem with Congress who chooses to:
- allow the Fed to do too much and looks the other way while they do it.
- not help the people directly despite their absolutely immense powers.
- allow the Fed to do too much and looks the other way while they do it.
- not help the people directly despite their absolutely immense powers.
17/ You should also have a problem with the Supreme Court for leaving critical legal questions about the Fed’s very nature, unresolved for more than 100 years.
18/ Probably most of all, you should have a problem with the elite who’ve used their effectively-infinite wealth and power, to disintegrate the cores of all these institutions. The very fabric of our society – and our ability to exist as an organized species – is badly damaged.
19/ Finally, you should also have a problem with us. We have fallen asleep for decades, now hoping desperately for a savior – so we can go back to sleep. Instead of getting involved, asking questions, and demanding better, we complain about and fight each other.
20/20 To #LearnMMT in general, here is a good place to start. https://twitter.com/MMTResources/status/1251199513324400642?s=21
This thread has been updated, and also contains some minor corrections. Here: https://twitter.com/MMTResources/status/1266090394934292481?s=20
