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Thread: House committee subpoenas Federal Reserve

  1. #31
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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by Ethereal View Post
    1. If a government institution is going to execute powers delegated to the Congress then it should be subject to some form of Congressional oversight.
    You do have a point here.

    Although, I would argue the point is not so much that the Federal Reserve System itself is unconstitutional but that Congress has delegated too much authority to it without proper Congressional oversight.

    Similar arguments have been raised about the constitutionality of TARP.

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    Re: House committee subpoenas Federal Reserve

    Oh but the Congress can set up anything it wants to and if they neglected to give it proper oversight then I guess we're just stuck with their mistake.

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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by celticlord View Post
    Although, I would argue the point is not so much that the Federal Reserve System itself is unconstitutional but that Congress has delegated too much authority to it without proper Congressional oversight.
    I would contend that any delegation of Congressional authority must be subject to some form of Congressional oversight. I would also contend that open-market operations and the dictation of interest rates to private businesses are authorities not delegated to the US government.

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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by Liz Peeps View Post
    According to you the federal government has the power to do whatever it wants.
    For the most part, subject to the limitations that obvious child mentioned.

    Quote Originally Posted by Liz Peeps View Post
    I picked it up where he was basically saying that the general welfare clause allows the federal government to set interest rates. If it can set interest rates it may as well be considered to do whatever it wants. When you have control of the money in your hands you control the whole system.

    Haha, it's very funny, YOUR ONE AND ONLY CONCESSION to the constitution is NASA, well aren't you just the ****ing heroic champion of Jeffersonian principles. Oh but the general welfare clause!
    Hamiltonian principles, thank you very much.

    Quote Originally Posted by Ethereal View Post
    Because none of the aforementioned organizations are the structural or methodological equivalent of the Federal Reserve. How can one determine the constitutionality of the Federal Reserve by asking whether or not the IRS or DoD is constitutional?

    1. If a government institution is going to execute powers delegated to the Congress then it should be subject to some form of Congressional oversight.
    Congress can do anything it wants to the fed, from investigating to closing it.

    So, you read the General Welfare Clause as some nebulous invitation for the Congress to spend and dictate however it pleases?
    With minor limitations. That's how it's been interpreted.
    People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by Ethereal View Post
    I would contend that any delegation of Congressional authority must be subject to some form of Congressional oversight.
    In theory, a very laudable stance. In application, it amounts to micromanagement and merely bloats government bureaucracy even further.

    I do agree that Congress has delegated too much authority to the Executive Branch, and is derelict in its Constitutional duty by not performing more oversight.

    Quote Originally Posted by Ethereal View Post
    I would also contend that open-market operations and the dictation of interest rates to private businesses are authorities not delegated to the US government.
    If the Federal Reserve and FOMC "dictated" interest rates to other institutions, you would have a point. However, the only rate the Federal Reserve sets explicitly is the discount rate at which it lends directly to banks to cover reserve requirements. It uses open market operations (buying and selling securities) to set a target federal funds rate, which is the interest rate banks charge when lending to another bank from their Federal Reserve account. The federal funds rate is generally set lower than the discount rate, and is approximately 300 basis points below the prime interest rate nominally charged by banks to their most creditworthy borrowers, but actually fluctuates in a range around the target rate set by the Federal Open Market Committee.

    Open market operations and setting interest rates to its own customers are normal activities of any bank, and the federal government's capacity to charter a bank has been deemed Constitutional since McCulloch v Maryland in 1819.

    Interestingly, there is an analogy to be drawn between the Second Bank of the United States (the focus of McCulloch) and the Federal Reserve.

    The concerns regarding the Fed's power and influence today stem largely from its willingness to facilitate government fiscal policy--Greenspan's loose money policies helped fuel politically expeditious economic bubbles, and Bernanke's magic printing press is funding the greatest expansion of deficit spending since World War II. The disturbing display of that facilitation is its arguably corrupt and corrosive involvement in the shotgun marriage between BofA and Merrill Lynch after the latter was overextended because of its derivatives.

    The McCulloch case was triggered by rampant corruption and lax banking practices at the Second Bank of the United States, producing a real estate bubble and subsequent crash in the Panic of 1819, and Maryland's attempt at restricting the Bank's activities by taxing bank notes of banks not chartered in Maryland.

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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by Liz Peeps View Post
    Oh but the Congress can set up anything it wants to and if they neglected to give it proper oversight then I guess we're just stuck with their mistake.
    Point taken. It is, at the end, a mistake. Let's not keep making it?

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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by RightinNYC View Post
    Congress is also given the authority to lay and collect taxes. Does that mean that the creation of the IRS to handle that process is unconstitutional?

    Congress is also given the authority to regulate commerce with the Indian tribes. Does that mean that the BIA is unconstitutional?

    Congress is also given the authority to regulate patents. Does that mean that the Patent Office is unconstitutional?

    Congress is also given the authority to make rules for the regulation of the military. Does that mean that the DoD is illegal?
    Much of the federal reserve is privately owned. Given its sway over our national policy I would say that the federal reserve runs counter to the principles at the core of our government, even if it isn't specifically unconstitutional

    **EDIT**
    From wikipedia

    Source [Wikipedia | Federal Reserve System: Independent within government]

    The Federal Reserve System is an independent government institution that has private aspects. The System is not a private organization and does not operate for the purpose of making a profit.[39] The stocks of the regional federal reserve banks are owned by the banks operating within that region and which are part of the system.[40] The System derives its authority and public purpose from the Federal Reserve Act passed by Congress in 1913. As an independent institution, the Federal Reserve System has the authority to act on its own without prior approval from Congress or the President.[41] The members of its Board of Governors are appointed for long, staggered terms, limiting the influence of day-to-day political considerations.[42] The Federal Reserve System's unique structure also provides internal checks and balances, ensuring that its decisions and operations are not dominated by any one part of the system.[42] It also generates revenue independently without need for Congressional funding. Congressional oversight and statutes, which can alter the Fed's responsibilities and control, allow the government to keep the Federal Reserve System in check. Since the System was designed to be independent whilst also remaining within the government of the United States, it is often said to be "independent within the government."[41] Thus, there has never been an audit of the System that was not kept a proprietary secret, not even made available to Congress in closed session, which has motivated almost 200 Congressmen to sponsor the Federal Reserve Transparency Act.
    Last edited by Kernel Sanders; 06-13-09 at 04:17 PM.

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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by RightinNYC View Post
    Are you going to deny that Congress could abolish the Fed tomorrow if it wished?
    No congress could not "abolish" it. Only we can and we will one day. We have to stop believing in the system. Congress does not *own* the FED, it is the other way around. The President begged the masses to believe in the system and our forefathers did very apprehensively after the 1930's. Well, to be honest - they had no freakin choice but to believe in it if they wanted their money back from the run on the banks.

    But that is history.

    This audit will serve many functions. First and foremost it should add transparency to the system and eventually (years from now) destroy the system because folks like you that have no clue - yet - soon will.
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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by vauge View Post
    No congress could not "abolish" it.
    How do you figure that? The Federal Reserve Act called for the Secretary of the Treasury, Secretary of Agriculture, and the Comptroller of the Currency to create the various Federal Reserve Districts, and mandated banks subscribe to the capital stock of the Federal Reserve Bank serving their particular district.

    All Congress need do is dissolve the districts and abolish the requirement of banks to invest in the stock of Federal Reserve Banks and the system would evaporate.

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    Re: House committee subpoenas Federal Reserve

    Quote Originally Posted by celticlord View Post
    How do you figure that? The Federal Reserve Act called for the Secretary of the Treasury, Secretary of Agriculture, and the Comptroller of the Currency to create the various Federal Reserve Districts, and mandated banks subscribe to the capital stock of the Federal Reserve Bank serving their particular district.

    All Congress need do is dissolve the districts and abolish the requirement of banks to invest in the stock of Federal Reserve Banks and the system would evaporate.
    Ever tried taking money from someone? Today Congress declares your money - worthless. Good day. You me and everyone in the globe would be a wee bit upset. Now, try to define *currency* to the common Joe. lol

    Congress won't do this until they are nailed to the wall. Until then, they literally cannot abolish it.
    If you analyse it, I believe the very heart and soul of conservatism is libertarianism. -Ronald Reagan

    I am also known as "vauge".

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