What system would you replace the Federal Reserve with if you had complete control of the United States?

[Unarmed Gunman]

Dogecoin, because if we're going to have money based on nothing it might as well be more memeworthy.

 

[Zbk3VmLfujjzjxBd43tL]

The problem with the Federal Reserve is that it's a private organization and an arm of the banks when it should be entirely controlled by the American people. And because it's an arm of the banks, it gets to help them do stupid shit.

Gold standards don't work because it leads to deflationary crises like the original Great Depression that lasted almost 20 years in the late 19th century (today it's called the "Long Depression"). That depression absolutely fucked over a lot of people and was a major factor in ending the British Empire's dominance and beginning the shift to NYC.

 

[Curzon Dax-sama]

War Communism for five years to weed out the parasite class and then the gold standard.

 

[Overly Serious]

The basic problem is that all debt is denominated in nominal terms, and debt notes are bank's capital. When banks have to write down too much bad debt, they go insolvent, can't pay off depositors, and shut down.

Can an argument not be made that we need more pressure on banks not to issue dubious loans, not less? The sub-prime mortgage crisis and the USA's propensity to solve all its problems by printing money seem so. You write later about the rapid boom/bust cycle of America's golden years but it didn't seem to hold back the country's meteoric industrialisation; and a series of small shocks are arguably far easier to manage than the long kicking of the can down the road followed by near catastrophic collapse.

Personally, I think the Orks of Warhammer 40K have the perfect economic system. They use "teef". Because orks grow them naturally there is an inherent supply that scales with the population, the degrade natually over time which creates the incentive to spend rather than hoard thus stimulating economic activity and wealth distribution is inherently meritocratic as the biggest orks can knock the teef out of the weaker ones - thus strengthening ork society.

 

[The Ugly One]

Can an argument not be made that we need more pressure on banks not to issue dubious loans, not less?

All loans have a risk of default. And in a deflationary environment, default risk skyrockets. One way to lower default risk is to not allow deflation to happen.

You write later about the rapid boom/bust cycle of America's golden years but it didn't seem to hold back the country's meteoric industrialisation;

Yes, but a lot of individuals lost 100% of their savings along the way. That's why the political pressure to do something existed in the first place. Too many ordinary people got completely wiped out during 19th c bank runs.