Do Calls to “Abolish the Fed” Actually Make Sense?
H.R. 8421, a bill before the House of Representatives, seeks to abolish the Federal Reserve. It’s not the first anti-Fed legislation and it seems unlikely to be the last. Argentine President Javier Milei vows to abolish Argentina’s central bank, calling it “non-negotiable.”
Argentines have dealt with nosebleed inflation, but abolishing the Fed is considered a fringe view in the US.
But does it make sense? Economics is a social science, so nobody can answer authoritatively, but across from the Federal Reserve’s flagship office in Washington, DC, I shared my thoughts with analyst Shaoping Huang, who’d been doing some research on why and how the Fed was created (hint: to avoid the US’ trend of a financial catastrophe happening every 20 years or so, which had been the case pre-Fed).
In our chat – more candid conversation than presented video – we discuss what the Fed does and why the anti-Fed crowd gets concerned. And while I understand at least some of the worries of those seeking abolishment, I can’t personally see how doing away with a key institution underpinning the world’s largest economy gets us there.
Click here or on the image below to watch.
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