Fixing the Federal Reserve | Richard W. Rahn | Cato Institute: Commentary

Fixing the Federal Reserve | Richard W. Rahn | Cato Institute: Commentary: 'The Fed was established to provide price stability and prevent periodic banking crises. It has accomplished neither.

The wholesale price level in the United States was at almost the same level when the Fed was established in 1913 as it was in 1793, 120 years earlier. Now it takes about 22 dollars to equal the 1913 dollar. There have been far more bank failures post-Fed than pre-Fed, and we seem to be in an almost permanent state of banking crises with “too big to fail.”'

'the monetary situation could be greatly improved if: (1) The Fed were charged only with maintaining the value of the currency and nothing else; (2) others were given the right to compete with the Fed in creating money (again, provided they do not claim it is legal tender); and finally, (3) the capital gains tax were removed from commodity transactions.'