Getting rid of the Federal reserve bank would solve americas problem - Essay Example

Some Republican presidential aspirants have demonstrated open rejection of the Federal Reserve System. They have sited the US economic crisis as turmoil that emanated from poor policies guiding the Federal Reserve. These politicians seem to use arguments floated by some economists who believe that the Federal Reserve System is a burden to the American people (Meltzer 199). Ideally, presidential politics does not only shape the future of Americans, but also influence the global economic balances.

US economy is a central factor in US politics because it influences the taxation programs, international relation, domestic social welfare, and the satisfaction of basic human needs by the American citizens. The US politics in the global scale depend on its economic power. Thus, politics concerning the US economy does not only influence the lives of US citizens, but also the conditions of life in other countries (Wells 2). For instance, the US economic crisis reverberated to international scale shaking the global economy.

The concern of the US political aspirant is to restore faith to the public. Banking regulations influence the flow of currency, which subsequently affect money market. These restrictions influenced banking system in US in early 1900s leading to the creation of the Federal Reserve System in 1913 (Wells 2). The system came into operation in 1914 November. The intention of the Federal Reserve Act was to create an alternative source of bank and currency reserve, which could control panics when money supply in the market increased because of the need to expand business.

History records that during the great depression, Federal Reserve failed to discharge its duty. About 9000 banking institutions collapse during that great period (Wells 3). Changes that Fed has developed over time in response to economic challenges has made many observers to believe that, Fed has on