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Sep 19 10 tweets 16 min read Read on X
An argument on the Doctrine of Monetized Speech and the Necessity for Its Reversal

Preface:

I hope many of you enjoy reading these long-form articles and treatises, which explore how I believe we can address many of the failings we see in our government and in the way this country is governed. One of these critical issues is that money equals free speech. This doctrine, introduced in the Buckley v. Valejo decision of 1976, in my opinion, started a chain of catastrophic and expanding events by which domestic and outside powerful forces have shaped our way of life.

Money equals free speech. Think about it for a second. The money of the poor and wealthy is equivalent to free speech, but what distinguishes them? The money of the poor is limited, while the money of the wealthy is not. Imagine a billionaire buying all of the billboards in a city or even a state to put their speech up on whatever topic or issue they want you to see, while all you can do is print out flyers and hang them up on lamp posts. See the difference?

The amplification of a billionaires speech drowns out even the voices of a large number of people. This isn't the speech our founders envisioned, nor should this country allow. Not just as citizens, but as voters. Since 1976, this country has allowed massive amounts of money to shape the way it thinks, talks, and comports itself, through Superpacs, dark money, foreign donations, and lobbying. This has become a monumental problem.

I'm a 1A absolutist. I believe the marketplace of ideas should be front and center to who we are as a people, that society and the market should make determinations of what is allowable speech, even if it's hateful, wrong, or inopportune. The marketplace of ideas will determine which of these things is appropraiate for our society and how it wants to shape its communication. Not all ideas are good ones. We know this, but powerful forces are spending untold billions of dollars worldwide to influence our thoughts while we as mere citizens get drowned out in the process.

But speech shouldn't be bought, sold, and commoditized, and that's what we are enduring right now as a country and as a society. I say it must stop. That is why I'm writing this doctrine to eliminate the notion that money equals free speech and to outline what it will take. Additionally, what the potential benefits of reverting to a system where this no longer occurs will be.

You've read my articles on the pros and cons of abolishing the Fed and what that looks like. You've read my articles on why the Fed should be abolished and what it should be replaced with to further the financial and economic aims of the country and return it to a more constitutional framework. This article now aligns with the evolution that further expands the freedoms and liberties of citizens, aligning with the principles outlined in these other articles. There will be more.

With that, I will leave it to you to decide if this is the right path to go in or not. If you believe your 1A rights would be better served by not being bought and paid for, and never being heard, please spread this far and wide. Many of you who follow and have listened to me on spaces have heard me say this. It's time this country abandoned equating money with speech. It has hurt us deeply, and it needs to stop.

I want to thank the founders for their fight in allowing me to express these ideas and beliefs under the First Amendment. I don't have to worry about being censored, arrested, or suppressed. These are my ideas, and I get to share them with you.

As always, I’m not infallible. I put a lot of effort into researching and developing these articles into meaningful and substantive informational packets so that you can read, process, and digest what is being said.

However, I make mistakes, and I want to learn from them, understanding where those mistakes are, so they aren’t made again. Through your reading of my vision, I become better. So, without further ado, please enjoy my work. If you like it, consider sharing it with a quote repost, follow, or a simple like. Be well, and thank you for your time to read this.
Introduction

This argument contends that the SCOTUS campaign finance jurisprudence, which equates large-scale financial expenditures with protected speech, is a grave constitutional error rooted in an antiquated and simplistic understanding of the First Amendment.

The doctrines from Buckley v. Valeo and Citizens United v. FEC have established a legal framework that prioritizes a narrow, libertarian conception of "negative liberty" or freedom from restraint, while actively undermining the "positive liberty" or the capacity to participate meaningfully of the vast majority of citizens.

supreme.justia.com/cases/federal/… - Buckley

supreme.justia.com/cases/federal/… - Citizens United

This has created a failed marketplace of ideas, fostered systemic corruption now amplified by modern technology, and placed the First Amendment in an irreconcilable conflict with the Constitution's guarantee of a republican form of government. For the SCOTUS to maintain its legitimacy and for the Republic to thrive, this doctrinally flawed and empirically damaging precedent must be overturned.
I. The Foundational Doctrinal Error: Negative Liberty vs. The Capacity for Self-Governance

The central flaw in the SCOTUS's reasoning in Buckley v. Valeo and Citizens United v. FEC is its myopic focus on negative liberty, the right of a speaker to be free from government interference. In this view, so long as the government does not censor a message, the First Amendment’s work is done.

This ignores the vital concept of positive liberty, which is the actual capacity of an individual to exercise their rights and participate in the project of self-governance. A right that cannot be meaningfully exercised is a hollow promise.

By ruling that the wealthy individual or corporation has an almost unassailable negative liberty to spend unlimited sums, the SCOTUS has actively destroyed the positive liberty/freedom of the average citizen to be heard. The practical effect of this doctrine is not a vibrant public square, but an auction house where the highest bidders set the terms of debate.

The First Amendment was not intended to create a right to purchase a political outcome. It was intended to protect the conscience and expression of human beings, ensuring their capacity to persuade their fellow citizens and hold their government accountable. When the financial speech of a few can systematically drown out the actual speech of the many, the liberty of the entire political community is diminished.

The SCOTUS duty was not merely to protect speakers from censorship, but to preserve the structural conditions necessary for a functioning deliberative democracy. In these actions, they failed and failed miserably, and it must be corrected. We need to return to a paradigm where no single person or a select few dominate the discussion on spending.
III. A Precedent Rendered Obsolete by Technology and Incompatible with Constitutional Structure

The legal fiction at the heart of Citizens United is that independent expenditures do not corrupt because they are not coordinated with a candidate, a notion that was tenuous in 2010. Today, in an era of big data, micro-targeting, and algorithmically-driven social media, it is a transparent absurdity.

Super PACs and campaigns can achieve a state of functional coordination through the use of shared digital advertising vendors, sophisticated data modeling, and public messaging, all without violating the letter of the law. The rise of disinformation-as-a-service and targeted digital suppression tactics, as documented by institutions like the Brennan Center for Justice, has made the potential for corrosive influence far greater than the Court contemplated.

brennancenter.org/our-work/resea…

This unworkable standard props up a system that is fundamentally at odds with the Constitution's structure. The Guarantee Clause in Article IV, Section 4, which ensures a "Republican Form of Government," is not a mere suggestion; it is a structural mandate. A republic requires that representatives be dependent on the people alone. A system where representatives are functionally dependent/reliant on a small class of funders for their political survival is an oligarchy in republican guise. The SCOTUS's jurisprudence became the primary legal impediment to securing the republican form of government that the Constitution demands.

constitution.congress.gov/browse/article…

What the court did was wrong, is wrong, and it's manifested itself in what we see today. The halls of representation are replete with lobbyists writing massive checks to secure preferential treatment, being heard first and loudest, and shutting out singular voices of citizens who wish to redress grievances, but will not get heard because the price of admission has become too high.

This is not what the founders intended or saw as an impediment for citizens to have equal yet powerful voices to matter in their daily affairs. Money equals speech means that in order to be heard, you must pay a toll to be seen.
III. The Empirical Record: Market Failure in the Marketplace of Ideas

The well-known metaphor of a "marketplace of ideas" is the primary justification for the SCOTUS's hands-off approach. However, any student of economics knows that for a market to function efficiently and produce the best outcomes, certain conditions must be met. When these conditions fail, the market fails. The political arena created by Citizens United is a textbook example of a failed market, characterized by:

1. Monopolistic Practices: Unlimited spending allows for the creation of epistemic monopolies. A single billionaire or corporation can purchase near-total dominance of the informational landscape on a key issue or in a specific election, crowding out all competing ideas not through superior logic, but through overwhelming volume.

2. Negative Externalities: The product being sold, often a deceptive attack ad or a policy that benefits a narrow interest, imposes massive costs or externalities on the public that the speaker does not bear. For example, a successful multi-million-dollar campaign to block fossil fuel industry legislation benefits the environment/climate change industry. Still, the costs of increased power generation through expensive new technologies subsidized by government and/or tax dollars are borne by society as a whole.

3. Information Asymmetry: Dark and foreign money creates profound information asymmetry. An anonymous funder can launch a sophisticated campaign to influence voters, who have no way of knowing the speaker's identity or agenda, making it impossible for them to properly weigh the credibility of the message. This creates an environment ripe for deception, as detailed by watchdog groups like OpenSecrets, which tracks the flow of undisclosed/non-disclosed spending.

opensecrets.org/dark-money/bas…

This is not a functioning marketplace that elevates truth; instead, it is a distorted and failed market that elevates wealth, obscures accountability, and imposes its costs on the public.
IV. Reclaiming the First Amendment’s Deliberative Purpose

Overturning these precedents would restore the First Amendment to its proper role as a guarantor of deliberative democracy and representative government. The purpose of free speech in a self-governing republic is not merely self-expression; it is the collective process of reason-giving and debate through which citizens form public opinion and guide the state without having to worry if that speech is bought and paid for or if there is a price to pay to even say it and be heard by their respective representatives.

This requires a legal framework that balances the negative liberty of the speaker with the positive liberty of the community to engage in a meaningful dialogue. Content-neutral regulations on the scale, source, and transparency of campaign spending do not silence ideas. They are structural rules designed to facilitate a better conversation.

They ensure that the quality of an idea, not the wealth of its proponent, is the ultimate measure of its value. By re-adopting this view, the SCOTUS would align the First Amendment with its republican purpose, fostering a public square where more voices can be heard and a more genuine deliberation can take place.
V. The Restorative Benefits of Doctrinal Correction

Correcting this deep doctrinal error would yield profound and immediate benefits to the health and stability of the Republic. So, how would we, as citizens and the SCOTUS, go about reestablishing the idea that money should never equal free speech again?

1. Restoration of Public Trust: A system in which moneyed interests do not perpetually drown out the voices of citizens would directly combat the corrosive cynicism that has led to a historic decline in public trust, a trend meticulously documented by the Pew Research Center. A government perceived as fair is a government that can earn the trust of its people.

In effect and bluntly, stop making money equal free speech. Upend and suspend these laws and rulings.

pewresearch.org/politics/2024/…

2. A More Representative and Functional Legislature: The "money primary" that currently forces candidates into a race for the support of wealthy donors would be replaced by a "voter primary," where success depends on broad public support. This would create a more diverse class of public servants and free them from the endless cycle of fundraising, allowing them to focus on the act of governance.

3. Policy Aligned with Public Need: A legislature less beholden to the interests of its funders would be empowered to tackle long-term national challenges from infrastructure and healthcare costs to fiscal responsibility that is based on public need and empirical evidence, rather than the transactional demands of major donors.
VI. Scholarly Critique and Constitutional Rebuttal

Legal scholars have forcefully challenged the “money equals speech” doctrine. Deborah Hellman argued that while money facilitates speech, it is not speech itself, just as one cannot buy votes or sell constitutional rights.

minnesotalawreview.org/wp-content/upl…

Public Citizen’s analysis highlights the flawed assumptions underlying Buckley and Citizens United, noting that the Court failed to recognize the corrupting power of unlimited money in politics.

citizen.org/wp-content/upl…

David Kairys critiques the selective application of the doctrine, noting that the Court has protected wealthy donors while disregarding the expressive rights of ordinary citizens.

slate.com/news-and-polit…
VII. Solutions for restoration of speech not beholden to monetary influences

So, what does that look like from a practical point of view to actually fix this issue of achieving the goal of separating money from the concept of protected speech? This is a monumental challenge that requires action on several fronts. There is no single switch to flip, but rather several distinct pathways that reformers must pursue.

Here are the primary ways it can be done, ordered from the most fundamental and difficult to the most immediate and incremental.

1. Amend the U.S. Constitution - The Permanent Fix:

This is the most direct and consequential solution because it would explicitly override the SCOTUS's interpretation of the First Amendment.

How it works: Proponents advocate for a 28th Amendment to the Constitution. The language would explicitly state that corporations are not people with constitutional rights and that Congress and the states have the authority to regulate all money raised and spent for political purposes.

congress.gov/committee-repo…

The Process: This would be an incredibly high hurdle. An amendment requires a two-thirds vote in both the House of Representatives and the Senate, and then it must be ratified by three-fourths or 38 of the states.

archives.gov/federal-regist…

Likelihood: Very low in the short term due to the current extremes of political polarization in the US. However, it remains the ultimate goal for many reform movements, like those advocated by organizations such as American Promise.

americanpromise.net

2. Overturn Supreme Court Precedent - The Judicial Fix:

This approach involves the SCOTUS reversing its own previous decisions, primarily Citizens United and parts of Buckley.

How it works: A future case concerning campaign finance would have to reach the Supreme Court, and a majority of the justices would need to be convinced that the previous rulings were grievously wrong and damaging to the country. They would then issue a new opinion that sets a new precedent.

The Process: This is a long-term strategy that depends entirely on the composition of the Court. It changes as presidents appoint new justices who are then confirmed by the Senate, a process that can take decades to shift the Court's ideology.

Likelihood: Extremely low with the Court's current composition. It would require a significant ideological shift on the bench in the future. Compelling arguments would have to be made to compel the court to seriously consider a likely outcome where it would overturn its own prior decisions.

3. Pass New Federal and State Laws - The Legislative Fix:

This is the most active and immediately achievable area of reform. Instead of directly challenging the money equals speech doctrine, these laws aim to reduce the influence of big money and empower ordinary citizens within the current legal framework.

A. Radical Transparency and Disclosure:

1. What it is: The idea here is that if big money can't be limited, it should at least be completely transparent. This involves passing laws like the DISCLOSE Act, which has been proposed in Congress.

congress.gov/118/bills/hr11…

2. How it works: These laws would require all organizations spending money on elections, including anonymous "dark money" groups, to immediately disclose their major donors. The theory is that voters, armed with the knowledge of who is funding a particular message, can make more informed decisions. More information on this can be found at the Brennan Center for Justice.

brennancenter.org/our-work/analy…

B. Public Financing of Elections:

1. What it is: This is a strategy to amplify the power of small-dollar donors to compete with big money.

2. How it works: The government creates a voluntary system for candidates. If they agree to accept only small donations, those donations are then matched with public funds. For example, a $50 donation from a citizen could be matched with a 6-to-1 ratio, turning it into a $350 contribution for the campaign. This allows candidates to run a viable campaign without relying on billionaires or corporate PACs.

3. Examples in Action: This is already working at the state and local level. Connecticut's "Clean Elections" program and Seattle's "Democracy Vouchers" are two of the most successful models. These local successes serve as a proof of concept for a potential national system.

seec.ct.gov/Portal/data/CE…

seattle.gov/democracyvouch…

C. Strengthening Enforcement:

1. What it is: A simpler but crucial reform would be to overhaul the perpetually gridlocked Federal Election Commission (FEC).

2. How it works: The FEC is responsible for enforcing campaign finance law, but is often paralyzed by its partisan structure. Restructuring the agency to allow it to effectively investigate and punish violators would add teeth to the laws that are already on the books.

brennancenter.org/our-work/polic…

Getting money to stop equaling speech is a multi-front battle that combines the long-term, ambitious goals of amending the Constitution with the more immediate, practical steps of passing new laws at the federal, state, and local levels.
Conclusions:

The SCOTUS's monetized speech doctrine is a failed experiment. It is based on a flawed understanding of liberty, it has been rendered obsolete by technology, and it has created a failed marketplace of ideas that actively damages the republican structure of our government. It is the duty of the SCOTUS to correct this error and restore a constitutional framework that serves the liberty of all citizens, not just the financial power of a few.

Also, let's remember that this debate transcends the left/right paradigm. I'm not the only one who feels, thinks, or believes this way. There are untold millions of people who have seen the degradation of our political discourse and the 10's if not 100's of billions of dollars spent to sway how you speak, think, and see whatever information the funders of free speech want you to know. Stop them.

Let's all work together to restore the First Amendment to its rightful spot. Please don't sell it out to the highest bidders. Don't let it get monopolized by the deepest pockets. Don't let it be used against us by dark and foreign adversaries who don't have our best interests at heart.

Thank you, dear reader, for taking the time out of your day to read this. I want to offer solutions, not just yell from the sideline at the problem, thinking it will reform itself if my voice is loud enough.

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More from @Batboy_Supreme

Aug 24
A Framework for Constitutional Money: A Rules-Based, Competitive, and Fiscally Disciplined Alternative to the Federal Reserve System

Preface:

As some of you have seen and read, my prior pinned tweet about what the pros and cons were of ending the Fed. I provided a thorough analysis of what it would take for that to happen, including the ifs, whens, whys, and whats. I tried to make it as comprehensive as I could. I spent a lot of time (a year) researching and really digging into the entire system from before it started, what precipitated or necessitated the need for a Federal Reserve System, and how it has been used and has affected the course of this country using its dual mandate to drive the economics of this country and frankly the world. It was an opportunity to explore a replacement theory or to understand at least what it would take to replace it, given all of the criticisms since its inception to now.

I initially wanted to include it in that analysis, but given the time and my inclination, I did not feel ready or prepared to fully flesh out a system by which a replacement for the fed could be made. I had to sit for a long time in my head to hammer out a system that would have a principled framework from the very basis of constitutionality. That is and has been one of the chief complaints for the Federal Reserve overall. That its very existence, even though it was passed in Congress with the Federal Reserve Act of 1913 alongside the Revenue Act of 1913, which allowed Congress to tax your labor as well, would be so polarizing in its mission.

What I aim to do here is to outline for you, the reader, a framework for what the Federal Reserve system should be replaced with. If you could see what it took to come up with this, it would look like a conspiracy theorist's wall with pictures and a string leading to a super villain at the top. But seriously, I believe this system has a real chance of being read by the right people and possibly being adopted. Now, is it perfect? Only in my eyes, like a parent who stares at their newborn child. But for the rest of you, you will find flaws and holes in it that will, for the most part, make it a better system overall.

So, as always, if you see something, say something. If you think you have a better way to get something done within this framework, by all means let me know via DM or in a reply to this post itself. I want to hear it. I’m not infallible. I make mistakes, and I want to learn from them, understanding where those mistakes are, so they aren’t made again.

In doing so, I become better through your vision. So, without further ado, please enjoy my work, and if you like it, consider a follow or liking it. Be well, and thank you for your time to read this.
Introduction:

The modern system of discretionary central banking, embodied by the Federal Reserve, represents a century-long experiment in economic management. While intended to provide stability, its history is marked by persistent inflation, the creation of severe moral hazards, and the enablement of unprecedented levels of government debt. Please reference the prior pinned post of the analysis titled: Abolishing the Federal Reserve – Pros and Cons: A Comprehensive Analysis of Feasibility, Consequences, and Alternatives on 07/17/2025.

x.com/Batboy_Supreme…

The core flaw lies not in the desire for a stable currency, but in the delegation of immense, discretionary power to a quasi-independent body of technocrats. This structure is both constitutionally suspect and practically problematic. The result is a system where monetary policy is often unpredictable, subject to political pressure, and serves to socialize the losses of the financial sector while systematically eroding the purchasing power of the public.

A return to first principles is required. A monetary system fit for a constitutional republic should not be based on the shifting judgments of a few, but on a foundation of clear rules, robust competition, and inviolable fiscal discipline. It must be a system where the monetary authority is a servant to the law, not its master, and where the government is a participant in the economy, not its ultimate guarantor.

This solution to ending and replacing the Federal Reserve outlines such a framework. It is not a proposal to merely tweak the existing Federal Reserve, but to replace it entirely with a new monetary constitution built upon four integrated pillars. This framework is designed to be constitutionally sound by restoring Congress’s role in setting monetary rules – one of the chief and loudest complaints of its critics since its inception, economically efficient by providing a stable and predictable environment for growth, and structurally resilient by severing the link between money creation and government spending. It is a blueprint for a system where the value of the currency is anchored not to a volatile commodity, but to the credibility of a transparent rule, reinforced by the discipline of the free market.
Section 1:

The Four Pillars of a New Monetary Framework:

The proposed alternative is not a single institution, but an interlocking system of rules and market mechanisms designed to create a stable and self-regulating monetary order. Each of the four pillars is essential to the integrity and function of the whole.

1.1 Pillar I: A Constitutional Mandate of Nominal GDP (Gross Domestic Product) Level Targeting or NGDPLT

The foundation of the new system is the replacement of the Federal Reserve’s vague dual mandate with a single, unambiguous, and legally binding monetary rule established by Congress.

1.1.1 The Mandate: Congress, exercising its authority under Article I, Section 8 to "coin Money, [and] regulate the Value thereof," would legislate a clear and simple rule for the nation’s monetary policy: Maintain a stable growth path for the level of nominal Gross Domestic Product (NGDPLT).

For example, the law could mandate that the total dollar value of spending in the economy grow at a steady 4% per year. This target is transparent, easily understood, and directly related to the flow of income that households and businesses actually experience.

1.1.2 Constitutional Soundness: This approach resolves the constitutional dilemma of delegation. Congress is not offloading its legislative power, but rather, it is exercising it by setting a precise rule, much like it has the power to "fix the Standard of Weights and Measures." The execution of the rule is a technical, administrative function, not a discretionary legislative one.

1.1.3 Economic Superiority: NGDPLT is a more robust and efficient anchor than inflation targeting. Its primary advantage is its intelligent response to economic shocks.

1.1.3.1 In a Supply Shock: For example, an oil crisis that raises prices and reduces output would activate a strict inflation-targeting central bank, which is forced to tighten policy to fight the price rise, thereby deepening the recession.

Under NGDPLT, the rise in prices is automatically offset by the fall in real output. Monetary policy can remain neutral or even become accommodative to ensure total spending does not collapse, thus providing a powerful automatic stabilizer.

1.1.3.2 In a Demand Shock: For example, a collapse in consumer confidence would activate the NGDPLT to commit the monetary authority to do whatever is necessary to restore nominal spending to its target path, powerfully anchoring expectations and preventing a deflationary spiral.

1.1.4 Debt Sustainability: By ensuring the nation’s nominal income grows at a steady and predictable rate, the NGDPLT rule guarantees that the tax base expands reliably over time. This makes the existing national debt far more manageable, as the debt-to-GDP ratio will decline as long as fiscal policy is constrained.

1.2 Pillar II: A Reformed, Rules-Based Monetary Authority

The Federal Reserve System would be abolished. Forever. Completely and in totality. In its place, a new, much smaller entity, the US Monetary Authority, would be established with a radically circumscribed mission.

1.2.1 Function: This Authority would have one primary responsibility: to execute the NGDPLT mandate set by Congress using open market operations. It would have no discretionary power to set interest rates or deviate from the rule. Its function would be purely technical, which is to conduct the necessary transactions to ensure the market expects nominal GDP to remain on its legislated path.

1.2.2 Accountability: The Authority would be directly and entirely accountable to Congress for any deviation from the target. This clear line of accountability eliminates the mystique and political maneuvering that surrounds the current Federal Open Market Committee.

1.2.3 Operational Role: For efficiency and continuity, the Authority would inherit the operational responsibility for managing the critical "plumbing" of the financial system, such as the Automated Clearinghouse (ACH) and FedWire services, ensuring the secure and efficient settlement of trillions of dollars in daily payments.

1.3 Pillar III: A Competitive Currency Framework A core flaw of the current system is the government's monopoly on currency, which removes any market pressure to maintain its quality. This framework corrects that flaw by introducing regulated competition.

1.3.1 Legalization and Regulation: While the US Monetary Authority manages the base dollar, Congress would pass a comprehensive legal framework to explicitly authorize and regulate private currencies, particularly fully-reserved digital currencies or stablecoins.

This would not be a deregulated "wild west," but a system with clear federal standards for reserve composition. For example, 1-to-1 backing with short-term government securities, transparent auditing, and operational resilience to ensure consumer protection.

1.3.2 Market-Based Discipline: This competition provides the ultimate check on the government's monetary stewardship. If the US Monetary Authority were to fail in its duty to maintain the NGDPLT rule, causing the dollar to become unstable, citizens would have a legal and practical escape route.

They could seamlessly shift their savings and transactions into more stable, privately issued, and fully audited alternatives. This constant threat of substitution forces the government to maintain a sound currency or risk its own money becoming irrelevant.

1.4 Pillar IV: A Restructured Lender of Last Resort and the Imposition of Fiscal Discipline

The framework recognizes the need for an emergency liquidity provider but radically reforms its function to eliminate moral hazards and, most importantly, to impose a hard budget constraint on Congress.

1.4.1 A Reformed LOLR: The Lender of Last Resort function would be removed from the monetary authority and housed within the Treasury, governed by strict, legislated rules based on classical Bagehot principles (see: Bagehot’s Dictum and Discretionary Benefits in the Absence of Rules-Based Lender of Last Resort Policy). It could only lend to solvent but temporarily illiquid institutions, at a high penalty interest rate, and only against good collateral.

This prevents the bailouts of insolvent, poorly managed firms and ensures the LOLR is a true emergency firebreak, not a routine support mechanism for reckless behavior, which has been the hallmark of the Federal Reserve in terms of the idea that companies/corporations are too big to fail, meaning a lifesaving bailout. The Federal Reserve, through the taxpayer, took the hit.

1.4.2 Imposing Fiscal Discipline: This is the system's capstone. By abolishing the discretionary power of a central bank, this framework severs the link between government spending and money creation. The Treasury can no longer rely on the monetary authority to monetize its debt or suppress interest rates to make borrowing artificially cheap. The government would be forced to finance all spending through two honest channels.

1) Direct taxation or...

2) Borrowing in open, competitive markets at prevailing interest rates. This imposes an inescapable fiscal discipline, forcing Congress to make difficult choices and bringing an end to the era of unrestrained deficit spending.
Read 7 tweets
Jul 17
Abolishing the Federal Reserve – Pros and Cons: A Comprehensive Analysis of Feasibility, Consequences, and Alternatives

The Federal Reserve System, which is the central bank of the United States, is what is considered a cornerstone of the modern American/Global economic framework and architecture. Since its inception in 1913 and consequently alongside the 16A passed and ratified in the same year, it has been given immense power/responsibility. Not just from a currency and monetary policy point of view, but it wields power over financial markets, interest rates, rates of inflation, and so on.

It was intended to serve as a shield against the financial chaos that periodically shook the nation in the preceding century. However, from the moment of its creation, the Federal Reserve or The Fed, as many call it, has been a subject of intense and unceasing debate. To its proponents, it’s an indispensable institution providing monetary stability, a flexible currency, and a crucial defense against economic downturns and financial panics. To its naysayers, it’s an unconstitutional and corrupt entity, an engine of inflation, a facilitator of government profligacy, and the primary cause of potential and possible economic instability it was meant to prevent.

morningstar.com/economy/what-i…

jec.senate.gov/public/_cache/…

cfr.org/backgrounder/w…

en.wikipedia.org/wiki/Criticism….

This century-long controversy has recently gained renewed vigor, fueled by the long shadow of the 2008 financial crisis, unprecedented monetary interventions during the COVID-19 pandemic, and a subsequent surge in inflation that has eroded the purchasing power of households worldwide. These events have put the Federal Reserve's operations into the public spotlight and amplified the calls of a vocal and politically organized movement to "End the Fed". This movement, once confined to the circles of Austrian economists and libertarian thinkers, has entered the political mainstream, prompting legislative proposals for the Federal Reserve's abolition.

en.wikipedia.org/wiki/End_the_F…

The question of whether "Is it possible to end the Federal Reserve?" isn’t merely a theoretical exercise but a question of profound practical importance. Answering it requires moving beyond partisan arguments, but to engage in a rigorous and multi-faceted investigation. This report endeavors such an investigation. It will look at the feasibility, consequences, and alternatives associated with dismantling the central bank.

The analysis begins by establishing a foundational understanding of why the Federal Reserve was created, examining the historical context of financial instability that made its establishment necessary. It will then look at the core functions the modern Fed performs, from its dual mandate of promoting maximum employment and stable prices to its critical roles as the lender of last resort and the operator of the nation's payment system.

Once this baseline is established, the report will turn to a systematic and thorough examination of the case for abolition, presenting the multi-pronged economic, moral, and constitutional criticisms that form the intellectual bedrock of the End the Fed movement.

Also, it will confront the monumental cons of abolition, analyzing the logistical gauntlet of undoing such a deeply embedded institution and the potentially catastrophic economic/geopolitical consequences of its absence. And finally, the report will critically evaluate the primary alternatives proposed to replace the current system: a return to the gold standard, the implementation of a free banking regime, the transfer of monetary authority to the US Treasury, or the adoption of a decentralized digital currency like Bitcoin.

Attempting to explore this full spectrum of issues presented above, this report aims to provide a comprehensive, nuanced, and definitive analysis. It will attempt to inform policymakers, financial professionals, and engaged citizens with the deep, evidence-based understanding necessary to navigate one of the most complex and consequential economic questions of our time. It will be broken up into sections to address the various breadth of topics that this report will delve into.

Before I go on, I hope you enjoy this work. It’s something I’m undertaking on a wide array of important topics to look at, but also issues surrounding the Federal Reserve in a more in-depth and needed way. Too often, we discuss these matters at the surface from likes and dislikes, but we rarely get underneath that surface and dive deep.

I’m trying to change that and give comprehensive, researched, fact-based knowledge on topics like this. This is my research and it’s not AI-based. I’ve deliberately steered away from AI to ‘fill in the gaps’ because AI often gets it wrong, and its bias also factors into the research. I will try to keep my bias as minimal as possible and give you as much objectivity as I can as humanly possible. If I’ve failed in that in this report, please accept my apologies. It isn’t intentional.

However, if you believe this report gave you value and insight, consider a follow. But most of all, as I’m a small account, repost it anywhere/everywhere you can to get this information out there. Thank you. Let’s get started.
Section 1: The Federal Reserve System: Architecture, Mandate, and Rationale
To understand the arguments for abolishing the Federal Reserve, an understanding of what it’s, what it does, and why it was created. The Federal Reserve didn’t emerge from a vacuum. It was a deliberate and deeply controversial solution to a century of documented financial instability. Its architecture, mandate, and the very rationale for its existence are rooted in the economic injuries that defined American finance before 1913. This section provides the essential context for establishing a baseline against the critiques, and proposed alternatives can be properly evaluated.

1.1 Genesis: A Response to a Century of Financial Instability
The narrative of the Federal Reserve's creation is fundamentally a story of a nation grappling with the violent economic cycles of the 19th and early 20th centuries. The period before 1913 wasn’t a tranquil era of laissez-faire stability but was marked by frequent, severe financial panics that inflicted widespread economic hardship. The establishment of the Fed was the culmination of a long and contentious search for a mechanism to tame this volatility.

The United States has a long history of ambivalence toward central banking. The nation's first two experiments, the First Bank of the United States from 1791–1811 and the Second Bank of the United States from 1816–1836, were modeled on the Bank of England and designed by figures like Alexander Hamilton to manage the nation's war debts, provide a stable currency, and create a central source of capital for economic development. Both were successful in many respects but ultimately fell victim to a deep-seated Jeffersonian suspicion of concentrated financial power and concerns about their constitutionality, leading Congress to refuse the renewal of their charters.

The demise of the Second Bank ushered in the Free Banking era around 1837–1862, a period often romanticized by some critics of central banking, but which was highly unstable. The system was characterized by a decentralized patchwork of state-chartered banks, each free to issue its own private banknotes. This led to a confusing and unreliable monetary landscape. While the term free banking suggests a lack of regulation, the era's instability was often exacerbated by flawed state laws. For example, many states prohibited banks from establishing branches, which prevented geographic diversification and made them more vulnerable to local economic shocks. Also, many states required banks to back their banknotes with specific state government bonds, tying the health of the bank to the fiscal condition of a single state government and concentrating risk. The result was a system prone to bank failures and periods of financial turmoil.

clevelandfed.org/publications/e…
en.wikipedia.org/wiki/History_o…
learn.apmex.com/learning-guide…
richmondfed.org/publications/r…

The period following the Civil War and the establishment of the National Banking System did little to solve the fundamental problem of financial fragility. Between 1863 and 1913, the United States experienced at least eight distinct banking panics. While some were confined to New York City, the crises of 1873, 1893, and 1907 were nationwide contagions that were devastating to the nation and the world.

The Panic of 1873, triggered by the failure of the banking house Jay Cooke & Co. due to overinvestment in railroads, led to the first closure of the New York Stock Exchange, the failure of at least 100 banks, and caused a depression that lasted until 1879. The Panic of 1893 was even worse, with over 500 banks and 15,000 companies failing, and unemployment skyrocketed.

These crises repeatedly exposed the two critical weaknesses of the US banking system, which were an inelastic currency and the lack of a lender of last resort. The money supply, tied to gold or national bank reserves, couldn’t expand to meet the public's demand for cash during a panic.

When depositors feared for a bank's solvency, they would run to withdraw their funds, and banks would be forced to sell assets at fire-sale prices, and many would fail, causing the panic to spread.

federalreservehistory.org/essays/banking…

fraser.stlouisfed.org/title/federal-…

The Panic of 1907 was the final straw that broke the camel’s back. A failed attempt to corner the market in United Copper Company stock triggered a series of events that led to runs on New York trust companies, spreading fear throughout the entire financial system.

The crisis was ultimately squashed not by a government institution, but by the private intervention of financier J.P. Morgan, who organized liquidity pools and decided which firms would be saved and which would fail. The specter of a single private citizen wielding such immense power over the nation's financial fate convinced many that a public institution was needed to perform this role.

In response, Congress created the National Monetary Commission in 1908, which studied the central banking systems of Europe. This study and the ensuing political debate, which pitted agrarian and populist interests against those of Wall Street and big business, allowed the Federal Reserve Act of 1913 to become widely adopted and passed.

The Act was a uniquely American compromise that instituted a decentralized system of twelve regional Reserve Banks, overseen by a public Board of Governors in Washington, D.C., designed to provide the elastic currency and lender-of-last-resort functions that the previous system lacked.

The Fed's creation was the result and response to the well-documented and recurring failures of the decentralized, panic-prone financial system that preceded it.

investopedia.com/ask/answers/08…

senate.gov/artandhistory/…

1.2 The Modern Fed's Core Functions: Pillars of the Financial System
Over the century since its founding, the Federal Reserve's roles and responsibilities have evolved significantly, but its core functions remain central to the operation of the US economy. These functions are deeply intertwined, often creating complex trade-offs/compromises that are at the heart of modern monetary policy debates.
The Dual Mandate: Price Stability and Maximum Employment

The centerpiece of the Fed's current mission is its dual mandate, which is a set of goals assigned by Congress. The Federal Reserve Act, as amended in 1977, directs the Fed to conduct monetary policy "so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates". The goals of stable prices and moderate long-term interest rates are generally seen as a single objective, since stable prices are a prerequisite for moderate long-term rates, leaving the Fed with its two primary and often conflicting objectives.

The first is Maximum Employment. This doesn’t mean a 0% unemployment rate because economists recognize that there is always a level of frictional and structural unemployment as people change jobs and industries evolve. The Fed aims for the noncyclical rate of unemployment, which is the highest level of employment the economy can sustain without generating inflationary pressure. This level is not fixed and changes over time based on non-monetary factors. However, the Fed does not specify a fixed goal for employment but instead assesses it based on a wide range of labor market indicators.

The second is Stable Prices. This has been explicitly defined by the Fed's policymaking body, the Federal Open Market Committee - FOMC, as an average inflation rate of 2 percent per year, as measured by the Personal Consumption Expenditures – PCE price index. This target is considered low enough to avoid the economic distortions of high inflation but high enough to provide a buffer against deflation, which in this case would be a general decline in prices that can be uniquely destructive to an economy by increasing the real burden of debt and discouraging spending.

This dual mandate presents an inherent challenge. The policies used to stimulate the economy and promote employment, such as lowering interest rates, can also fuel inflation. Conversely, policies used to fight inflation, such as raising interest rates, can slow the economy and increase unemployment. Much of the Fed's work involves navigating this trade-off, making it a constant balancing act rather than a simple pursuit of fixed targets.

federalreserveeducation.org/teaching-resou…
investopedia.com/articles/inves…

The Lender of Last Resort - LOLR
A foundational reason for the Fed's creation was to act as a lender of last resort, a function critical for maintaining financial stability. In a fractional-reserve banking system, banks hold only a fraction of their deposits in cash. If a large number of depositors demand their money back at once in a bank run, even a solvent bank can become non-liquid and fail. The fear of one bank's failure can spread, causing runs on other banks and potentially triggering a systemic crisis.

scholar.law.colorado.edu/faculty-articl…

The Lender of Last Resort function is designed to break this chain of contagion. The Fed can provide short-term, emergency loans to make solvent but non-liquid financial institutions, ensuring they can meet depositor demands and restoring confidence in the system.

The classical theory of The Lender of Last Resort, articulated by Walter Bagehot in the 19th century, holds that the central bank should lend freely, but at a high penalty rate, and only against good collateral to discourage banks from relying on it except in true emergencies.

In the modern era, particularly since the 2008 financial crisis and the C19 pandemic, the Fed has expanded its The Lender of Last Resort role far beyond traditional discount window lending to commercial banks. Invoking its emergency powers under Section 13(3) of the Federal Reserve Act, it has provided liquidity to a wide range of non-bank financial institutions, including investment banks and money market funds, and has even established facilities to lend directly to corporations and municipalities.

While these actions were credited with preventing a complete financial collapse, they have also fueled intense debate about moral hazard—the idea that bailing out institutions encourages excessive risk-taking in the future.

Management of the National Payment System
Beyond its high-profile monetary policy and crisis-fighting roles, the Fed performs the crucial but often overlooked function of managing the plumbing of the US financial system. The Reserve Banks operate critical infrastructure that facilitates the daily transfer of trillions of dollars between banks, businesses, and government agencies.

Key payment services provided by the Fed include:

1. Automated Clearinghouse (ACH): This system processes large volumes of credit and debit transfers for services like direct deposit of paychecks, Social Security benefits, and automatic bill payments.

2. FedWire Funds Service: A real-time gross settlement system that enables participants to make large-value, time-sensitive payments with immediate finality.

3. Check Clearing: While the use of checks has declined, the Fed still provides services for collecting and settling checks between banks.

4. FedNow Service: Launched in 2023, this is a new instant payment service that allows for round-the-clock, real-time payments, enabling individuals and businesses to send and receive funds immediately, 365 days a year.

federalreserve.gov/paymentsystems…

cato.org/publications/r…

iea.org.uk/a-radical-alte…

In this capacity, the Fed acts as a bank for banks that ensures the smooth, efficient, and secure settlement of transactions that underpin the entire economy. Any plan to abolish the Federal Reserve must account for how these essential, high-volume operational services would be maintained without disruption.

federalreserve.gov/aboutthefed/fe…

federalreserve.gov/aboutthefed/fe…

mises.org/mises-wire/how…

The Modern Monetary Policy Framework - From Scarce to Ample Reserves
The way the Fed implements monetary policy has undergone a fundamental transformation since the 2008 financial crisis. Before 2008, the Fed operated in a "scarce reserves" framework. It would buy or sell government securities in the open market to make small adjustments to the total amount of reserves in the banking system, influencing the federal funds rate (the rate at which banks lend to each other overnight) to move toward a specific target.

richmondfed.org/publications/r…

elibrary.imf.org/display/book/9…

Following the crisis, the Fed's large-scale asset purchases, known as Quantitative Easing or QE as it has become to be known, flooded the banking system with trillions of dollars in reserves. This created an abundant reserves system, which remains in place today. In this framework, the sheer volume of reserves means that small changes in supply no longer affect the federal funds rate. Instead, the Fed now controls the rate primarily by setting its administered rates, particularly the interest rate it pays on reserve balances or IORB.

Banks have no incentive to lend to each other at a rate lower than what they can earn risk-free from the Fed, making the IORB an effective floor for the federal funds rate. This new system provides effective control over interest rates even when large amounts of liquidity are needed to support the economy, as was seen during the C19 pandemic. But, it also means the Fed must maintain a much larger balance sheet than in the past, a point of contention for its critics.

208.properties/real-estate-in…

fedsoc.org/commentary/fed…

1.3 The Paradox of Independence and Accountability
The structure of the Federal Reserve is a unique hybrid, designed to resolve a fundamental tension in democratic governance, which is how to entrust immense economic power to an institution while insulating it from short-term political pressures. This has led to a system that is often described as independent within the government.

The Fed's independence is structural. The Board of Governors is a federal government agency, but the seven governors are appointed by the President and confirmed by the Senate for long, 14-year, staggered terms. This is intended to ensure that no single president can appoint a majority of the board and to allow governors to make policy decisions based on long-term economic considerations, rather than the short-term electoral calendar.

Academic research and international experience suggest that central bank independence is strongly correlated with lower and more stable inflation, as it allows policymakers to make unpopular decisions, like raising interest rates, when necessary.

The twelve regional Reserve Banks have a quasi-private structure. They are technically incorporated and have member commercial banks in their districts as shareholders. However, this ownership is, to a large extent, symbolic. The shares cannot be sold or traded, and they pay a statutorily fixed dividend of 6 percent.

They do not confer control rights in the way corporate stock does. The presidents of the regional banks are appointed by their local boards of directors, but must be approved by the Board of Governors in Washington. This structure is intended to blend public accountability with private-sector input and experience.

Despite this operational independence, the Fed is not free from oversight. It’s a creature of Congress and is ultimately accountable to the public and their elected representatives. This accountability is enforced through several mechanisms:

1. Congressional Testimony: The Fed Chair testifies before Congress semiannually on the Fed's monetary policy report, and other officials testify frequently.

2. Reporting Requirements: The Fed regularly publishes reports on its activities, including its annual report, FOMC meeting minutes, and weekly balance sheet data.

3. Audits: The Fed's financial statements are audited annually by an independent public accounting firm. In addition, the Government Accountability Office (GAO) conducts frequent audits of many Fed activities, though its audits of monetary policy deliberations are restricted.

The central issue is not, as some critics claim, that the Fed is a private corporation secretly controlled by bankers. The more substantive and valid debate revolves around whether this unique structure has the right balance. Critics argue that this insulation from the political process is fundamentally undemocratic, granting vast, unchecked power to a board of unelected technocrats.

Proponents counter that this very independence is what allows the Fed to pursue the long-term goal of price stability, a goal that would be consistently undermined if monetary policy were subject to the whims of electoral politics. This paradox of independence and accountability lies at the heart of the Fed's legitimacy and is a recurring theme in the debate over its existence.

It also strikes at the heart of those who claim the Fed has never been audited, which is not the case. The Fed has been audited multiple times since its creation and ratification in 1913. Critics are quick to argue that the Fed is hiding important monetary information and is a hive of nefarious economic activity that is hobbling or has hobbled our economy in one form or another.

investopedia.com/ask/answers/08…

carolinajournal.com/opinion/its-ti…

stlouisfed.org/about-us/is-th…
federalreserve.gov/aboutthefed/au…
Section 2: The Case for Abolition: A Multi-Pronged Critique

The movement to end the Federal Reserve is not a monolithic entity but a confluence of several powerful streams of criticism, drawing from economics, constitutional law, and moral philosophy. These critiques, while diverse in their origins, come together on the conclusion that the Federal Reserve is not a benign stabilizer but a detrimental force in the American economy and society.

They form a coherent, interconnected worldview that portrays the Fed as an engine of instability, an enabler of government overreach, and an instrument of elite interests.

2.1 The Economic Critique: An Engine of Instability and Inflation
The most potent intellectual challenge to the Federal Reserve comes from economists who argue that, far from promoting stability, the central bank is the primary source of the economic maladies it claims to fight.

This critique is most forcefully articulated by the Austrian School of economics, but it’s complemented by arguments from other schools of thought, including Monetarism.

Austrian Business Cycle Theory - ABCT
At the core of the Austrian critique is the Austrian Business Cycle Theory or ABCT, developed by economists like Ludwig von Mises and Nobel laureate Friedrich Hayek. ABCT posits that business cycles of boom and bust are not inherent to a free-market economy but are instead caused by central bank intervention in the credit market.

en.wikipedia.org/wiki/Austrian_…

en.wikipedia.org/wiki/Austrian_…

mises.org/online-book/sk…

egmontinstitute.be/trump-takes-on…

The theory begins with the concept of the natural rate of interest, which is the rate that would emerge in a free market, perfectly aligning the supply of savings from households with the demand for investment funds from businesses. This rate acts as a crucial price signal, coordinating production decisions over time. When people save more, the natural rate falls, signaling to entrepreneurs that more resources are available for long-term investment projects like building factories, developing new technologies.

The Federal Reserve, according to ABCT, disrupts this delicate process. By expanding the money supply out of thin air and injecting it into the banking system, the Fed artificially suppresses the market interest rate below the natural rate. This sends a false signal to businesses. Entrepreneurs, seeing lower borrowing costs, are misled into believing that society has increased its savings and that more resources are available for long-term projects than actually exist.

This triggers an artificial boom characterized by malinvestment, the allocation of capital to projects that are not sustainable in the long run because they are not backed by a genuine pool of savings.

This boom is unsustainable. As the new money filters through the economy, it drives up the prices of labor and resources, revealing the scarcity that the low interest rates had masked. To prevent runaway price inflation, the central bank is eventually forced to tighten credit and allow interest rates to rise back toward their natural level.

At this point, the malinvestments are revealed to be unprofitable. The boom turns to bust as businesses liquidate these failed projects, lay off workers, and the economy undergoes a painful but necessary correction to realign its capital structure with actual consumer preferences and savings. From this perspective, the recession is not the problem to be solved; it’s the unavoidable and curative consequence of the artificial boom created by the Fed.

Critics argue this pattern is visible in events like the dot-com bubble and the 2008 housing crisis, which were preceded by periods of artificially low interest rates set by the Fed.

blinkist.com/en/books/end-t…

en.wikipedia.org/wiki/Criticism…

Inflation as a Hidden Tax and Enabler of Government
A central pillar of the abolitionist argument, popularized by figures like former Congressman Ron Paul, is that the Federal Reserve's fundamental nature is inflationary. This critique hinges on a specific definition of inflation. While mainstream economics defines inflation as a general increase in the price level, critics, particularly from the Austrian school, define inflation as the expansion of the money and credit supply itself; rising prices are merely the most visible consequence.

Under this definition, the Fed is inherently an inflationary institution because its primary mechanism is the creation of fiat money, which is currency not backed by a physical commodity like gold but by government decree. This process, critics argue, is a form of legalized counterfeiting. By increasing the money supply, the Fed systematically devalues each existing dollar, eroding the purchasing power of savings and wages held by ordinary citizens. This erosion of value functions as a hidden and regressive tax, transferring wealth from the public to the government and the financial sector.

Furthermore, this power to create money is seen as a dangerous tool that enables unrestrained government growth. Without the Fed, the government would have to finance all its spending through direct taxation or honest borrowing from the public's savings, both of which face clear political limits.

The Fed, by monetizing government debt, for example, buying government bonds with newly created money, allows the government to run massive deficits to fund wars, welfare programs, and other expenditures without imposing politically costly taxes. This argument portrays the Fed not as an independent economic manager but as the fiscal enabler of an ever-expanding state.

Failure of the Mandate and Policy Errors
Beyond the Austrian school, other economists have criticized the Fed for its poor performance and policy mistakes. The most famous of these critiques comes from Nobel laureate Milton Friedman and his collaborator Anna Schwartz. In their seminal work, A Monetary History of the United States, they argued that the Great Depression was made Great by the Federal Reserve's catastrophic policy errors.

Instead of acting as a lender of last resort and providing liquidity to the banking system after the 1929 stock market crash, the Fed allowed the money supply to contract by over a third between 1929 and 1933, choking the economy and turning a recession into a decade-long catastrophe. This monetarist critique, while differing fundamentally from the Austrian view on the initial cause of the bust, arrives at a similar conclusion: the Fed's discretionary power can be profoundly destabilizing. Friedman himself ultimately concluded that the Fed's poor performance meant it should be abolished and replaced with a computer program that would increase the money supply at a steady, fixed rate.

en.wikipedia.org/wiki/Panic_of_…

goodreads.com/book/show/6388…

mises.org/mises-daily/en…
en.wikipedia.org/wiki/Criticism…

More recent criticisms have focused on the Fed's policy framework. Its 2% inflation target is seen by some as arbitrary and potentially harmful, forcing the Fed to rely on unconventional tools like quantitative easing when rates are near zero. The Fed's post-2020 framework, Flexible Average Inflation Targeting - FAIT, has been criticized as being asymmetrically applied.

It was used to justify tolerating higher inflation to make up for past undershoots, but was not used to correct for the massive inflation overshoot that followed, thereby contributing to the post-pandemic price surge and undermining the Fed's credibility.

Unconventional policies like Quantitative Easing (QE), where the Fed purchases long-term securities to lower long-term interest rates, are also criticized for devaluing the currency, creating asset bubbles, and primarily benefiting investors and borrowers over savers.

carolinajournal.com/opinion/its-ti…

economictimes.indiatimes.com/news/internati…

federalreserve.gov/newsevents/bow…

aier.org/article/rethin…
brookings.edu/articles/advic…

2.2 The Structural and Moral Critique: Hazard, Cronyism, and Constitutionality
Beyond purely economic arguments, critics assail the Federal Reserve on structural and moral grounds, arguing that it fosters a corrupt and inequitable financial system and that its very existence violates the US Constitution.

Moral Hazard and Too Big to Fail
A pervasive critique is that the Fed's role as a lender of last resort, especially as demonstrated by its massive interventions during the 2008 financial crisis, creates severe moral hazard. Moral hazard is an economic concept where a party is incentivized to take on more risk because it knows that another party will bear the costs of failure.

When large financial institutions believe they are too big to fail, the government and the Fed will bail them out to prevent systemic collapse, which gives them a powerful incentive to engage in excessively risky behavior. This leads to a system of privatized profits and socialized losses, where banks and their executives reap enormous rewards during boom times, but the public and taxpayers are forced to cover the losses during busts.

Critics argue that the bailouts of institutions like Bear Stearns and AIG in 2008, and the subsequent creation of numerous emergency lending facilities, have permanently embedded this moral hazard into the financial system, making future crises more likely. The Fed's actions are seen not as stabilizing the system, but as protecting the interests of Wall Street at the expense of market discipline.

Serving Elite Interests
This critique extends to the very structure and origin of the Fed. Abolitionists often point to the secretive 1910 meeting on Jekyll Island, Georgia, where powerful financiers from the houses of Morgan and Rockefeller laid the groundwork for the Federal Reserve Act. They argue that the Fed was designed by and for the benefit of large banks, creating a government-sanctioned cartel to protect them from competition and allow them to socialize their losses.

This argument is often coupled with the Cantillon Effect, an economic concept which posits that those who receive newly created money first gain the most benefit. When the Fed expands the money supply, the new money flows first to the government and large financial institutions. They get to spend this new money at existing prices.

By the time the money trickles down to the rest of the population in the form of wages and payments, general prices have already begun to rise. This process, critics argue, systematically transfers wealth from the poor and middle class to the politically connected elite, exacerbating economic inequality.

mises.org/online-book/sk…

lee.senate.gov/2025/3/sen-mik…

brookings.edu/articles/advic…

The Constitutional Challenge
Finally, there is a fundamental legal and philosophical argument that the Federal Reserve is unconstitutional. This critique is rooted in a strict interpretation of the US Constitution. Article I, Section 8 explicitly grants Congress the power to coin Money, regulate the Value thereof. Critics contend that this is a sovereign power that cannot be delegated, especially not to an independent, quasi-private entity like the Fed.

From this perspective, the Federal Reserve Act of 1913 represents an abdication of Congress's constitutional duty. The 10th Amendment, which reserves powers not delegated to the federal government to the states or the people, is also cited to argue that the federal government was never granted the authority to create a central bank in the first place. Therefore, the Fed's very existence, its power to create fiat money, and its insulation from direct democratic control are seen as violations of the foundational principles of the Republic.

investopedia.com/ask/answers/08…

shortform.com/pdf/end-the-fe…

yipinstitute.org/article/return…

fedsoc.org/commentary/fed…

2.3 The Political Movement to "End the Fed"
These diverse critiques have coalesced into a potent political movement. While opposition to the Fed has existed since its founding, the modern "End the Fed" movement gained significant momentum in the wake of the 2008 financial crisis. Its intellectual roots can be traced to Austrian economists like Murray Rothbard, whose 1994 book The Case Against the Fed provided a detailed historical and economic indictment of the institution.

The cause was famously championed and popularized by former Texas Congressman Ron Paul. Through his presidential campaigns in 2008 and 2012 and his bestselling 2009 book End the Fed, Paul translated the complex economic theories of the Austrian school into a powerful populist message.

He effectively linked the abstract concept of monetary expansion to tangible public frustrations: rising prices, the cost of foreign wars, the perception of a rigged system that bails out Wall Street, and a general loss of liberty. The slogan "End the Fed" became a rallying cry for the Tea Party movement and a broader coalition of libertarians and conservatives.

This political energy has translated into concrete legislative action. Following in Ron Paul's footsteps, current members of Congress, notably Rep. Thomas Massie of Kentucky and Sen. Mike Lee of Utah, have repeatedly introduced the Federal Reserve Board Abolition Act.

While these bills have not advanced, they serve to keep the issue on the legislative agenda. A related and more broadly supported effort has been the Audit the Fed movement, which advocates for a full, unrestricted audit of the Fed's monetary policy decisions and agreements with foreign central banks by the Government Accounting Office (GAO).

Proponents see this as a crucial first step toward transparency, accountability, and, ultimately, abolition. Together, these efforts demonstrate that the case against the Fed is not merely an academic debate but a persistent and organized political force.
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