Abolish the Federal Reserve

Editor's note: America does not need a central bank. The Federal Reserve has become an archaic, dangerous, unaccountable engine of economic instability that threatens America's future. By creating money out of nothing, manipulating interest rates, and propping up debt-laden governments and banks, the Fed inflates bubbles, erodes savings, and concentrates wealth in the hands of elites. Its policies distort markets, encourage reckless spending, and undermine personal freedom, leaving ordinary Americans to bear the costs. If the U.S. is to survive financially and socially, the Fed must be abolished and monetary power returned to a transparent, sound, and accountable system. There can be no discussion or debate about this except how to establish new banking systems including community banks.
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Our Economy Has Never Needed an "Elastic" Currency

September 23, 2025 | By Jonathan Newman

The most common argument against a commodity money is that it doesn't expand and contract with the "needs of trade." The idea is that if the economy grows, the money supply should grow with it. Under the gold standard, increasing the supply of gold was slow and costly, so we needed to break away from those limitations with a system that allows for quick and low-cost increases in the money supply when warranted.

This argument was central to the founding of the Federal Reserve. In fact, it's mentioned in the first sentence of the Federal Reserve Act: "An Act […] to furnish an elastic currency."

The spirit of this argument was repeated when Congress endowed the Fed with its overarching policy goals: "[the Fed] shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates" (emphasis added).

Why was the Fed created "to furnish an elastic currency?"

Unfortunately, the narrative surrounding the origins of the Fed have been severely misrepresented (much like the myth of how it obtained “independence”). There was no populist groundswell of support for an elastic currency. It was an engineered propaganda campaign on the part of big banks and business elites during the Progressive era, as Murray Rothbard highlights in A History of Money and Banking in the United States:

The complaints of the big banks were summed up in one word: “inelasticity.” The national banking system, they charged, did not provide for the proper “elasticity” of the money supply; that is, the banks were not able to expand money and credit as much as they wished, particularly in times of recession. In short, the national banking system did not provide sufficient room for inflationary expansions of credit by the nation's banks.

By the turn of the century the political economy of the United States was dominated by two generally clashing financial aggregations: the previously dominant Morgan group, which had begun in investment banking and expanded into commercial banking, railroads, and mergers of manufacturing firms; and the Rockefeller forces, which began in oil refining and then moved into commercial banking, finally forming an alliance with the Kuhn, Loeb Company in investment banking and the Harriman interests in railroads.

Although these two financial blocs usually clashed with each other, they were as one on the need for a central bank. Even though the eventual major role in forming and dominating the Federal Reserve System was taken by the Morgans, the Rockefeller and Kuhn, Loeb forces were equally enthusiastic in pushing, and collaborating on, what they all considered to be an essential monetary reform.

Of course, there was widespread dissatisfaction with bank failures, and there were populist calls for inflation, like William Jennings Bryan who advocated for reintroducing silver, but the elite interests involved with the creation of the Fed favored a more surreptitiously inflationist system: elastic bank credit.

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How to end the Federal Reserve:

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