There are numerous government regulations, groups, and policies that overstep biblical principles, including the role of the Federal Reserve System. The Federal Reserve System was signed into law in 1913 by President Woodrow Wilson. It was started to “provide the nation with a safer, more flexible, and more stable monetary and financial system” (Board of Governors, 2014). Honestly, the people could not take an efficient plan as this serious, because “the world is full of so-called economists who in turn are full of schemes for getting something for nothing” (Hazlitt, 1979, p. 31). Although, everything it is said to stand for would seemingly benefit America, it appears that there are a few things missing for this centralized banking system to succeed. This paper will discuss how the Federal Reserve System has overstepped biblical principles and failed its people.
It is safe to say that all disasters that have affected our economy have been due to greed of money and lust for power. This can be portrayed during President Nixon’s presidential term, in which he changed the gold standard to the oil standard, and struck multiple deals with Saudi Arabia and other foreign nations in measuring the equivalent of oil to the U.S. dollar amount in exchange for military support and armament. The following strengths were perceived by the federal government of the U.S. dollar at the time, which was: the strength it created in U.S. economy, the fixed relationship of the dollar to gold at $35 an ounce, the commitment of the U.S. government to convert dollars into gold at that price, the dollar earned interest, and ultimately, the dollar was more flexible than gold (Mills, 2012). Or, so they thought. Also at this time and before President Nixon, the Vietnam War was spiraling out of control and President Johnson initiated a war on poverty that had already costed the government billions of dollars over what was in the Federal Reserve (Mills, 2012). Once in office, President Nixon continued to further expand on the war on welfare and severed all ties with the Bretton Woods agreement leaving the dollar as a “floating fiat currency” (Mills, 2012). As a result of President Nixon’s deceit the economy suffered from inflation and trade imbalances, which resorted to monetizing the debt.
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This was the initial start of the government creating treasury bonds, taking them to the Federal Reserve and the Federal Reserve System in return creating billions of dollars out of thin air to exchange treasury bonds with the government. These bonds are exchanged for money, and are auctioned off through the Federal Reserve System. The government then has to pay interest on the treasury bonds that were exchanged for money. The debt created by this transaction was greater than the amount of money held in the Federal Reserve as collateral. The problem is that this money does not exist as a tangible asset. The Federal Reserve knows this but, the government keeps borrowing unbacked currency to keep the government running, this is also known as monetizing the debt. According to Jerry Robinson, a well-known Economist, “Our entire monetary system is backed up by the full faith and credit of a bankrupted federal government” (Robinsom, 2013). The Bible condemns this kind of money system we use in the United States and also refers to it as an “abomination to the Lord,” as explained in Proverbs 11:1 (King James Version). Leviticus 19:35-36 states to “not use dishonest standards when measuring length, weight, or quantity” but to use “honest scales and honest weights” (New International Version). This bible verse alone defines the lack of biblical principle the federal fosters.
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Was it Least Burdensome on Taxpayers and Voters?
Due to the trial and error ways of the government there have been a multitude of changes that the Federal Reserve System have underwent, although, can we really say our economy is safe? The answer is still just as ambiguous today as it was when the Federal Reserve was created. The ambiguousness can be blamed by the inconsistency of the economy, unequivocal debt increase that is owed, and the high decrease in the value of the American dollar. It can also be proven by the 10 recessions that seemed to follow the start of the Federal Reserve System, including the 2007-09 recession which resulted in the crash of the Real-estate Market (The Federal Reserve Bank of Minneapolis, 2015). Once again the people were deceived by the federal government partaking in “unusual monetary policy moves, unwise regulations, and misguided federal housing policies” (White, 2009). The inept expansion of the mortgage loans to underqualified borrowers is another byproduct of our Federal government’s inability to properly monitor our economy and borrowing yet again from the Federal Reserve system to fix the mistakes by creating more unbacked money and further increasing our debt. When the Federal Reserve System produces money out of thin air “the weights and measures” are changed making it more difficult to buy and sell in our open market economy. This results in the working lower to middle class being over taxed and put into poverty while upper class, big businesses and corporations are reaping all the monetary benefits and profits.
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Government has overstepped biblical principles in the way it runs the government and services U.S. national debt. It can be presumed that if it was not for the federal government intervening where it should not have intervened whether it was in concurrence with regional or state matters or totally opposed the matters and enforcing abrupt changes in policy and regulations, then the economy would not be in as bad of shape as it is today. The game that is being played between the Federal Reserve System and the government is shameful. Based on a letter from Thomas Jefferson to John Taylor, if Thomas Jefferson could have added one more amendment to the U.S. Constitution it would be “taking from the federal government the power of borrowing” (1798). This would have benefited the government much more than the idea of a centralized banking system, which appears to be manipulated constantly creating more problems for citizens. This way of life cannot be sustained. The power and glory is illustrated today in the greed and lust for money, instead of God. We have become a nation of financial woes and it is inevitably sucking in all Christians. It is hard for Christians to obey Romans 13:7-8, “Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Owe no one anything, except to love each other, for the one who loves another has fulfilled the law” if there is a continuance of unsubstantial debt being increased everyday (English Standard Version).