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Why not a US Central Bank?
I know several economists--not tied to any particular political party--who are suggesting that the time has come for the US to have a central bank, like other civilized countries do. Why not use the Citigroup bailout as the tool? Buy Citigroup for the country, turn it into our national bank, and let the other banks come to terms with that. We will have stability, we will staunch the flow of handouts to bankers (Citigroup management included), and we will set up the conditions for continuing regulation of credit.
Could someone explain why this is NOT a good idea?
Could someone explain why this is NOT a good idea?
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We already have a US central bank - the Federal Reserve.
November 25, 2008 8:55 AM | Reply | Permalink
No, the Federal Reserve is not the US central bank--this is a common error. For example, it does not buy assets. As we have seen, we need an act of Congress for that to happen. IF we had true central bank, the taxpayers of this country could buy up undervalued stocks or short-sell overvalued stocks. Such activity would make money for the government AND help to offset the destabilizing effects of hedge fund short sellers. Thanks for the comment, ttarleton, but take another look at the Fed and its limitations and perhaps you'll see what we're talking about.
November 26, 2008 11:31 PM | Reply | Permalink