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I was going to write teabagger, but just couldn't bring myself to do it.  She's a really nice person.  We have become friends on a local blog site, through some charity work. The administrator is Republican/Tea Party and mostly Tea party types on there, with a few liberals scattered around.

Anyway, I've been trying to figure out what they are all about. Her big thing is that we need a smaller government.  I counter with the fact that our government is just people. People with jobs... people that would be unemployed if we had a smaller government.

I don't think she, or any of the others on there are convinced that the government is just made up of all of us.  It is an evil thing that lurks around every corner.  Her biggest thing she wants accomplished is...

getting rid of the Federal Reserve.  For the life of me never been able to get a straight answer as to why that would help us.  Are there any bankers on here. I've read up on it, but I'm not much good about financial issues, especially the Federal Reserve.   If we didn't have it, what would we have instead?  And what would be problems be if we got rid of it.

Her other things are that we pay too much taxes, 47% of the people pay no income taxes, and Obamacare is too expensive...

I just need some ammo... especially with the Federal Reserve stuff...  She is in the finance industry, not sure exactly what she does.  She comes off as pretty knowledgeable, however she gets off on tangents and I am totally lost. And I have 2 BS degrees, so I can learn...

If anyone has any information that can help me out with her, I'd sincerely appreciate it.

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Comment Preferences

  •  It's one of those firebagger/teabagger things (10+ / 0-)

    There's a bunch of weird objections to the Reserve that range from deeply stupid / misleading (it's a private corporation controlled by the banksters!) to the merely stupid (control over monetary policy should be vested in the President and Congress.)

    •  If you dig into the "logic" some of them (7+ / 0-)

      follow on why they want it abolished you find a whole lot of ugly. I'm not saying this person is knowingly part of that but I've seen/read the "evidence" the Ron Paul crowd believes on the conspiracy theories on the creation of the Federal Reserve. How it's part of a long history of Jewish bankers to take over the country and the world. It's some pretty sick stuff. Hell, I sat thru a movie version of their delusions. Here's my review of that turd fest from 2011.

      Spite is the ranch dressing Republicans slather on their salad of racism

      by ontheleftcoast on Fri Oct 18, 2013 at 06:27:33 AM PDT

      [ Parent ]

      •  The Bilderberg group (4+ / 0-)
        Recommended by:
        Oh Mary Oh, lordcopper, Ninepatch, Ahianne

        It's some global Jewish conspiracy.  I get it from my friends all the time.  Usually the more radical anarchist types who don't have a clue.  Those damn JOOS are behind everything.  It's not a coincidence that the same crowds who come up with this bullshit and spread it also happen to be the same crowds who embrace Stormfront as a legitimate website for needy information.  Ron Paul himself was a right wing racist who wrote for various hate rags.  

        This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

        by DisNoir36 on Fri Oct 18, 2013 at 06:43:00 AM PDT

        [ Parent ]

    •  Who exactly controls the Fed Reserve then? (2+ / 0-)
      Recommended by:
      Ninepatch, eyesoars

      Since you claim it's stupid/misleading to claim its a private corporation controlled by banksters.

      From Wikipedia

      The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors (or Federal Reserve Board), the Federal Open Market Committee (FOMC), twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous privately owned U.S. member banks and various advisory councils
      Seems to me that the privately owned banks have some power within the board.  


      the Federal Reserve System "is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms."[17]
      An independent central bank which has stocks traded is independent of the government with the government only  providing some oversight and power over who is chosen.

      When you boil it down, it seems like the Fed Reserve is AT BEST a quasi public/private corporation where various banksters have considerable sway.  So for you to call the assertion that it's a corporation controlled by banksters as stupid/misleading is not only condescending but misleading itself.  There is some validity to that claim.

      This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

      by DisNoir36 on Fri Oct 18, 2013 at 06:34:33 AM PDT

      [ Parent ]

      •  The governing board is appointed by the (3+ / 0-)
        Recommended by:
        Deep Texan, Oh Mary Oh, lordcopper


        The banksters have some advisory seats, as do representatives of consumers and industry.  They have no power or authority.

        The fed's stock is not traded.

        •  The governing board (3+ / 0-)
          Recommended by:
          Pescadero Bill, Ninepatch, grover

          Provides oversight of the Fed Reserve system.  The Governing board is not the Fed reserve system.

          The Banksters have 5 seats on the FOMC.

          The 12 Reserve Bank heads are not appointed by the president.  The bank presidents or CEO's of those 12 banks are voted on by the board of directors of those banks and approved by the Board of Governors.  Board of Directors are chosen by the regional fed bank shareholders, regions member banks and board of governors.   Member banks are banks who hold stocks in that regional fed bank.  Stocks cannot be sold or traded like public stock.  All nationally chartered banks own stock in their regional fed bank.  All regional fed banks  independent privately owned and locally controlled corporations.  

          We could go back and forth all day.  The fact is there is some legitimacy to the claims, albeit slight, and while it is true that they overlook other aspects of the unique nature of the Fed Reserve, to claim that banksters have no sway or power or authority is frankly naïve.  

          The Fed Reserve is a quasi public/private entity which in theory has various safeguards in place to prevent an overt amount of power by the banking community over the system.  However, considering how corrupted the political system has become by the banks, it's not a stretch to think that they have similar power over the fed reserve and the whole banking system.  Hypothetically the board of governors and the member banks would nominate board members who would represent the will of the public. In reality I doubt they're nominating John Q. Public to a seat but rather someone from inside the banking industry.

          This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

          by DisNoir36 on Fri Oct 18, 2013 at 07:18:18 AM PDT

          [ Parent ]

      •  Mixed feelings about the Fed (2+ / 0-)
        Recommended by:
        Ninepatch, Ahianne

        I definitely have mixed feelings about the role of the Fed, which has changed over the past 30 years.  

        Some history: until the early 60's the US was on the gold standard, which basically pegged the value of the dollar to a constant commodity.  Up to that time we had very little inflation--the value of the dollar only grew at the rate of real economic growth--and very few bubbles and busts cycles.

        Over the next 15 years the US (in stages) went completely off the gold standard (Nixon took it completely off in 1973), meaning that the value of the dollar could float--and float it did, so that now a dollar is worth roughly 3% of what it was worth in 1963.   In the intervening years we saw inflation rates as high as 15%--which meant that dollars were being printed much faster than the economy grows.  We also saw a continuous series of bubbles and busts (most recently: the tech bust in 2000; and housing bust in 2008) that have done huge damage to the poor and middle class and funneled huge wealth to the rich.

        Today we're "printing" over a trillion dollars per year that are not associated with anything solid--just pure monetary inflation.  Most of that eventually ends up in the hands of the very rich.  The only reason that cost inflation is low is because they tend to sit on it or send it abroad rather than putting it to work in the US.

        Since the 70's the Fed has been responsible for setting interest rates and for determining how many dollars we print.  The goals of the Fed are ostensibly to increase employment and to keep inflation low.  Its main tool is by controlling the money supply by money creation, and by setting interest rates.

        There are many who say that the Fed's interest rate policies have been egregiously favorable to the rich and those who invest in high-risk ventures, and unfavorable to prudent savers (eg, CD's and savings accounts).  I tend to agree--it is Fed policy (hand in hand with the repeal of Glass-Steagal) that has produced the tremendous wealth inequalities we see now.  It has funded non-productive investment (investing in pure financial vehicles--money betting on more money) rather than investment in things (infrastructure, physical production facilities), and it has completely fallen down on producing more jobs.

        So yes--the Fed is the means by which the rich and powerful multinational entities receive an endless supply of low-interest, risk-free cash, and use it for government guaranteed, high-risk, high profit, low-usefulness activities.  That shit needs to be reigned in.

        But that very role gives huge influence to an unelected group of people, which has spawned some crazy conspiracy theories.  The truth is bad enough even without the conspiracies--there's no need to invoke a secret Jewish Illuminati Bilderberg cabal when we have JP Morgan and Goldman Sachs doing plenty of damage right in front of our eyes.

        What we need is Elizabeth Warren-style Congressional oversight rather than the weak connivance we've had since Reagan.  We need to reinstate Glass Steagal so that banks can be boring and safe again like they were until the 80's.

        •  There were many booms, bubbles and busts WHILE (2+ / 0-)
          Recommended by:
          micsimov, eyesoars

          we were on the good standard too. Many livelihoods and personal assets lost while (usually, but not always) the rich got richer.

          It's just not as simple as you make it seem. We often don't look far enough back

          The South Sea Bubble, The Mississippi Land Scheme, the Darien Scheme, The Financial Crisis of 1785, Canal Mania and Duer's Panic of 1792, The Panic of 1797, The Panic of 1807, The Panic of 1819, The Panic of 1825, The Jacksonian Financial Crisis of 1837, The Financial Crisis of 1847, The Western Blizzard Panic of 1857, The Financial Crisis of 1860, The Silver Panic of 1866, The Panic of 1869, The Panic of 1873, The Financial Crisis of 1878, Grant's Last Panic of 1884, The Panic of 1890, The Silver Panic of 1896, The Panic of 1901, The Panic of 1907, The Financial Crisis of 1920, The Crash of 1929, The Great Depression, The Panic of 1937, The 1953 Recession, The 1958 Recession, The Kennedy Slide of 1962, The Johnson Erosion of 1966, The 1967 Oil Embargo, The 1973 Oil Crisis, The 1979 Energy Crisis, The Recession of 1982-83, Black Monday (October 19, 1987), The Junk Bond Recession (1988-92), The Third Energy Crisis (1990), Black Wednesday (1992), The Mini Crash of October 27, 1997, The Slide of '98, The Dot Com Bubble (2001), The 9/11 Slide, The Emerging Markets Correction of May, 2006, The Great Stock Market Draw Down (August, 2007), The Grand Dow Slide of October 19, 2007, The Mortgage Crisis (2008)
          This interesting lecture explains that financial instability resulting from gold (and silver) was a problem too.

          Humans remember recent history more than long-ago history, and the average American certainly thinks that the 1970s inflation was worse than the panics of the 1870s, having in most cases, zero idea what those were.

          © grover

          So if you get hit by a bus tonight, would you be satisfied with how you spent today, your last day on earth? Live like tomorrow is never guaranteed, because it's not. -- Me.

          by grover on Fri Oct 18, 2013 at 11:20:57 AM PDT

          [ Parent ]

          •  It was the panics (2+ / 0-)
            Recommended by:
            micsimov, eyesoars

            of the late 1800's and early 1900's that were the incentive to implement the Fed.  After 1913 (with the exception of the Great Depression, which was global in scope), the recessions and blips were much less severe than before.  The fed HAS acted to smooth out some of the instabilities in our economy.  It wasn't until the Glass-Steagal repeal though, that banks were able to arbitrage unlimited funds and were allowed to take risks with their depositors' money; that's when things started getting very volatile again.

            I agree with some of what you say--it's certainly more complex than what fit in a comment (or in a single book).  But the period between the founding of the fed and the repeal of Glass Steagal (again, excepting the Great Depression) were some of the smoothest economically the US has seen.

            The ability of the fed to set interest rates allowed them to "take away the punch bowl" when the economy got too hot, and to make cheap money available when it slowed.  In fact many say that the fed was too slow to lower rates during the depression; then after they lowered them, they raised them again too soon (in 1937, causing a 2nd dip).

      •  Sent to Top Comments (1+ / 0-)
        Recommended by:

        Whether you agree, disagree, understand or don't have a clue about the subject at hand, this is the kind of discussion that makes DailyKos great.  

        I now know something I didn't know before thanks to the 3 of you in this thread.


        Creativity is intelligence having fun.

        by Ninepatch on Fri Oct 18, 2013 at 09:38:15 AM PDT

        [ Parent ]

    •  Who all hates me some Federal Reserve? (3+ / 0-)
      Recommended by:
      Oh Mary Oh, lordcopper, grover

      I've always been a bit bemused by the wide spectrum of individuals who have a beef with the Fed. It seems to range all the way from the far right - even beyond the Tea Partiers to the more centrist  libertarians to the far left anarchists and communists. And it doesn't seem to be a group united kind of belief, either (except possibly for the communists and anarchists). I think many if not most libertarians and Tea Partiers are fairly comfortable with the Fed. They just have a boatload of other grumpy issues with federal government in general.

  •  I didn't know that this was 'a thing' (10+ / 0-)

    but apparently it is.

    From Abolish the Federal

    Despite what many people think . . . the Federal reserve is NOT . . . an agency of the United States government.

    They are no more a part of the Federal government than is Federal Express. The Federal Reserve is actually a privately owned corporation, owned by a secret group of international bankers. In essence, they are a private banking cartel who have a total monopoly on "creating" money for the U.S. government. The Fed's only real agenda is to turn a profit . . . and they do so . . . at the expense of every single man, woman and child living in the U.S.A..

    The goal of this movement seems to be "prospering in a tax free society, with all our liberties and rights in tact, as our founding fathers intended."

    I'd like to see how much they 'prosper' with no roads, bridges or clean water.

  •  Nice as tea partiers may be (51+ / 0-)

    They have never been credible to me. The first Taxed Enough Already march on the Washington mall was on April 15, 2009,  on a day when a Democratic President, House and Senate passed the largest tax break in modern memory, for 95% of Americans.

    The Tea Party awakened on that day, not on any single day during the profligate spending days of the Bush administration. That is just not credible.

    The Tea Party supposedly want a smaller government but the target of their ire is not the Patriot Act, which expanded the government exponentially. Their target is not the defense budget.

    Their targets are healthcare reform and earned benefits like Medicare and Social Security--all Medicare and Social Security, except theirs, which they earned.

    I will never buy what the Tea Party is selling, no matter how nice the salespeople are.

    "I am not interested in picking up crumbs of compassion thrown from the table of someone who considers himself my master. I want the full menu of rights." (From "You Said a Mouthful" by Bishop Desmond Tutu - South African bishop & activist, b.1931)

    by FiredUpInCA on Fri Oct 18, 2013 at 05:18:36 AM PDT

  •  first question for her is if she or any of her (6+ / 0-)

    family receive public assistance or maybe if she supports the return of toll roads or maybe privatizing fire protection or perhaps doing away with professional certifications.  these are all Libertarians hobby horses

  •  get rid of the Federal Reserve (6+ / 0-)

    Does she know what that would mean? Does she know what the consequences would be?

    Of course, the answer to both is "No!". No one knows what the consequences would be but I am guessing they wouldn't be very good at all. These people think with fairy dust in their brains. They hear some idiot spouting this crap and they latch onto it like repeating a mantra, never really thinking of the consequences.

    Goddamit those people just fucking infuriate the crap out of me ! ! !

  •  People Do Not Pay Taxes (21+ / 0-)

    They are elderly and on a fixed income
    They are young, students and dependents
    They are either unemployed, under employed or poorly compensated.
    They are very rich and take liberties with the tax code.

    Ala carte conservative libertarians can be some of the most frustrating and confounding people to deal with.   The can be quite schizophrenic, swing wildly from seeming rational to bizarre claims and arguments with no discernible logic.

    Without music to decorate it, time is just a bunch of boring production deadlines or dates by which bills must be paid. ~ Frank Zappa ~

    by NCTim on Fri Oct 18, 2013 at 05:25:41 AM PDT

  •  You don't need ammo (14+ / 0-)

    Dont get into a policy debate with her about the Federal Reserve.  Odds are, she doesn't know exactly why she thinks it needs to go except that its part of Washington, DC its not elected, its controlled by bankers and other conspiracy theories.  It will devolve to nonsense about fiat currency, gold standards, the Constitution, Foreign Aid and $74 TRILLION dollars that we "really owe" to other countries.

    She is not making a specific argument about monetary policy and inter-bank trading regulations... she's just projecting her frustration.

    But if you really want to get into it, you need to read some of Milton Friedman's contentions that the Federal Reserve in its infancy (it was only created in 1913) was responsible for the Great Depression by failing to properly respond to the crash of 1929 and contracting currency reserves instead of propping up banks.  (Ben Bernake, a noted scholar of the Depression Era, actually agrees with this assessment)

    The Austrian School of Economics (the new North Star of Teagbagistahn) actually views the existence of any centralized Federal Reserve as a market inhibitor that exerts unwarranted and interfering force in what otherwise would be a free and open market.

    This coupled with the fact that the Board is appointed rather than elected, it deals only with banks not American people, and is involved with things most people don't understand creates a fertile environment for conspiracy theories.

    I will say that even Krugman has been critical of the fact that the Fed has so much power of the American Economy (which is the world's largest) that whatever school of thought or interpretation of economic theory the Chairman takes becomes the de facto "Truth" and challenging it, even in the abstract, is interpreted and portrayed as an attack on the American Economy itself.  Krugman points to the fact that he was blacklisted from the Fed's annual meetings after criticizing Alan Greenspan

    Красота спасет мир --F. Dostoevsky

    by Wisper on Fri Oct 18, 2013 at 05:33:30 AM PDT

  •  ucch, they probably talk self-righteously (2+ / 0-)
    Recommended by:
    Pluto, Oh Mary Oh

    about the Federalist Papers on that website.

    Ayn sucks. Please know I am not rude. I cannot rec anything from this browser. When I rec or post diaries I am a guest at some exotic locale's computer.

    by Floyd Blue on Fri Oct 18, 2013 at 05:41:15 AM PDT

  •  Tea party persons are dumb (2+ / 0-)
    Recommended by:
    titotitotito, lordcopper

    These are the people who were lucky to scratch out a C once in a while in school as their best grade.  

    They don't think.  They've just heard "smaller gubmint" since St. Ronnie's installation, that it fits right in there with "apple pie" and "motherhood".

    "Federal reserve" is another buzz phrase of theirs, and it can't be up to any good.  Not a single one of them could tell you: when it was started, by whom, what it does, or who runs it.  

    When the Tea Party was first getting started, I met someone who was a fan of theirs, planned on getting very involved with it.  He was dumb as a stump. Had no idea, could not reason it out, that cutting back gubmint would mean that his job as a firefighter would have to go.  

    Tea party people are walking examples of the Dunning-Kruger effect and have no idea how ignorant they actually are.  They are the reason that governments pass laws protecting people from themselves, and they resent it.  They want to go on doing dumb things, and suffering the consequences.  

    They really are a good reason to bring back literacy or aptitude tests for voting.  If people this ignorant are part of the voting public, there is no hope for progress in the future.

    •  some are very smart (1+ / 0-)
      Recommended by:
      johnny wurster

      Sure, they may believe things that don't make a lick of sense, but what else is new?

      "I am not sure how we got here, but then, I am not really sure where we are." -Susan from 29

      by HudsonValleyMark on Fri Oct 18, 2013 at 05:51:16 AM PDT

      [ Parent ]

    •  This comment is simple-minded/a written Dunning- (1+ / 0-)
      Recommended by:

      Kruger example.
      You've broad-brushed a group of 10 million or so people.

      TPers are not all dumb/C-or-below students/they do think.
      The adage "don't talk about politics and religion" exists because these are, for most people, not based on rational and factual underpinnings but are based on deeply held irrational BELIEFS.

      For example:
      Paul Erlich wrote in 1968:
      "The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death..."

      Many educated liberal/eco types believed this. Perhaps you can tell me why?

      Or Freeman Dyson is quoted as saying re:climate scientists:
      "'I just think they don’t understand the climate,' he said of climatologists. “Their computer models are full of fudge factors.''

      ....which is a dopey statement from the person who inherited Einstein's position at Princeton.

      Or "Harry Reid has no balls" which I've read here at dKos and elsewhere written by liberal/progressive types many times.
      Is this a fact?

      People of all stripes believe things that are wrong. Further, I'm sure that there are many capable TPers with high competence with certain skills or topics.

      •  Collect the data and prove me wrong. (0+ / 0-)

        My hypothesis is: a statistically large enough sample of Tea Partiers, when compared to the general population:

        a) did worse in school
        b) score lower on aptitude and intelligence tests and
        c) believe in more things that are demonstrably untrue.

        I won't be doing any data collection to prove my hypotheses, as Tea Partiers are not worth my time.  

        Good day to you.

  •  That 47% don't pay *federal income* taxes, but (8+ / 0-)

    they definitely do pay taxes of various kinds. You could share my photo diary with her, to help her understand what kinds of people don't pay federal income tax:

    Feckless Moochers

    Is it true? Is it kind? Is it necessary? . . . and respect the dignity of every human being.

    by Wee Mama on Fri Oct 18, 2013 at 05:43:41 AM PDT

  •  It's good that you're friends but... (8+ / 0-)

    my advice is don't waste your time arguing politics.

    I'm not paranoid or anything. Everyone just thinks I am.

    by Jim Riggs on Fri Oct 18, 2013 at 05:44:51 AM PDT

  •  You have my deepest sympathy (2+ / 0-)
    Recommended by:
    mathGuyNTulsa, Oh Mary Oh

    Being friends with a tea person has got to be hard to do. Every one of them that I know is beyond hope when it comes to making any sense at all. Good luck you will need it!!!!

  •  Growth, baggers are clueless on econ growth. (3+ / 0-)
    Recommended by:
    mathGuyNTulsa, AnnieR, Oh Mary Oh

    We do a poor job educating people on basic macro-economics. I would tell her that monetary policy and fiscal policy are economic growth. They've been massively mislead. Some of it comes from equally dumb rich people that want to pay no taxes and that have no clue how monetary policy works.

  •  All countries that have currencies (9+ / 0-)

    ...have central banks. Without a central bank to exchange currencies, trade between nations would be impossible. The Federal Reserve is the name of the US Central bank. It is non commercial. All central banks operate pretty much the same way. You can read about them here.

    The low info right wing gets obsessed with the strangest things that they don't understand in the least. I think they get it from hate radio -- these abstract things they learn to hate with great emotion.

    I had a right wing friend, too, who was very nice. And every once in while he would come up with one of these cockamamie hate fixations. The first time it happened, it was the post office. The post office was evil and it was ruining America. At first I didn't connect it to hate radio. But later, I was told that it was evil because it was losing money and the government had to subsidize it.

    Later, the object of hate was Amtrak, but by then I was used to it. All government subsidized services, like transportation or postal communication or the central bank, were rotten things that were ruining America.

    As far as I can tell, he never grasped how and why these services are run by all governments -- mostly, he seemed satisfied to feel hate and rage toward them.

    I just looked at it like a crackpot eccentricity and laughed it off. It's pretty common propaganda delivered by the hate jockeys -- but the folks who buy into it never seem to have a clue what it's all about. That's why you see them carrying those funny signs like "Keep government hands off my Medicare!"

    There's no cognitive activity going on at all. It's purely Pavlovian conditioning.

    I just ignored it.

    [ O Recommend   O Hide   O Bitch about this at the Help Desk ]

    by Pluto on Fri Oct 18, 2013 at 06:06:54 AM PDT

  •  Anyone who spends pays taxes. (2+ / 0-)
    Recommended by:
    Oh Mary Oh, Ninepatch

    The first time your kid gets an allowance and goes into a store to buy a toy for themselves, they pay taxes.

    And pretty much everybody who gets a paycheck pays taxes for social security, medicare, etc.  (In some jobs you don't pay into SS, because you're paying into an alternate plan, but then you're not getting SS 'vesting credits' either during that time.  Don't get enough credits, and you won't qualify for SS.

    So no, there aren't 47% who 'don t pay taxes'.  There are 47% who are paid too little to pay federal income tax.  You want them to all pay (federal income) taxes?  Pay them enough for them to be taxed.  Raise the minimum wage to the point where every single person working a minimum wage job will make enough to pay federal income tax.

    And if she 'pays too much tax', tell her to get rid of enough of her income to be 'one of the 47%'.  If she 'pays too much tax', would she rather pay the tax or have that little income?

    I can't help you on Obamacare, I haven't been able to get far enough onto the site to find out what it's going to cost.

    •  The irony is... (1+ / 0-)
      Recommended by:

      The real irony is that it was these same conservative Republicans who (during the Bush administration) implemented huge tax cuts for middle-income people, so that most no longer had to pay taxes.  At the same time they cut taxes for the rich, which created enormous deficits and gave the rich lots of money to play with overseas.

      So here we are 10 years later, and the main Tea Party bitches are: not enough people paying federal taxes, high deficits, and jobs moving offshore.  

      I really don't know whether they're stupid or mendacious.  But it's definitely one of those.

  •  Your friend (4+ / 0-)
    Recommended by:
    Pluto, AnnieR, titotitotito, Oh Mary Oh

    doesn't really know the first thing about the Fed. If she cannot explain to you why it needs to be abolished then what makes you think you could explain why it needs to remain.

    I suggest you avoid such conversations if you value her friendship.

    Wisper's comment a few slots above this one nails it on the head.

    Honesty may be the best policy, but it's important to remember that apparently, by elimination, dishonesty is the second-best policy.

    by fauxrs on Fri Oct 18, 2013 at 06:26:14 AM PDT

  •  The Right is immune to evidence-based arguments (7+ / 0-)

    However, if you want information on taxes, this article is pretty good:

    The percentage of households not paying income tax is always higher when unemployment is high. However, there will always be retirees, poor people, students, and others who do not pay income taxes. Virtually all of these do pay other taxes, including state and local taxes.

    Corporate income taxes as percentage of federal revenues have plummeted over the last fifty years, while payroll taxes paid by the 99% have exploded. See chart #2 in the link above

    The answers in posts above on the Federal Reserve's function are clear and to the point. Without the Federal Reserve or something that fills exactly the function it fills, there would be chaos in financial markets.  They weren't called "panics" for nothing in the late 19th century, when we had no central regulation of banking or our monetary and financial system, except for whatever the titans of Wall Street wanted.  They'd get in speculation and take-over battles, the economy would crash, and everyone would suffter.  Central banks give stability to inherently unstable markets.

    However, these are facts that won't fit on a bumper sticker and are unlikely to impress a Tea partier.  My best advice is don't argue with them: their minds are made up, and they will cherry-pick half-truths that support what they want to believe: that gubmint is bad.  It's called confirmation bias.

    Robert Heinlein said it:  Don't try to teach a pig to sing.  It's a waste of time and it annoys the pig.  

    Any sufficiently advanced technology is indistinguishable from magic. -- Arthur C. Clarke

    by mathGuyNTulsa on Fri Oct 18, 2013 at 06:30:55 AM PDT

  •   The federal reserve was created (5+ / 0-)

    when bankers voluntarily bailed out the government in the early 20th century.  Many of them were private companies, some publicly traded.

    Wall street/Republicans favored a single private central bank, the compromise being having a board of directors instead of one dude running it. Progressive Democrats wanted straight up currency printed and controlled by the government, eliminating future influence of any banks in the currency.  Conservative Democrats wanted all wall street banks out of the currency business, and to set up a new central bank, to bust up the existing center of power.

    Wilson got elected and between him and both houses of congress what you got was a strange hybrid compromise.  Seriously, it's a lot like how the ACA was passed and has a lot of the weird public/private stuff.

    Progressives got currency issued by govt
    Conservadems got decentralized banking, by setting up the reserve districts
    Republicans/Wall street got most of the rest of what they wanted, and the most powerful and influential of the reserve districts was and to some extent remains, the New York one.
    Wilson got to appoint the chairman of the board, which sets baseline interest rates, a privilege still in action and important to this day.

    There are a bunch of later acts that modified it, but that's the basic idea.  The Fed prevents the US govt from running out of money and controls how it is made available to banks.  It is in fact a shadowy oligarchy backed by the same banks it supports and that doesn't answer to Congress at all, beyond senate confirmations of appointees and even the presidential appointees do not entirely control what it does, and was created in secret conferences for the most part, although its final charter is public.

    It's an odd duck.  It has, however, worked pretty damn well since the panic of 1907, at least no worse that other banking systems until the 30s.  It was indirectly affected by Glass Steagal (because it's made up of banks) and more significantly by the various alterations to the gold standard ending.   In the late 70s they had to start publishing their objectives, including where they set interest rates (it was secret up till then).

  •  Thanks for all the comments... (2+ / 0-)
    Recommended by:
    Oh Mary Oh, AlyoshaKaramazov

    very helpful!

  •  Thanks for sharing nt (0+ / 0-)

    nosotros no somos estúpidos

    by a2nite on Fri Oct 18, 2013 at 07:14:36 AM PDT

  • (1+ / 0-)
    Recommended by:

    I refer people to their website and point out the .gov extension at the end of the web address.  It wouldn't be there if the Fed was truly a privately owned entity as most End-the-Fed believers insist.

    The Fed operated for decades without attracting much attention.  As soon as the economy melted down in 2008 people wanted to know who was responsible.  Business corporations like Lehman Brothers and AIG were considered the culprits.  

    Then something interesting happened.  Blame shifted to the public sector.  Lenient regulators at the SEC, Freddie and Fannie which, like the Fed, combined elements of the public and private sector, and of course, Democrats, even though the Republicans had majorities in Congress from 1995-2007.  

    All sorts of stories about the Fed appeared at that time.  I learned to steer clear. Libertarians have a fundamental disagreement with the Fed which was created by the Federal Reserve Act of 1913.  The 16th Amendment which authorized the collection of federal income tax was ratified that year, too.  To libertarians both of these represent a federal government that overstepped its bounds and even 100 years later they want to roll them back.

    There is no existence without doubt.

    by Mark Lippman on Fri Oct 18, 2013 at 08:22:08 AM PDT

  •  Tell her she's simple-minded, wrong, and brain- (0+ / 0-)

    washed. Tell her to look into the negatives of Mitt Romney's campaign, and his business methods, and that will explain a lot.
    It's all out there for her to see. The "federal reserve this, big gov. that, poor black people on welfare stealing all our money, etc." are all just part of the "shiny object" strategy employed by the 1% and their gop punks.

    You can't make this stuff up.

    by David54 on Fri Oct 18, 2013 at 08:43:52 AM PDT

    •  Who on earth would be receptive to being told: (2+ / 0-)
      Recommended by:
      grover, nookular

      "You are simple-minded, wrong, and brain-

      Nobody. (rough estimate)

      •  Actually, I think your answer is very (0+ / 0-)

        Accurate (plus or minus one person).

        © grover

        So if you get hit by a bus tonight, would you be satisfied with how you spent today, your last day on earth? Live like tomorrow is never guaranteed, because it's not. -- Me.

        by grover on Fri Oct 18, 2013 at 11:46:18 AM PDT

        [ Parent ]

      •  I should have added a snark tag, although I think (0+ / 0-)

        my analysis was correct. I have family members like that, I just tolerate them. I share thought provoking articles on FB sometime in the hope they might read them, but I try not to be a zealot or talk down to them about it.

        You can't make this stuff up.

        by David54 on Fri Oct 18, 2013 at 07:15:20 PM PDT

        [ Parent ]

  •  About those people paying no taxes (0+ / 0-)

    I came across an excellent analysis by experts of the "47%" paying no taxes. I don't have time to track it down right now, and the data probably is too complicated to provide a bumper-stick type of response to her.

    Before I start on income taxes, I will point out that nobody living in the United States is failing to pay taxes, not unless they live off the grid, probably in the wilderness, eating berries. I was going to add squirrels and venison, but you'd have to buy ammo for that, and you'll probably pay sales tax on the ammo.

    Everybody with a job pays about 12%  of their wages into payroll deductions. People pay state and local sales tax, personal property tax, real property tax, and on and on.

    Some of what the analysts said:

    The 47% was calculated in 2009. Normally, it is lower than that. The reason it was much higher in 2009 was that it was in the Bush Great Recession. People who lost their jobs had lower income for the year, some enough to drop them to not owing income taxes.

    In addition, the early Obama Tax Breaks came into effect, which helped some taxpayers get to the point of not owing federal taxes. I believe those breaks included higher education deductions, so families with kids in university owed less tax. Imagine families with job losses AND kids in university.

    These categories covered people who probably have paid federal income tax their whole working lives. Anyone who finds fault with someone blindsided by the Bush Recession is just wrong-headed.

    There is a steady group of people, with changing membership due to death, that will always constitute about 10% (something like that) who don't owe federal tax: seniors whose only income is Social Security. Most seniors are in this boat. (The analysis said how many; I've forgotten.) What's the point of asking them to pay taxes? We'd just have to increase Social Security so they would have money to pay taxes on it. If they're on Social Security, they've paid taxes for a lot of years.

    Most of the individuals who don't pay taxes in any one year will pay them in other years. Even people who are quite low income move in and out of paying taxes, in much the same way that huge corporations with billions in profit every year move in and out of paying taxes, except that the corporations have buckets of money and poor people don't.

    Students who are over 18, adults, but attending post-secondary education, tend to have low incomes from summer jobs and part-time jobs. A lot of them are subsidized by their families.

    Do we really want those people to leave school and get jobs, at modest wages, just so they won't be in the "no federal income tax" category for a few years? Or is it better to look at their lifetime earnings (and taxes) and encourage them to stay in school, get their degrees, and, hopefully, have long careers with higher contributions to the tax?

    The student group will be constant, but with changing membership.

    Another group that has a fair number of people not owing taxes: families with a lot of kids. There aren't all that many of them these days. Do we really want to reduce the deductions for children so that their parents will have to pay taxes? This is another group with changing membership, not a permanent class of non-payers. But they do pay plenty of state and local sales tax!

    If you look at what is a more normal figure--probably closer to 40%--and delete the 10% of seniors, that means that in any one year about 30% do not owe federal income tax.

    Mostly, for all categories, there are different individuals each year, except for the seniors who join at 65 and leave at death.

    Me, I'm a repeat customer: I almost never owe U.S. income taxes. I live in Canada and pay more income tax here than I'd pay in the U.S. With the tax credits and deduction for foreign earned income, I don't owe anything in the U.S. but I do have to file.

    It is estimated that about seven million U.S. citizens, adults, live outside the U.S. Our group probably represents a chunk of those non-payers.

    Somewhere, I came across a chart showing the percentage of people in each income group not paying taxes. Shockingly, in the high income group--people reporting hundreds of thousands a year--that percentage was not zero. It was like 1% or so, but why is it anything over zero? I don't know how that came to be, but it would definitely be good to look at what in the tax law allows high income people to pay no taxes.

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