# Why do libertarians always want to abolish the FEDERAL RESERVE **URL:** \ **Category:** Great Debates\ **Created:** [December 14, 2018, 4:06pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124 "2018-12-14T16:06:55Z")\ **Posts on this page:** 20\ **Page:** 13
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [December 27, 2018, 1:53pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/241 "2018-12-27T13:53:05Z")
> [@Kamaski](#): > > Why don’t we have a system based on creating REAL WEALTH, not imaginary wealth. Credit is not real wealth. > > Let’s say I have a machine inherited from god that is capable of cutting 10 large logs per day. These are the nicest logs in the world, cut from the best trees. > > It only costs $500 a day in fuel to run the machine, but the logs are worth much more, maybe $50,000 > > I have created real wealth, I have a machine that can be run very cheaply and can generate assets worth a great deal, that can help everyone. > I can do many things with these logs. I can use them to make a bridge, a house, a building, a hospital. Or I can save the logs for later. It only costs maybe one log a day to keep the machine running, and I can easily make 10 logs a day. > > The logs are the real wealth. Taking the logs from me and loaning them out to somebody while collecting interest does nothing, except make the person who loaned them out rich. > Loaning my logs does not make the country wealthier, it does not create schools, roads, or bridges. > The real wealth was created by the people in my log plant who cut the logs so masterfully. They are the real heros who created real wealth. Meanwhile, back in reality, where did you get the capital to create that machine? If you didn’t have millions in R&D cash lying around, chances are to had to take out a loan. Now where did that loan come from? In reality, you don’t inherit machines from god. It takes money to make money, and one of the vital roles that banks pay is providing services to help keep cash flowing. Without starting capital (which none but the obscenely rich can offer out-of-pocket), your idea will remain just that - an idea. Yeah, it’s a shame that, in capitalism, the banks are a necessary and expensive middle-man. But they are definitely necessary in any capitalistic system, and without them the economy would absolutely grind to a halt. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [December 27, 2018, 2:24pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/242 "2018-12-27T14:24:14Z")
> [@Kamaski](#): > > Let’s say I have a machine inherited from god that is capable of cutting 10 large logs per day. These are the nicest logs in the world, cut from the best trees. We could call your magical machine a “deus ex machina” or, more simply, a sawmill. And these people who are buying your logs to build their houses, how do they afford it? Most people don’t have the money needed to build a house in one lump sum. So instead perhaps another person (let’s call him a “moneylender” or a “banker”) gets the idea to “lend” money to them, which the new homeowner pays back over time. Without the banker, just how many logs do you think you’ll sell? And don’t think you’re somehow morally superior in all this. Your hypothetical wealth comes from cutting down trees in the forest, thereby depriving birds and squirrels of a place to live and people of a source of shade. ---
**Author:** ![Kamaski](https://avatars.discourse-cdn.com/v4/letter/k/9d8465/32.png) [@Kamaski](https://boards.straightdope.com/u/Kamaski)\ **Post date:** [December 27, 2018, 2:50pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/243 "2018-12-27T14:50:18Z")
I agree with you 100%. Very good post. But why is it necessary for me me to sell the logs at all? I have been given something from god, a machine that can be run very cheaply and produce things worth many times the cost it takes to run. Like 100 times more. Or maybe even 1000 times more. This machine has immense power. If I had more machines like this, perhaps it would be possible to build a city. Why sell them? Why not use the logs I have accumulated to build houses where people can live. For free. No rent, no mortgage, no bullshit. Just use the logs the build houses and let people live in them. And then possibly, maybe, in the long-distance future, if I was smart enough, build another machine capable of doing the same thing, basically replicate the machine. I agree with you 100% about the environment, by cutting down the forest I am robbing the plant and animal life of a home. To build a home for human beings. That is a moral dilemma, something that I must deal with. ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [December 27, 2018, 3:05pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/244 "2018-12-27T15:05:30Z")
I uh… I’m not entirely sure what the point of this thought exercise is. Is it to try to demonstrate that there’s something wrong with capitalism? Or do you need an ELI5 on how the economy works? ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [December 27, 2018, 3:22pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/245 "2018-12-27T15:22:30Z")
> [@Kamaski](#): > > Why sell them? Why not use the logs I have accumulated to build houses where people can live. For free. No rent, no mortgage, no bullshit. Just use the logs the build houses and let people live in them. Well, people don’t usually like sleeping and sitting on a dirt floor. Or not having a door to keep out the forest creatures looking for a home now that someone cut down theirs. Or heat in the winter. Or a kitchen in which to prepare their meals and a toilet in which to expel the results of those meals. In short, the many, many things not provided by your magical sawmill. Plus all of your mill workers quit to go work for the other guy who actually pays them in actual money. Why do you hate capitalism? ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [December 27, 2018, 4:03pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/246 "2018-12-27T16:03:41Z")
I was 100% convinced it would end up here when the earlier explanations were skipped over… it can be guessed the patience for the long play ran out. ---
**Author:** ![John\_Stamos\_Left\_Ear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_stamos_left_ear/32/3198_2.png) [@John\_Stamos\_Left\_Ear](https://boards.straightdope.com/u/John_Stamos_Left_Ear)\ **Post date:** [December 27, 2018, 4:42pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/247 "2018-12-27T16:42:13Z")
> [@Ramira](#): > > I was 100% convinced it would end up here when the earlier explanations were skipped over… > > it can be guessed the patience for the long play ran out. Economics is hard! ---
**Author:** ![Kamaski](https://avatars.discourse-cdn.com/v4/letter/k/9d8465/32.png) [@Kamaski](https://boards.straightdope.com/u/Kamaski)\ **Post date:** [December 27, 2018, 5:09pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/248 "2018-12-27T17:09:34Z")
I’m not against capitalism, simply trying to understand the economic system. What I’m saying that the way wealth is created is by EXCESS PRODUCTION. That’s what America was built on, when America was more honest and had more honest leaders. The skyscrapers of Manhattan represent the wealth of America, REAL WEALTH, not numbers on a computer screen. What’s the point of having $5,043 in bank account, when you know that probably all of that money has been lended out, not currently available? That money is making a banking executive rich, not you. What would you rather own, a Manhattan skyscraper or the amount that the skyscraper is worth in dollar bills? I would rather own the skyscraper, because what it made out of, brick, stone, steel has real lasting value. Not peices of paper money which can be made worthless. ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [December 27, 2018, 5:18pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/249 "2018-12-27T17:18:10Z")
Buddy, if you need someone to take those worthless pieces of paper off your hands, just let me know. 😃 ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 27, 2018, 5:21pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/250 "2018-12-27T17:21:26Z")
> [@Kamaski](#): > > What’s the point of having $5,043 in bank account, when you know that probably all of that money has been lended out, not currently available? That money is making a banking executive rich, not you. … I would rather own the skyscraper, because what it made out of, brick, stone, steel has real lasting value. Not peices of paper money which can be made worthless. **So, what exactly is stopping you from withdrawing your $5,043 and spending it on bricks, stones and steel?** PS: “[del]probably all[/del] _perhaps 90% — Google “reserve requirement”_ — of that money has been lended out.” ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [December 27, 2018, 5:24pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/251 "2018-12-27T17:24:52Z")
Also, you absolutely can withdraw your whole bank account balance in almost all cases. That’s because the bank is also holding on to at least 10% of everyone else’s money. So barring a bank run where everyone decides at once to withdraw everything (something that stopped happening after the creation of the federal reserve), you absolutely can reinvest every penny in your bank account in, say, gold bars to stash under your mattress. ---
**Author:** ![Andy\_L](https://avatars.discourse-cdn.com/v4/letter/a/c67d28/32.png) [@Andy\_L](https://boards.straightdope.com/u/Andy_L)\ **Post date:** [December 27, 2018, 5:26pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/252 "2018-12-27T17:26:26Z")
> [@Kamaski](#): > > What would you rather own, a Manhattan skyscraper or the amount that the skyscraper is worth in dollar bills? I would rather own the skyscraper, because what it made out of, brick, stone, steel has real lasting value. Not peices of paper money which can be made worthless. If you own a skyscraper, and no pieces of paper, how do you eat? ---
**Author:** ![Kamaski](https://avatars.discourse-cdn.com/v4/letter/k/9d8465/32.png) [@Kamaski](https://boards.straightdope.com/u/Kamaski)\ **Post date:** [December 27, 2018, 5:33pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/253 "2018-12-27T17:33:29Z")
Btw, I think that 40 Wall Street, a skyscraper that Donald Trump owns, is by far his best business enterprise, generating something like 2000% profit. All his other buildings and business enterprises, trump steaks, trump casino, trump golf course, trump university, etc generate far less profit or have gone bankrupt. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 27, 2018, 7:20pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/254 "2018-12-27T19:20:03Z")
> [@Kamaski](#): > > What would you rather own, a Manhattan skyscraper or the amount that the skyscraper is worth in dollar bills? I would rather own the skyscraper, because what it made out of, brick, stone, steel has real lasting value. Not peices of paper money which can be made worthless. You think the owners of buildings in Chinese ghost cities have it good? You think the value of a skyscraper can’t go down? Having the money means you can diversify your investment portfolio. Having a skyscraper means all your assets are in one basket. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [December 27, 2018, 8:15pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/255 "2018-12-27T20:15:29Z")
> [@Kamaski](#): > > Btw, I think that 40 Wall Street, a skyscraper that Donald Trump owns, is by far his best business enterprise, generating something like 2000% profit. > > All his other buildings and business enterprises, trump steaks, trump casino, trump golf course, trump university, etc generate far less profit or have gone bankrupt. Wow. You really are all over the place in this thread. First, you’re asking about libertarian attitudes towards the Federal Reserve System, then you’re taking about the profitability of the banking business, then about a magical sawmill with which you can build houses for no cost, then you’re on about Donald Trump and his real estate investments. ---
**Author:** ![Ramira](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ramira/32/344_2.png) [@Ramira](https://boards.straightdope.com/u/Ramira)\ **Post date:** [December 27, 2018, 8:32pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/256 "2018-12-27T20:32:55Z")
> [@Dewey\_Finn](#): > > Wow. You really are all over the place in this thread. First, you’re asking about libertarian attitudes towards the Federal Reserve System, then you’re taking about the profitability of the banking business, then about a magical sawmill with which you can build houses for no cost, then you’re on about Donald Trump and his real estate investments. with apparently using without any reflection the numbers that the very accurate and never completely lying Mr Trump asserts. ---
**Author:** ![Kamaski](https://avatars.discourse-cdn.com/v4/letter/k/9d8465/32.png) [@Kamaski](https://boards.straightdope.com/u/Kamaski)\ **Post date:** [December 27, 2018, 8:42pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/257 "2018-12-27T20:42:38Z")
Well the Chinese are building buildings without any tenants to occupy them right? Kinda like what happened with the Empire State Building. The company that built the ESB was heavily in debt when the building opened in 1931, as it had to borrow trenendous amounts from the banks to get the need funds for all the building materials. However the depositors, the people who have their money to the bank to support the loans needed, lost confidence while the building was still under construction, and all of them tried to pull their money out at once. However the bank didn’t have their money, because they loaned it all to the builders so that they could buy the necessary building materials. When the building opened in 1931 they couldn’t get any tenants because nobody could afford to rent out a floor of the Empire State Building. Since all the people/companies who could afford it had lost all their money in the crash of ‘29. And the reason the crash happened in the first place was people lending their money to support a giant building boom which couldn’t be afforded to be paid back!! So the banks are a kind of weird middle man who create/prolong boom and bust cycles in the economy. And the FED basically adds fuel the the fire by not allowing them to fail. ---
**Author:** ![Kamaski](https://avatars.discourse-cdn.com/v4/letter/k/9d8465/32.png) [@Kamaski](https://boards.straightdope.com/u/Kamaski)\ **Post date:** [December 27, 2018, 8:47pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/258 "2018-12-27T20:47:06Z")
AND the bankers can make a buck, while the majority of the populace loses a buck. That’s the main problem with them. It happened in 2008. I’m not sure if the FED can make buck, since I don’t understand if they are public or private, I don’t think anybody knows. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [December 27, 2018, 9:02pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/259 "2018-12-27T21:02:05Z")
Wow. So you’re just ignoring all of the many replies to your thread that have attempted to explain things like whether the “FED” is public or private? Good to know. I’m sure any threads you start in the future will get a similar amount of attention. ---
**Author:** ![Kamaski](https://avatars.discourse-cdn.com/v4/letter/k/9d8465/32.png) [@Kamaski](https://boards.straightdope.com/u/Kamaski)\ **Post date:** [December 27, 2018, 9:12pm UTC](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124/260 "2018-12-27T21:12:15Z")
Maybe the FED should have a clear mission statement and explain itself to the American people, including who owns it, what it does, why it’s needed? And who are it’s board of directors and its relationship with other countries? I think your average American understands what a bank is, but most have no clue about the FED. [Previous page](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124.md?page=12) [Next page](https://boards.straightdope.com/t/why-do-libertarians-always-want-to-abolish-the-federal-reserve/826124.md?page=14)