Do we need the IRS or Central Banks?

If anyone reads the full history of the Federal Reserve, they would see why they exist. To protect banks and investment companies, not to stabilize the dollar. Regardless of the tax structure, the IRS is necessary, but with good policy, much reduced in size and scope.

Ok - lets clear something up, if you think we don't need a central bank, please go read an economic history of the United States prior to the establishment of the Federal Reserve system - the level of economic illiteracy here is just amazing.

The role of the central bank is critical to providing a stable banking system - within a central banking system there is no stabilizing economic backstop - it's more than just the FDIC ( which was established in 1933 as a result of the Great Depression)

A brief outline of before the establishment of the Federal Reserve ( not including the period 1800-1834 as the economy was still formative)

1836 - 1838 - Major recession, banks stopped paying in gold, 600 bank failures, southern economy collapsed

1839 - 1843 - deep depression, deflation, bank failures

1845 - 1846 - mild depression

1847-1848 - strong recession, linked to bank crisis in Britain

1853 - 1854 - very high interest rates, railroad failures

Panic of 1857 - 5,000 business failures, mass unemployment, protests in the streets, loss of confidence in banks

1860-1861 - another recession, bank panic narrowly averted by onset of civil war

1865 - 1867 - post war deflation, rolling periods of financial instability associated with Reconstruction and financial instability in Europe crossing the Atlantic to impact US

1869 - 1870 - continued rolling financial instability, major financial panic associated with crop failures, start of Farmer's Movement

Panic of 1873 - the "Long Depression" - actually worse than the Great Depression. Economic conditions brought about by failure of various speculator markets, large scale deflation and wage cuts - Great Rail Strike of 1877 - US return to gold standard in attempt to calm markets

1882 - 1885 - Recession - continued depression in prices, railroad building decline, Panic of 1884 (bank failures)

1887 - 1888 Mild recession

1890 - 1891 - recession caused by monetary failures internationally and bank panic in England

Panic of 1893 - bank failures, economic stagnation and deflation

Panic of 1896 - general economic deflation and productivity declines, bank failures

1899 - 1900 - short recession

1902 - 1904 - slow decline in economic activity, deflation in wages and prices

Panic of 1907 - Major bank failures - severe monetary contraction (no liquidity in the markets - Congress starts work on federal reserve system

Panic of 1910 - 1911 - lon depression, economic growth almost non-existent, deflation

1913-1914 - Recession result of effects from Panics of 1907 & 1910 - Federal Reserve Act signed

Note that in the above sequence almost all recessions where much harder economically than periods of recessions post establishment of the federal reserve and resulted in no or little growth, deflation and bank failures. Prior to 1933 when a bank failed, everyone lost their money with no chance of getting back. The 'panic' periods are very much akin to periods of depression and in every case were as severe or worse than the "Great Depression" relative to economic impact. In fact the Panic of 1873 is also considered the Long Depression which by some measures lasted until 1896. Economic growth stagnated in the US -and if you read history, it gave rise to a series of periods of unrest , riots, the formation of anarchist groups and violent unions (and violent suppression of unions).

Since the establishment of the Federal Reserve system this country has seen only two major events - the Great Depression and the Great Recession. One of the key differences between the two was the way the Federal Reserve acted - in the Great Depression, the Federal Reserve tightened monetary policy which further removed liquidity from the markets - in the Great Recession, the decision by the federal reserve to loosen monetary policy had the effect of providing liquidity and keeping the markets (and economy) from getting worse. The Great Recession was further eased by the existence of the FDIC - even though banks failed, most depositors where insured - and while banks 'failed' very often the FDIC forced mergers which preserved depositor funds without the FDIC having to pay out.

Yes there have been recessions since the Federal Reserve was established, but nothing on the scale of what a recession meant prior to the federal reserve.

Sorry for the long post, but simple 'polls' like this are a pet peeve - it's like asking someone ' So when did you stop beating your wife'

What will we replace it with?