For 1 HOUR WRITER

Instructions:

Each of your 2 replies must contain at least 1 or 2 paragraphs including a minimum of 200 words. One of your replies must cover a topic different than the one you discussed in your thread. Seek to understand your classmate’s thread, including the economic theory and facts he/she presented as well as his/her points of view and real-world example. Aim to communicate your own understanding of relevant facts, your values, and your perspective on the topic. Each reply must contain at least 1 citation in current APA format.

Reply to these two:

#1 Daniel

Do We Need A Central Bank?

Central Bank is defined as “An institution that regulates the banking system 

and controls the supply of a country’s money” (Gwartney. Pg 727). The Federal Reserve System is the central bank of the United States. Often referred to as “the Fed,” it was “created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system (federalreserve.gov). It is charged with managing the risks that come with the financial markets.

The question is Do we need a central bank? I believe the real question should be do we need a Central Bank now? I think that at this point the US needs the Federal Reserve to help a fluctuating financial system. “The problem is the financial system that the central banks are charged with protecting. That system is fundamentally corrupt, not because of the bad apples it attracts, but because it operates in the dark with extremely limited disclosure and transparency” (Kotilkoff). Our money has been so far inflated that I believe the Federal Reserve is necessary to back a currency that isn’t truly backed by anything. 

People are seeing the need for the Fed to be less involved in the financial system of the US. In face, the Voice of America reports that “The U.S. central bank says it expects to end its direct support of the American economy next month, but still maintain its record-low benchmark interest rate for a ‘considerable time’ until economic conditions improve more” (US Central Bank Expects to End Direct Support of Economy in October).  

Proverbs 22:7 says “The rich rules over the poor, And the borrower becomes the lender's slave.” It’s interesting to note that the bible talks many times about not being in debt to anyone. A large principle in bible is not desiring money above the things of God. Matthew 6:24 says "No one can serve two masters; for either he will hate the one and love the other, or he will be devoted to one and despise the other You cannot serve God and wealth.

Bibliography

Gwartney, James D.; Stroup, Richard L.; Sobel, Russell S.; Macpherson, David A. (2014-02-03). Economics: Private and Public Choice (Page 727). Cengage Learning. Kindle Edition.

Current FAQsInforming the public about the Federal Reserve. (2014, February 14). Retrieved September 20, 2014 from http://www.federalreserve.gov/faqs/about_12594.htm

Kotlikoff, L. (2011, February 18). Central banks are at the mercy of a bad financial system. Retrieved September 20, 2014 from http://www.economist.com/economics/by-invitation/guest-contributions/central_banks_are_mercy_bad_financial_system

US Central Bank Expects to End Direct Support of Economy in October. (n.d.). Retrieved September 20, 2014 from http://www.voanews.com/content/federal-reserve-policy-shift-interest-rates/2452786.html

The Holy Bible

# 2 Ashley

US Treasury

   The U.S. Treasury

            Often the U.S. Treasury is confused with the Federal Reserve but it’s important to understand that the U.S. Treasury is very different.  While the Federal Reserve focuses on the available money and credit for the economy, the U.S Treasury is focused on how the federal government will pay its bills, “the Treasury is primarily interested in obtaining funds so that it can pay Uncle Sam’s bills” (Gwartney, Stroup, Sobel, Macpherson, 2013, p. 267).  The U.S. Treasury does not issue money but does issue bonds and will sell them to investors to help pay off the budget deficit of the federal government.  When Treasury borrowing and spending occurs, the supply of money does not change, “The people who buy the bonds from the Treasury have less money, but when the federal government spends the funds, the recipients of the spending will have more money” (Gwartney, Stroup, Sobel, Macpherson, 2013, p. 268).

            The U.S. Treasury is responsible for other activities as well, “The Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth, and fostering improved governance in financial institutions” (U.S. Department Of The Treasury).  The Treasury plays a big role in taxes; The Treasury is responsible for investigating tax evaders, counterfeiters and forgers.  Also, according the U.S. Department Of The Treasury website, the Treasury advises on international trade and tax policy. 

            People who are avoiding paying taxes is a good real world example. There are people who are using secret bank accounts offshore in an effort to evade U.S. taxes.  By doing this, it costs the U.S. Treasury roughly $100 billion a year to try to combat this issue.  Technology and the internet have been making it easy for people to move their money into other accounts just by the click of a button.  Romans 13:7-8 states, “Give to everyone what you owe them; If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor” (The Holy Bible, NIV). 

References:

Duties and Functions of the U.S. Department of the Treasury. (2011, February 2). Retrieved

September 16, 2014, from http://www.treasury.gov/about/role-of-treasury/Pages/default.aspx

Gwartney, J., Stroup, R., Sobel, R., & Machpherson, D. (2013). Economics Private and Public

Choice (15th ed.). Stamford: Cengage Learning.