The Federal Reserve and Government Debt
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Questions and Answers

What would be the impact of terminating the Federal Reserve's powers to create government debt-backed money?

  • It would lead to inflation and deflation.
  • It would reduce excessive Government spending and improve accountability. (correct)
  • It would increase Government spending and decrease accountability.
  • It would have no impact on Government spending or accountability.

    • What would be the result of requiring the Federal Reserve to create a stable, asset-backed currency?

  • It would have no impact on inflation or deflation.
  • It would avoid both inflation and deflation. (correct)
  • It would lead to inflation and deflation.
  • It would increase Government spending and decrease accountability.

    • How would the Federal Reserve distinguish between 'productive' and 'non-productive' uses of money and credit?

  • By financing productive uses directly from the Government's tax revenues.
  • By financing productive uses from the accumulations of savers, wealthy Americans, and foreigners.
  • By financing non-productive uses from the accumulations of savers, wealthy Americans, and foreigners. (correct)
  • By financing non-productive uses directly from the Government's tax revenues.

    • According to Louis Kelso, money is primarily used as

    <p>A means of measuring obligations, rights, powers, and privileges</p> Signup and view all the answers

    America could reduce its dependency on past savings by

    <p>Creating new, asset-backed money</p> Signup and view all the answers

    The Federal Reserve System would supply asset-backed money and productive credit through

    <p>Local banks</p> Signup and view all the answers

    To ensure broad representation and power over future money creation, the text suggests providing

    <p>Lifetime, non-transferable voting shares to all citizens</p> Signup and view all the answers

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