How Is The Central Economic Planning That The Federal Reserve Does Different From The Central Economic Planning That Communist China Does?
Most Americans believe that we still live in a capitalist system and that free markets primarily determine the growth and development of our economy. But is that really the case? No, sadly it is not. The truth is that the U.S. Federal Reserve does a tremendous amount of central economic planning. So what makes the central economic planning that the Federal Reserve does different from the central economic planning that communist China does? Yes, in China it is the government that does the central planning and in the United States it is a private central bank that does the central planning, but other than that are there any huge differences? And if our economy is centrally planned, then how can we continue to claim that we still have a free market capitalist system?
Certainly China goes into greater detail in their economic planning, but that does not mean that the economic planning that the Federal Reserve and the U.S. government do is not similar.
After all, free markets do not set interest rates in this country – the Federal Reserve does.
The Federal Reserve also determines what the money supply will be.
The Federal Reserve is the one that decides if inflation is too high or too low.
The Federal Reserve is the one that decides if unemployment is too high or too low.
In addition, the Federal Reserve has a tremendous amount of regulatory power over U.S. banks and the entire financial system. Most Americans simply do not realize how much power the Federal Reserve has over our banks. Just last year Federal Reserve officials walked into one bank in Oklahoma and demanded that they take down all the Bible verses and the Christmas buttons that the bank had been displaying.