Congress is to Blame for the National Debt

By Aaron Cuevas

Congress is to Blame for the National Debt,

But We Should End the FED Too

There has been a rumor around libertarian circles that the Federal Reserve creates debt when they increase the money supply. The mal-investments created by the FED toying with the money supply are huge issues that need to be dealt with; well, by ending the FED. However, the root of the mal-investments and of the national debt is Congress, not the apparatchiks at the FED. They are the enablers though.

Central Banks like the FED have their origin in the need of politicians to spend beyond their tax revenue, so a private bank was given a monopoly on note and coin issuing in exchange for cheap credit to the mercantilistic kings. The reality now is not meaningfully different. Politicians in DC want to get their pet projects in the annual budget, but there is no human way voters can get their “free” college, “free” wall, “free” healthcare, “free” war,…you get the picture. Therefore, politicians and their cronies created the FED to finance the federal debt. And when bond vigilantes are ready to make a run on the Treasury (Congress’ lapdog), the Fed buys bonds like crazy with new e-money.

This is the process: Congress borrows from banks and the general public, including foreigners, this debt is created by Congress in the form of Treasury Bonds. Then the Fed buys a portion of those bonds giving fresh new e-money to banks, increasing the money supply. This in effect is financing the federal debt, making it easier to grow and pass on to future generations.

Whatever words you want to use, Congress is the root of all this evil. The Fed is an animal of Congress. The monster that creates the debt is the political system that likes to live off your labor and the labor of your descendants.

We should definitively abolish it, but don’t forget to End the Fed too.