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Sen. Mike Lee wants to abolish the Federal Reserve [1]

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Date: 2025-03-25

I thought the Senate bill and Mike Lee were a joke. It's not.

Lee introduced the bill, S. 4463, last June. The short title is: "Federal Reserve Abolition Act." The full title is : "To abolish the Board of Governors of the Federal Reserve System and the Federal Reserve Banks, to repeal the Federal Reserve Act, and for other purposes." Rep. Thomas Massie introduced H.R. 1846 on March 5th. The text is exactly the same.

The bill is suddenly getting more attention as Trump is following through on being friendly with cryptocurrencies, creating his own worthless $TRUMP meme coin 3 days before being sworn in as president, and talking that the dollar is going to be backed by Bitcoin. We're not actually going to buy any Bitcoin, it's just the ones that were forfeited in criminal seizures. It's not much.

Trump tried to pressure the Federal Reserve many times with criticism in his first term, including calling the Board a bunch of "boneheads." He tried to call the shots just days ago.

Trump and others calling for abolishing the Federal Reserve have no idea what the ramifications would be. They offer no replacement. They don't want any. They want a wild west of dollar manipulation by the rich, for the rich.

The bill is so short for what does, I'm just going to put it here. Destruction without a solution. No reasoning necessary.

Shutdown within a year while everything goes to hell. Rep. Thomas Massie introduced the bill in the House. It dissolves the Federal Reserve and transfers it's assets and liabilities to the Department of the Treasury where we have cryptocurrency czar Secretary Scott Bessent. Two bad ideas in a row.

Sen. Lee said, "The Federal Reserve has not only failed to achieve its mandate, it has become an economic manipulator, directly contributing to the financial instability many Americans face today. We need to protect our economic future, end the monetization of the federal debt that fuels unchecked federal spending, and put American money on solid ground. We need to End the Fed."

We all know that the Federal Reserve setting interest rates is what keeps things from spiraling in either direction. It's their actions that help reduce inflation. Without them, interest rates would shoot into the stratosphere. Guess who benefits from that? Big Banks. Credit card companies. Everything that the Consumer Financial protection Bureau keeps from taking you to the cleaners.

Rep. Massie wasn't much help either: "Americans have suffered under crippling inflation, and the Federal Reserve is to blame. During covid, the Federal Reserve created trillions of dollars out of thin air and loaded to the Treasury Department to enable unprecedented deficit spending. By monetizing the debt, the Federal Reserve devalued the dollar and enabled free money policies that caused high inflation."

I don't suppose Massey would remember that Trump created inflation even more with this $7.5 trillion debt addition. With Covid, the act of rescuing the economy came with a price. Had it not been done we would have gone into a depression.

Is there an opposite of "monetizing the debt?" The Federal Reserve needs to be a steady hand in this age of Trump financial insanity. GDP contraction is guaranteed by Trump's tariffs along with higher prices for everything and high unemployment. This is called "Stagflation."

When Trump took over, inflation was under control, there was low unemployment, and the economy was growing. Since he took office, the tariffs and economic uncertainty has wiped out $5 trillion from the stock market. That only took 3 weeks for Trump to do.

Massie wasn't through with his uneducated propaganda: "Monetizing debt is a closely coordinated effort between the Federal Reserve, Treasury Department, Congress, Big Banks and Wall Street. Through this process, retirees see their savings evaporate due to the actions of a central bank pursuing relationary policies that benefit the wealthy, if we really want to reduce inflation, the most effective policy is to end the Federal Reserve."

"Benefiting the wealthy." That's where I fell out of my chair. Shutting down the Federal Reserve has no other purpose but to benefit the wealthy. They have the power to act quickly to snatch up every opportunity and dollar available at the expense of everyone else.

This article includes a slew of reasons why having a central bank serves many functions. It also describes the dangers of a president trying to exert control or pressure on the Federal Reserve. It also describes how President Nixon tried to pressure the Federal Reserve and the high inflation it caused throughout the 1970s. Think what will happen if the Federal Reserve isn't there at all.

The bulk of the Federal Reserves assets are Treasury bills, notes, and bonds. There's also mortgage backed securities. If you sell off the amount of Treasury securities held by the Federal Reserve, it will cause a run, and the whole system will fail. Having the Treasury control its own generated financial entities is still another bad idea on the face of it.

Here's an Investopedia article on the Federal Reserve's balance sheet.

Just yesterday, World Liberty Financial, owned by Donald Trump and his sons launched USD1, a stable coin. The grift knows no ends.

The World Financial Liberty X account.

Pegged to the value of the US dollar, this is supposed to be a safe investment. But why stick with something that's only allowed to be as valuable as a dollar, when you can invest in something that will have greater value over time like stocks and savings interest? I don't understand stable coins and I don't want to really. All you need to know is that Trump gets 75% of every transaction fee.

I also don't want to get into the whole cryptocurrency industry. I've done that before and I can never see how it's any different than a Ponzi scheme.

What is important is that the Trump administration is doing everything it can to loosen regulations that keep cryptocurrencies in check to obey good business practices. They say that there won't be a federally issued cryptocurrency. But the wealthy and Donald Trump will profit greatly from both controlling the regulations and having an inside and insiders track. That was the second part of Trump wanting the presidency. The first was staying out of jail.

The Federal Reserve was created in 1913. It was hotly debated at the time, but it worked until 1929 and the stock market crash and bank failures. Out of that FDR created the Federal Deposit Insurance Corporation. That's what keeps your money safe from badly managed banks. Elon Musk wants to get rid of the FDIC along with the Consumer Financial Protection Bureau, the CFPB. Just take a wild guess at why. It's because they both get in the way of his accumulation of wealth to become the first trillionaire.

Besides destroying the entire economy under the guise of cost cutting, the powers that be want to destroy the barriers to even greater wealth for themselves.

The only question is which financial institution goes first? Elizabeth Warren is fighting tooth and nail to keep the CFPB alive, but it's hard when Republicans control both houses and the presidency.

You now see the game plan. Getting rid of the Federal Reserve just moved into first place.

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[1] Url: https://www.dailykos.com/stories/2025/3/25/2312429/-Sen-Mike-Lee-wants-to-abolish-the-Federal-Reserve?pm_campaign=front_page&pm_source=more_community&pm_medium=web

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