why not open a gov entity to take the place of the federal reserve?

How about this? Have Congress enact a law that establishes a decentralized central bank. The bank can be controlled by a seven member panel of economics professors and other smart economic types. To ensure they are impartial, they can't be an officer, board member, or employee of any bank, banking institution or trust company. They also cannot own stock in any bank, banking institution or trust company. The panel members will be appointed by the President and approved by the Senate.

The decentralized central bank will have several offices spread out across the country. The different offices will provide services to commercial banks and other depository institutions much like those that institutions offer to their customers—dispensing cash, transferring funds, and accepting and safeguarding deposits. The decentralized central bank will help financial institutions collect the checks they receive. High-speed, computer-controlled machines at the offices sort checks, total the amounts, credit the depositing institution and charge the institution on which the checks are drawn. The numbers printed in magnetic ink on the bottom of the checks tell the computers which banks to debit. The decentralized central bank will operate an automated clearinghouse (ACH) system to handle electronic payments instead of paper. Financial institutions, businesses and the U.S. Treasury can cut down on paperwork by offering consumers such services as direct deposit and bill payment.

In order for commercial banks to take full advantage of the system and to fully covered under protection laws, the commercial banks will be required to send to the decentralized central bank a portion of their capital. Since the commercial banks will lose the use of that capital to earn profit, the system will compensate the commercial banks by paying them a 6% compensation per year.

Since this decentralized central bank will need some funds to operate each year, it will need some method to earn money. Since the money in circulation needs some sort of backing, the law will have U.S. Government securities as collateral for the amount of printed bills in circulation. Since those securities will earn interest, we can have the decentralized central bank use a portion of that interest to pay expenses. Any amount of the interest not used for expenses will be returned to the U.S. Treasury account. This will keep the decentralized central bank from having to rely on the whims of Congress to approve its budget.

To make sure everything is operating properly, the seven member panel and the nationwide offices will be audited by independent accounting firms every year. They will also be subject to specialized audits by the GAO. The results of these audits and other pertinent information will be part of an annual report to Congress. The reports to Congress will be available as public information.

So, does that sound good so far? Well, guess what? That system already exists. It's called the Federal Reserve.

Sound like you're talking about Socialism. In the US, we have Capitalism (although some claim that we are close to Socialism, which I can kind of see). When the gov't is in so much control that it runs the PUBLIC utilities (like gas, phone, oil, electricity, airlines, and such), that's part of socialism. The USA, in the late 80s and early 90s, deregulated most of those industries to open up the market for more capitalism (so the market would dictate price and it would be fair).

And we would still be taxed. The gov't has to spend money to do the things we ask of it. Can you support someone without any money? Taxes pay for the police, firestations, schools, libraries, museums, mayors, govenors, the president, congress, keeping the roads in good condition, and just about everything else that you see happening that a single person or company doesn't pay for. Which is A LOT.

Oh, and the problems that you are referring to that we face now would still be there, just maybe covered up from our view a little bit. The gov't would only go into more debt by hiding them and taking the hit in the global energy market. If you want to get out of debt, you have to cut spending, which means less programs for the public. Which means people get upset that their interests are being neglected by the gov't. Which usually means those people won't get re-elected. Which then some new people-pleaseing idiot comes in and spends loads of money to make the public happy and puts us further in debt.

It sounds like you need to do a bit of reading on how the US Government works, based on your comment to "david". And no, each American would not willingingly give some money to fund the federal reserve, since the federal reserve controls the money supply (how much money is being circulated through the country). They have the money, and they dont pay off the debt. CONGRESS pays off the debt.

The Federal Reserve is already a government entity. It is a congressionally-chartered agency like the USPS and NASA. It is organized with a 100% government agency at the top (the Board of Governors), and branches beneath them that resemble corporations. (http://www.federalreserveeducation.org/fed101/stru... )

Your plan to privatize the Federal Reserve would cost the tax payer money. The Federal Reserve owns about 17% of the U.S. debt. Because the law requires the Fed turn over "profit" to the Treasury, 90% of that interest earned on U.S. securities is returned to the Treasury. Under your plan, all that interest would be turned over to private investors. This would have cost the tax payer about $30B last year alone.

The Federal Reserve was created as it was cause the treasury department under full control of the politicians ie. executive branch would fully destroy the economy. The idea is for them to be partially independent, which is why the term for Fed. presidents runs longer then the presidential term.

Buy up the oil/ gas companies please comrad: Socialism might sound like a nice idea but Don't Work. lets see I'm president and want to fund this program; well dam we can use the money I was going to spend exploring for more oil, we'll just explore 4 years from now... end of term WoW how did all our oil run out, guess the next guy will have to deal with it?

Well, yes and no. It is privately held but the board of governors is appointed by the President. It operates as the National Bank of the US. It does have an effect on the money supply based on the interest rate it charges banks and through other transactions. When you say "we", obviously the Government especially the Treasury Dept. knows a lot about the Fed and how it works.

The Federal Reserve is a federal entity so no replacement is needed.

Why would the government replace a government entity with another government entity?