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Does The Federal Reserve Really Prove The Foreclosure Crisis?

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When America was founded, it was established as a nation under God. Unfortunately, the government often oversteps biblical principles in some form of economic policy. In this essay, we will be focusing specifically on the Federal Reserve and how its actions and policies have overstepped biblical principles, which led to damaging the well-being of its people and disrespecting God’s teachings. Overview of The Federal Reserve The Federal Reserve System (established by the Federal Reserve Act of 1913) acts as the central banking system for the United States of America (Federal Reserve, 2023). The Federal Reserve has the responsibility of managing the money supply, setting interest rates, and regulating the financial markets. Most notably, the Federal …show more content…

These crises would lead to people panicking to take their deposits out of their banks. Because of one bank failure, many other people would also rush to withdraw their funds from their banks (this is often called a bank run), even if those banks were in no danger of failing (Brown et al., 2017). When there are multiple banks involved in a bank run, it creates an industry-wide panic that can cause a financial crisis and economic recession. The Panic of 1907 was the financial crisis that is considered to have provided Congress with the final push to establish the Federal Reserve. The Panic of 1907 In mid-October of 1907 many banks and trusts, one of the trust companies being New York City’s third largest trust (the Knickerbocker Trust Company), experienced failure due to an unsuccessful attempt to corner the market for shares of the United Copper Company (Moen & Tallman, 2015). In response to Knickerbocker’s collapse, many regional banks withdrew their reserves from NYC banks, and many people followed suit by withdrawing their money from the regional banks. This panic led to the eighth-largest decline in the history of U.S. stocks. The banking system at the …show more content…

Yes, economically speaking, the Federal Reserve can be seen as a wonderful thing and has seemingly smart policies put in place. For example, the Federal Reserve prohibits the United States from generating money and denies all governmental branches the ability to create or mint money (Federal Reserve, 2023). Interest is charged whenever the US borrows money and the Fed sets the interest rate, which in turn establishes how much debt the US will have. However, regretfully, this has left the United States with endless amounts of debt. In the Bible, God strongly discourages us from taking in debt because it ends up with us becoming slaves to our lenders, losing our freedom. While this is not explicitly listed as a sin, there are still dangers that come with indebtedness. Proverbs 22:7 states that "The rich rule over the poor, and the borrower is slave to the lender." Because of the debt the U.S. government is facing, they have turned to borrowing even more money from the Federal Reserve. The Federal Reserve saw this as an opportunity to begin to move money among the different levels of government and other financial well-off bankers

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