Adam Collins, Prof. and PhD of Economics, March 8, 2012 1. In the United States, the Fed (a.k.a.

The Federal Reserve System) and the central bank are synonymous. 2. If the central bank was destroyed or dismantled, the likely result would be the same as that experienced when President Andrew Jackson took this exact action in 1833. Money could not be printed that was not backed by gold, so the amount of money diminished, causing a devastating depression beginning in 1837 and lasting the better part of a full decade. This depression was the catalyst behind the desire by many Americans to emigrate to the western wilderness and initiated the Oregon Trail experiences, as well the colonization of Texas/settlement of the West. If the Federal Reserve System was dismantled, control over inflation and reduction of unemployment would fall exclusively to Congress and the President via fiscal policy, which is politically motivated and often ignorant of economic necessity. 3. The concept of free coinage in an effort to create more money is simply an extension of basing the value of money on a valuable commodity (such as gold). The simple fact is that population growth greatly exceeds the resource extraction of gold, silver, platinum, etc., which means that there will never be enough gold/silver/etc. to meet the consumer demand of an ever-growing population. This would stunt economic growth and result in stagnation or regression in all areas of the economyincluding research and developmentthus inhibiting the advancement of technology. 4. The Central Banks defined mission is to combat inflation, and pursue a policy of full employment in the American economy. War making is at the discretion of Congresswhich has the authorization to deficit spend in order to finance war. Congress cannot legally require the Federal Reserve to do anything, let alone simply print money to finance military conflict. Congress and the Fed distrust each other, and are often antagonists, as the simple fact is that war disrupts economies as it inserts a large degree of unpredictability into the market, which negatively impacts businesses, causing a slowdown of hiring, and increasing the unemployment ratedirectly contradicting the mission of the Fed. Indeed, the Fed is significantly more anti-war than Congress, as war consistently causes greater problems in the domestic economyfor which the Fed is directly responsible (as mandated by Congress). 5. The simple fact that Austrian economics rejects data that is empirically derived in economic modeling, and chooses instead to pursue strictly subjective interpretations of value, while paying no regard to statistical or mathematical analysis suggests that Austrian economics is the economic equivalent of claiming that intelligent design trumps evolution, or the ability to walk in a straight line proves that the world is flat. 6. The effects of getting rid of a centralized governmental structure of any size, and thereby embracing anarchy, would be the Balkinization of a nation, as it would very quickly digress into feudalism, chaos, and conflict. The dawn of the Middle Ages in Europe following the collapse of the Roman Empire is an excellent example, as this resulted in the compartmentalization of knowledge, and the use of fear to control populations and subject them to a slave-like existence. Petty rivalries would manifest themselves in the form of bloody military campaigns and give rise to continent-wide xenophobia and paranoia. This first time this happened, it set Western Civilization back nearly 1000 years. Should such an event repeat, but with modern access to a much more lethal arsenal of advanced weaponry, the end result would be a massive loss of life, and the potential end of human civilization.