Author Question: The Federal Reserve Board (the Fed) is chaired by someone who has more power over the U.S. economy ... (Read 87 times)

melina_rosy

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The Federal Reserve Board (the Fed) is chaired by someone who has more power over the U.S. economy than does any other personincluding the president. How was the Fed designed so that it is able to have such power?
 
  What will be an ideal response?

Question 2

What is the concern regarding the Social Security Trust Fund?
 
  What will be an ideal response?



smrerig

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Answer to Question 1

An ideal response will:
1, Describe the chairmanship of the Federal Reserve and its power. The Fed controls federal monetary policy. Unlike the president, the Fed doesn't have to get congressional support for actions that are likely to impact the economy. Also, unlike Congress, the Fed deliberates in secret, making every public statement by its leader a potentially valuable clue as to how it might act.
2, Explain how the Fed was created by Congress to regulate banks' lending practices and thus the money supply, and the Fed is designed to be beyond the control of the president and Congress. Its Board of Governors is appointed by the president and confirmed by the Senate. The board is expected not to be swayed by partisan politics. Members of the Fed's Board of Governors are given 14-year terms meant to protect them from political pressures.

Answer to Question 2

An ideal response will:
1, Describe the purpose of the Social Security Trust Fund.
2, Explain the concern regarding the solvency of the trust. Very soon, Social Security will be paying out more in benefits than it receives in taxes.
3, Explain why solvency is a problem, focusing on more retirees living longer and a smaller number of workers contributing to the trust through payroll taxes.



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