Federal Reserve worsening debt

Governmental policies of a bloated federal debt are portents of a vulnerable flat paper economy.

The disappearing middle class funneled into poverty is being squeezed with escalating health care insurance costs from an indefinite array of disparate insurance plans for the unwary. There continues downward adjustments of Social Security income for the elderly and bank savings interest for all, with increased mortgage and credit card payments.

A widening chasm exists between the haves and have nots. Income distribution has become a pyramid of despair with a growing army of part-time, temporary and long-term unemployed workers.

The most significant factor in the current financial debacle has been the extragovernmental Federal Reserve overreaching its authority.

The increase of the debt ceiling totaling over $6 trillion in the last five years provides a steady supply of U.S. bonds, enabling the Federal Reserve to bypass Congress in annual trillion-dollar bailouts (i.e., quantitative easing of Wall Street banks).

The quantum leap of Federal Reserve influence and Wall Street aggrandizement results from 1999 legislation that repealed Glass-Steagall separation of speculative investment operations from commercial deposit banking.

Adam Smith articulated common sense observations in Wealth of Nations, stating the fundamentals of economic capitalism. Federal Reserve unilaterally monopolistic policies are detrimental to the proper functioning of capitalism wherein goods and services are determined by private decisions in a free, competitive market with maximum prosperity of the economy.

George Black

Iowa City