Ok, excellent tactic. You can’t defend Mr. Paul’s proposal to abolish the IRS so you pivot over to his position on the Federal Reserve (still breathlessly waiting for $470 billion worth of reductions).
I’ll bite anyway – just cause I’m having so much fun.
Your numbers are quite right. The national debt has grown and, in recent years, has grown quite a lot. The Federal Reserve, however, has nothing to do with that. The Federal Reserve regulates monetary policy, not fiscal policy. In plain terms, the Fed helps decide how much money flows into the system. It affects interest rates, and indirectly, inflation rates (a topic to which I’ll return in a moment).
If you don’t like the growing debt, your culprit isn’t the Fed, it’s Congress and the President. If you want to take the position that Congress should only spend as much money as the federal government takes in, then I will gladly agree with you on that point. In fact, the Democrats, upon retaking Congress, instituted just such a rule (it’s called Paygo).
As for the Fed, raising and lowering interest rates indirectly affects how much people choose to save or to spend (higher interest rates incentivize saving). That’s why when the economy hits a rough patch, the fed lowers interest rates, making saving less attractive, and thereby causing more people to spend. More spending leads to more economic activity and then, hopefully, gets the economy going again. You want proof it works? Take a look at the GDP since the Fed was created (and we’ll even use real value per person, which takes account both of population growth and inflation): 1913 – $5462, 2006 – $37807. That’s a 700% increase. In the 100 years before 1913, real GDP per person grew at less than half that rate. Of course, not all of it can be attributed to the Fed, but it sure doesn’t hurt.