centsi
Campaign Veteran
I must disagree that this is a good idea. You see, "Congress purposely established the fed as an independent agency of government. The objective was to protect the Fed from political pressures so that it could effectively control the money supply and maintain price stability. Political pressures on Congress and the executive branch may at times result in inflationary fiscal policies, including tax cuts and special-interest spending. if Congress and the executive branch also controlled the nation's monetary policy, citizens and lobbying groups undoubtedly would pressure elected officials to keep interest rates low even though at times high interest rates are necessary to reduce aggregate demand and thus control inflation. An independent monetary authority(the Fed) can take actions to increase interests rates when higher rates are needed to stem inflation. Studies show that countries that have independent control banks like the Fed have lower rates of inflation, on average, than countries that have little or no central bank independence." Can you imagine how bad off we would be economically if Congress had control of monetary policy. Those men and women can barely wipe their own butts, let alone try to even understand monetary policy and how it works.
Source: My economics textbook
I have no doubt that your economics text book pushes this idea that an "independent" central bank is necessary to maintain "full employment" and "price stability". Sadly, Keynesianism and central monetary planning are all they teach in schools these days. I'd recommend that you read up about the history of banking leading up to the creation of the Fed. Read about how it was sold to the American people. Read about who the actual designers of the system were during those meetings at Jekyll Island.
Central banking is the worst possible example of central planning. Just like the Soviet commissars would sit around a table and decide how many cars or houses or loaves of bread the state industries would produce that year, the Federal Reserve Board and the FOMC try to decide what the price of money should be for the entire country. How can less than 20 people possibly have the same knowledge and expertise about the state of affairs as the collective knowledge of the entire populace, ie the market? They can't. And far from being an institution insulated from political influence, congress and the executive branch have enormous incentive to pressure the Fed to act in a given way because the Fed's actions are carried out in secret. At least if congress were doing it, we'd know what they were doing.
However, the suggestion that congress take over the printing of money is almost as ridiculous as the Fed doing it. No one should print money. Wealth cannot be printed. Instead the price of money, ie interest rates, should be determined by the market, and the actual currency that we use should be fully backed by metals. To ensure that the money supply vs. metal supply is not manipulated by the treasury, congress should repeal legal tender laws that force us to use any specific currency.