A more robust federal system is characterized by extreme independence. Independence has been marked with elaborate stability in the Federal Reserve System. It has also been the case over the years of up to the 2007 crisis. It should, therefore, be reserved for its particular place to that independence. From the onset, the independent Federal Reserve System helps in moderating the long term interests. Suiter et al. (2016) posit that these interests go beyond governments’ tenures and are the security with which the government manages to run its ever-growing expenditure. It is the Fed as it’s frequently called that will ensure stable economic growth. Consequently, from these, we find the Treasury Bills and Bonds doing the most to keep investors at the frontline.
First and foremost, the Federal Reserve System is characterized by significantly longer statutory terms. Its governors and the executives under the stipulated period traversing well to 12 years. Because of this, we can argue its strength from the non-affiliation to the transiting government. Besides, if the President and the Congress were to limit the powers of the Federal Reserve System, it would result in a hard edge that would unavoidably plunge the country back into the 2008 crisis. This feature about the Fed is its only mandate to ensure sustainability.
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Additionally, the stability in the economy in terms of prices and the maximization of employments are part and parcel of the duties of the Federal Reserve System. Therefore, politically interfering with this system ultimately results in a possible mass misappropriation and unrest. Politics being a pivot to development and a divisive concept will, without a doubt, culminate into biasness, mass emigrations, and an unstable upsurge in the economic endeavors of any system.
The Fed’s independence has, over the decades, ensured a mechanism that sees its funding system that has helped the world grow. This, as a result, has enabled the works of agencies such International Monetary Fund, UNICEF have, as a result, been enabled. Besides, the world, especially the Growing Economies, has substantiated the development goals within their domains.
In conclusion, the independence of the Federal Reserve System is paramount for the entire functions of many nations across the globe. The financial crisis of 2008 was one of its kind, but it should not halt or give room for executive or legislative bargains. Its rights as a Federal institution should remain paramount. It should, therefore, remain a unilateral body; however, its doors should remain open for more progressive policies and not interference.
References
Suiter, M. C., & Taylor, K. G. (2016). Resources for economic educators from the Federal Reserve Bank of St. Louis. The Journal of Economic Education, 47(1), 71-75.
