The Federal Reserve Inflation Policies

Topic: Finance
Words: 563 Pages: 2

Introduction

Biblical principles guide Christians to lead religious and acceptable lives in accordance with God’s teachings. Individuals who embrace them find it easier to comprehend God’s expectations and focus on their spiritual goals. In the United States, most of the existing policies and regulations borrow a lot from these principles. However, the government tends to overstep such Biblical rules in pursuit of its economic goals. The use of inflation policies amounts to an unethical role by the Federal Reserve since it violates the Biblical principle of rights to private property.

Role of the Federal Reserve

The U.S. Federal Reserve acts as the primary source of authority when it comes to financial policies and performance of banks in the country. To achieve the intended aims, the Federal Reserve increases and reduces the quantity of money in supply. Since its formation in the year 1914, this agency has increased financial stock by over 100 times (Svensson, 2020). Whenever inflation occurs, the Federal Reserve boosts the amount of money in circulation to mitigate possible negative impacts. Unfortunately, such an approach does not trigger increased rates of production or consumption. By applying Biblical principles, it becomes quite clear the agency’s use of inflation policies remains questionable and unethical. Specifically, these measures maximize state monopolization in the manner in which individuals have access to financial products (Ha et al., 2019). The efforts tend to impact the country’s economy negatively, thereby worsening the experiences of more citizens.

Biblical principles allow individuals to acquire and maintain property rights. The promotion of inflation policies in the U.S. is an outstanding example of a malpractice that continues to violate such a religious liberty. The strategy makes it hard for people to own or maintain the exact value of their assets. Consequently, such a trend becomes unethical and incapable of meeting the needs of more Americans (Svensson, 2020). In another investigation, Bernanke (2020) observed that inflation affected the overall redistribution of a country’s wealth. This initiative maximizes the assets and financial resources available to those who receive additional money following the implementation of new policies. Those who fail to get such an opportunity will have higher chances of becoming poor. This form of wealth redistribution cannot be studied as a voluntary process of exchanging, selling, or acquiring private property.

The Federal Reserve’s move to continue implementing inflation policy is a common strategy that goes against the Bible. In the Book of Exodus (20:15), the Bible states: “Thou shall not steal”. The use of inflation policies results in a monopolistic economic model whereby some citizens take wealth from others. Ha et al. (2019) believe that such a process could be identified as a unique form of theft. The overall outcome, therefore, violates a basic Christian principle. When such a process occurs, it becomes clear that the overall performance of the economy is impacted negatively. The ethical implications revolve around the sudden loss of property rights and the subsequent increase in the percentage of poor citizens.

Conclusion

The American Federal Reserve plays a unique role that amounts to unethical or questionable practice. As described above, its use of inflation policies results in the violation of people’s rights regarding private property. Such an initiative is unacceptable and capable of impacting people’s lives negatively. This monopolistic tendency is, therefore, a clear indication that inflation laws violate God’s Biblical principles that ought to guide people’s actions on Earth.

References

Bernanke, B. S. (2020). The new tools of monetary policy: American economic association presidential address. Brookings Institution.

Ha, J., Kose, H. A., & Ohnsorge, F. (Eds.). (2019). Inflation in emerging and developing economies: Evolution, drivers, and policies. International Bank for Reconstruction and Development.

Svensson, L. E. O. (2020). Monetary policy strategies for the Federal Reserve. International Journal of Central Banking, 134(1), 133-193. Web.