The Federal Reserve is the great evil plaguing our economy, and a market set free will be its saving grace, according to Tom Woods.
Woods, an author with a Ph.D. in history from Columbia, visited CSU Thursday courtesy of the Associated Students of CSU and Young Americans for Liberty to discuss this topic in-detail before a crowd made up mostly of Fort Collins community members.
Woods also discussed the Austrian School of Economic Theory, the business cycle and the dangers of modern socialism. But the most notable of his points were the ones made about the Federal Reserve.
â€œIn the sick scenario (of the free market), there is a â€˜sinister institutionâ€™ that interferes with interest rates,â€ Woods said.
He said this sinister institution is, in fact, the Federal Reserve and that by artificially tampering with interest rates, the Federal Reserve is â€œintoxicatingâ€ the public into believing now is a good time to invest.
But in his talk, Woods argued the natural cycle of supply and demand, if it werenâ€™t for federal interference, would also dictate national interest rates. When the public saves â€“â€“ and therefore banks have more money to lend â€“â€“ they are able to lend at a much lower rate.
When the Federal Reserve interferes with this natural economic process, which entices people to continue investing, â€œthe economy can become too ambitious,â€ Woods said. This results in a resource shortage that can halt production and stretch companies beyond their breaking point.
When the public saturates the market by spending all of its money, thus not saving money in banks, interest rates stay low via the Federal Reserve.
â€œThis can lead to economic collapse like the one we are currently experiencing,â€ Woods said.
After the recession, Woods said that when all is said and done the country could be looking at $111 trillion in debt. He stressed the pressure this will leave on the nationâ€™s youth.
When asked what she thought about this future, potential debt, junior apparel design major Brianne Treffner said, â€œItâ€™s overwhelming. I mean it doesnâ€™t even seem like a real number.â€
Woods said that when the country is faced with lowering such a deficit, people are going to have to â€œput the guns down and treat each other humanely and interact voluntarily.â€
â€œThat is all the free market is, and that would be the first step toward genuine change we can believe in,â€ he said.
Staff writer Justin Rampy can be reached at email@example.com.