Role of the Federal Reserve and how it Oversteps the Biblical Principles

GOVT 220 Economics Analysis Essay Instructions

You will write a paper on role of the Federal Reserve and how it oversteps the biblical principles.  2-page paper (double-spaced, 1-inch margins, 2 full pages) providing at least 1 example.

Options include the following topics:

  • A specific piece of legislation relating to business regulation or taxation
  • The “party platform” of either the Republican Party or the Democratic Party (or both)
  • The role of the Federal Reserve
  • The budget process

In discussing one of these topics, incorporate clear references from the required reading.

Role of the Federal Reserve and how it Oversteps the Biblical Principles – Sample Solution


There have been a number of conflicts between the established government policies and the religious principles in the United States. Christians in America have frequently felt that the government policies were going against their moral principles as directed by the bible. One of the policies that have been extensively criticized by the Christians in America is the recent Obamacare Act. There was also a lot of question on how the government manages its economic policies and responsibilities during the 2008 economic crisis. Christians have made a number of critics regarding the manner in which most government economic agencies perform their roles based on biblical teachings. This paper analyses the role of the Federal Reserve and how it oversteps the biblical principles.

Federal Reserve Role Performance and the Bible

Federal Reserve is the United States central bank and the most influential world financial institution. It was established in 1913 by the U.S. Congress to give the country stable, flexible and safe financial and monetary system. Federal Reserve is founded on a federal system which contains an agency of central government in Washington, D.C. as well as twelve Federal Reserve regional banks that are responsible for a particular U.S. geographic area. This bank is regarded to be independent since its decisions must not be approved by any government official not even the president. Nevertheless, the bank is still be subjected to oversight of the congress and thus, it must operate in the financial and economic government framework policy objectives (Investopedia, 2015).

Read Also – How Government has Overstepped Biblical Principles in Form of Economic Policy – Licensing Law

The Federal Reserve has a role of enhancing moderating rates of long-term interest, stable prices and maximum employment. The Fed contains three major functions which include maintain and provide an effective system of payments, regulate and supervising banking operations, and conducting monetary policy. Actually, the most essential instrument that Fed is obligated to is selling and buying securities for the US government. Other instruments in Feds disposal to impact economy are adjustments to the reserve requirement and discount rate, as well as performing as a leader. In this case the reserve requirement refers to the portion of money a bunk should put aside and maintain in the reserve. Discount rate on the other hand, is the set charges for short-term loans interest rate of reserves (Investopedia, 2015).

Based on the defined rules Fed has an obligation of ensuring stability of the country’s economy. Actually, Fed was in a position of preventing the recent financial crisis in the country. However, the bank watched as banks consumed the amount in the reserve, offering loans to individuals without the ability to pay and increasing the interest rate without doing much to prevent it. This happened despite of the bank official having a great knowledge of the problems this would bring the economy of the entire country. This act of being irresponsible and not standing up to ones duty is highly against the biblical teachings (Manson & Schaefer, 1990).

The Bible also question on the number of U.S. economic policies governing the country. It is obvious on three legal standards that include monetary debasement, multiple indebtedness and measures and weights. According to the bible, no one should tamper with measures and weights. This is addressed in the book of Leviticus 19:36. Multiple indebtedness is also considered wrong as addressed in the book of Exodus 22:26. However, Fed works on the basis of partial reserve banking and thus violating this principle. In addition, debasement of monetary is considered wrong as addressed in the book of Isaiah 1:22. All the above three principles are violated by the current economic policies (North, 2015).

Like any other central bank, Fed system is a privately owned monopoly, which is licensed by the government. The government only contains indirect power against it by being permitted to appoint the members of the board. Moreover, the bank does not allow any accounting organization from the government to evaluate its record not even in the regional level. Therefore, the bank is capable of committing any form of fraud without anyone noticing, which is against the biblical and ethical principles. The powers given to the bank as a private entity are overwhelming. This can be attributed to the 2008 financial crisis in which banks went against their ethical working principles without anyone stopping them (North, 2015).


The government has an obligation to safeguard the right of its citizens and to work as guided by the, moral and laws of the country. However, some of the policies the government has employed do not safeguard the citizen’s rights, but they provide government agencies with powers to oppress the citizens. Some of these policies are highly against the biblical teachings. The government inability to observe biblical teaching in the development of its policies has highly attributed to current problems in the economy and thus, the government should consider following biblical moral guide to rectify this, for the benefit of the country (Manson & Schaefer, 1990).

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