Why the Federal Reserve is Damaging America - Part I

I read and hear a lot about how bad the Federal Reserve is for America. The cries for “Audit the Fed” continue to grow louder. Inherently I understand that government intervention always causes market distortions in the market but trying to explain how the Federal Reserve detrimentally impacts the economy at a level that the average person can understand has proved daunting.

Below is a list of observations about the market with the Federal Reserve and what would happen without the Federal Reserve. Future blog posts will expand on many of these points.

With the Federal Reserve	Without the Federal Reserve
Unconstitutional government-granted monopoly on the creation of money. They fix the cost of credit.	No monopoly. Billions of transactions determine monetary policy.
Recessions and depressions linger for years as the Fed’s market manipulation interferes with free market principles – i.e. “Too Big to Fail”, zero interest rate.	Recessions and depressions self-correct with liquidation of bankrupt companies and industries.
Arbitrarily suppressed interest rates discourages savings, hurts those on fixed income, the poor, and savers. These artificial rates result in malinvestment by sending the  wrong signal to entrepreneurs to borrow at lower rates during a time when the economy may not support their expansion.	Interest rates determined in the marketplace comprised of billions of independent, voluntary transactions between millions of producers, consumers, workers, savers, investors, entrepreneurs and even speculators would return to normalized rates and encourage and reward savings. A large supply of savings would lower the interest rates offered by banks competing to make loans. Low rates send signal to entrepreneurs to borrow and invest in expansion.
Economy-wide booms and busts	No economy-wide booms and busts. Just typical localized and/or sector-specific business fluctuations
Artificially inflated stock market characterized by stock buybacks and dividend increases instead of productivity increases.	Stock market rewarded for future growth, productivity, and innovation.
Lending is suppressed. Why loan money at artificially low rates? Instead institutions seek higher yields and take more risk than otherwise necessary by taking the cheap money from the Fed and investing it in the stock market or other riskier vehicles – the carry trade.	Savings are used to finance business expansion. Depositors restrict current consumption (i.e. save) and business expands using the savings which is loaned to them. Lower consumption turns into more savings. Those saved dollars are then loaned out.
Central planning and crony capitalism.	Free market capitalism.
An unlimited amount of fiat money can be created out of thin air. No gold standard.	Sound money. Possibly backed by gold and/or silver, both of which are scarce, limited, and cannot be created out of thin air as they must be discovered, mined, and minted. They are rare, durable, portable, and divisible.
Bailouts	Bankruptcy
Inflation resulting from the increase in the money supply.	It is very difficult to increase the supply of gold and/or silver, therefore inflation is severely limited.
The welfare and warfare state are fully funded.	Neither would be financed to the insane levels they are currently as taxes would need to be raised to pay for each instead of printing money.