Greenspan and the Federal Reserve: Methods and Resources
             The United States of America was founded as a capitalist nation dependent on independent trade by privately owned businesses. This system of economics stays as far away as possible from a centralized government controlled economy. However, as generations of economists, politicians, and businessmen carried out the principles of the Constitution, it became apparent that some centralized bank was required to maintain stability and order in the national economy. This central bank is known as the Federal Reserve, and its Chairman is responsible for maintaining a positive economy through several powers. The current Chairman is Alan Greenspan, a man responsible for controlling a stable economy through several checks and balances.
             The Federal Reserve was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Today the Federal Reserve's duties fall into four general areas: conducting the nation's monetary policy; supervising and regulating banking institutions and protecting the credit rights of consumers; maintaining the stability of the financial system; and providing certain financial services to the U.S. government, the public, financial institutions, and foreign official institutions. It consists of twelve regional banks that are owned and controlled by member banks in their region. Overseeing the twelve regional banks is the seven member Board of Governors based in Washington. The primary policy making body in the Federal Reserve is the Federal Open Market Committee (FOMC). The FOMC has twelve members, all seven governors and the presidents of five regional banks (Martin 23-25).
             The Fed has three tools it can use to moderate the economy. The most common one is open market operations. Open market operations is just the selling or buying of government securites on the open market. The second tool is the...