Legal Question in Constitutional Law in Indiana

Re: Federal Reserve Illegal by Constitution??

The Federal Reserve Bank is perfectly legal. It is not a privately owned company, but rather part of the federal government.

Even if it had been set up incorrectly, this would not mean that the president who called for its creation (or the senators and representatives who voted for it) comitted treason. Laws are often enacted which turn out to be unconstitutional, but working to put such a law in place is far from treasonous.

Banks and credit card issuers do not "produce" money, at least not in the sense you mean. The framers of the constitution stated that the federal government would have sole authority to produce currency (meaning coins and paper money) but they were well aware of how banking worked and made no effort to prevent private banks from issuing loans. Credit issued by banks is essential to a healthy economy and, while the details have changed quite a bit since the constitution was written, the general principles of banking remain the same.

As for your belief that the Federal Reserve is somehow responsible for the level of our national debt, well, I see no connection there at all. The Federal Reserve does not decide how much the government spends and does not decide how much tax to collect, and those are the major factors in the extent of the national debt.

The Federal Reserve's roles include enabling commercial banks to function smoothly (by providing a centralized system for processing checks, for example, and by facilitating short-term loans so that the banks don't need to keep quite so much of their assets as cash on hand) and setting interest rates to regulate the economy. These are critically important functions and, assuming they are handled well, they keep our economy running much more smoothly than would otherwise be possible. It is one thing to say that particular decisions by the Fed are incorrect, but quite another to argue that the institution itself is harmful to the economy. I have never heard anyone make such arguments before.