i always hear people talking about how america should switch from its central banking system but i am confused on what other types there are and why this system isn’t great
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The exact details of what a central bank does will depend on the country. The general idea though is that a central bank is the institution that manages the currency of the country, and often participates in regulating commercial banks.
Money is ultimately totally made up. The United States made up the U.S Dollar and therefore can make more of it whenever it wants. However we have wisely decided that giving that power to politicians is not a good move, so we give it to the central bank which is nominally independent.
Sometimes, the economy needs more cash to function properly. Sometimes, like right now, there’s too much cash and some needs to come out of the system. It’s up to the central bank to make those calls. Because it has the power to create money, it can never run out of cash to put in the system
Whether or not this is a “good” system is definitely not an objective fact though.
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