Fractional reserve banking discussion with young economist June 17

From press release

Nearly 60 local Tea Party supporters gathered Thursday night, June 10, in Lena to hear speaker Savannah Liston. Members of the audience included Tea Partiers from Carroll County and Stephenson County, with some from as far away as Morrison. Liston, 16, of Pecatonica, delivered a well-received presentation about fractional reserve banking.

Fractional reserve banking is defined by as “a banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties.” Liston, presenting from the Austrian or free market school, illustrated how fractional reserve banking can lead to inflationary periods and harsh business cycles. The home-schooler will seek more insight on Austrian economics on scholarship this summer at the Ludwig von Mises Institute in Alabama.

Enthused members of the audience asked questions ranging in topics from historical periods of depression and recession to minimum wage laws and unemployment. “What should be the role of the Fed, then?” posed one of the nearly dozen newcomers. Poised, prepared and knowledgeable, the young speaker offered her thoughts, while, in true Tea Party fashion, other members of the audience joined in to share some of their conclusions as well. Stephenson Tea Party organizer Bill Dietz acknowledged, “Each individual will have a slightly different view on many of these topics,” which is part of the national intrigue of the Tea Party.

Savannah Liston concluded by asking the audience to think about “What is liberty?” and to consider, “What service does the government provide that the free market can’t do better?”

“Not very much,” was the general consensus in the room. The Stephenson County Tea Party meets in Lena on the second Thursday of each month. Call Bill Dietz at (815) 369-4334.

Savannah Liston will hold a meeting to discuss economic topics at 7 p.m., Thursday, June 17, at Mary’s Market, 4431 E. State St., Rockford. Admission is free.

From the June 16-22, 2010 issue

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