We cannot have a strong country without a strong monetary system. As of now, we don’t have a strong monetary system. The below chart shows the tremendous growth of money and debt in recent years.
The Fed’s powers are virtually unlimited. Under section 225a of Title 12 of the U.S. Code, the Fed is supposed to “promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.” The objective of maintaining moderate long-term interest rates has been largely neglected by the Fed. Letter to the Editor of WSJ about Fed Powers Sep 23 2019 (PDF) (While I agree with Ms. Shelton on this point, I would not/would not have support her nomination.) While the Fed did a good job of preventing things from getting worse in 2008 and 2009, it was largely responsible for the boom and bust in the first decade of this century. As noted in the attached article, with a low fed rate, its recession-fighting powers are weaker than they were in the past. WSJ article Jan 6 2020 (PDF). (So, even more deficit spending will occur in the next recession.) The growing debt leads to a major concern about tremendous money printing (Quantitative Easing, etc.), with the money used to buy Treasury securities, thereby reducing interest rates while substantively reducing interest expense and debt, with significant inflation being the fallout. Additional talk of placing limits on Treasury yields is taking place. WSJ article on the Fed limiting Treasury yields (PDF).
There is nothing “behind” our currency (i.e. no gold, etc.). The attached materials help explain why printing of money is generally bad, and also explain monetary policy in general and things like quantitative easing (QE). Two articles on money printing (PDF) | Article Who Prints Money in the U.S. (PDF)
A lot of QE will occur in 2020. What is it? Substantively, it is printing of money. Technically, it is making credits to banks’ accounts in exchange for some asset—generally Treasury debts. So, money is created and the Fed takes over the asset. The Fed will say this is done to reduce bond yields (which it has done, but probably cannot do now) and make more money available for banks to lend (which many did not lend out when QE was very active from 2008 to 2014). It also pushed up stock market values, as investors moved money there for better returns. What you don’t hear much about is much of the real reason: To reduce federal debt and interest. In 2017, Michael Hüther (an economist then working at Stanford) said: “A government loses its democratic legitimacy if it start[s] paying a too-high share of its tax income on interest.” When the Fed receives interest payments, it basically sends them back to the Treasury, reducing net interest expense. In the end, we have more money—that ordinarily leads to inflation. And, inflation is a tax on savers.
Instead of simply accepting the status quo, the role of the Fed and its powers need to be thoroughly examined for beneficial change, including express limits on power and accountability.