The problem is that this system increases the money supply, not based on actual goods and services available in the economy, but on other factors.  And when you have things like they are now, where assets were overvalued, and paid for with debt, you can't service the debt.  Critics of monetary systems based around fractional reserve banking point this out:

http://en.wikipedia.org/wiki/Criticism_of_fractional-reserve_banking

The short here is that there isn't enough money in existence to service the current debt.  You see this now, because how is Europe considering addressing its debt crisis?  It is looking to issue Euro bonds.

As far as "the government buying debt from itself", this is false, because the Federal Reserve is not part of the government.  There is government oversight but it is a private bank.  If they government did buy debt from itself, why would it charge itself interest?

The end result here, on how the system is set up, right down to the issuing of currency, is that any disruption and slowdown in growth causes it to collapse.  It is not sustainable, and that isn't a win-lose.  It ends up being a win-lose-lose-lose-lose.  

As far as the world not functioning a 0% interest based economy, if you didn't have one that was based on debt, it could.  But, so long as you keep operating a system around the need for more money in the future, particularly in how currency is produced, it eventually does collapse.  A debt based system will always produce a certain percentages of insolvency, no matter what people try to do, and if they did everything right.  Only sustainable system is one pegged to the current amount of goods and services in the economy.  But the current system has money supply not pegged to goods and services, but to projections of possible goods and services, all linked to interest that requires even more economic growth to sustain itself.

The one question that would remain here is: How the heck do you finance any projects getting done, if it isn't debt based?  How about using one based on future returns on assets?  You know, like they have with stock markets?  

Next up, Occupy Congress:
http://www.cnn.com/2011/12/06/us/occupy-congress/index.html?hpt=hp_t3

Occupy DC to march on the White House:
http://occupydc.org/wednesday-day-of-action-occupiers-unite/

On Wednesday, Dec 7, Occupy DC calls on all occupiers in the DC Metro area to unite for a day of action against the undue influence of money in politics.

We will meet at McPherson Square at 10:30am to march on an undisclosed lobbying firm.

At noon we will reconvene at McPherson Square for an occupation block party on K Street. The merriment will be similar to that of the parties at which lobbyists and politicians wine and dine each other.

At 5pm we will march to the White House, a central hub of corporate bribery. President Obama is expected to raise as much as $1 billion in his re-election campaign — enough to pay 20,000 school teachers for a year.

Then we will march to the Supreme Court to protest its decision in the Citizens United case. This decision promises to unleash a flood of corporate campaign contributions unlike anything seen before, until the American citizens unite to overturn it.

"the White House, a central hub for corporate bribery"?  Gee, doesn't sound too pro-Obama to me.  Wonder what happened with it Occupy being some sort of Obama set up operation.

No.  I'd rather their buisnesses be allowed to fail.

Though lobbying washington and protesting it are two pretty different things.

Actually europe ISN'T looking into Euro bonds.

Everyone else wants them too, and Europes response has more or less been "Hell no."

Your arguement seems pretty scatteershot but...

Let's start with the "Federal Reserve isn't a government orgnization myth."

We can move on to the rest of the argument after this.

Well, lets start with what the Fed has to say on the matter themselves. 

http://www.federalreserve.gov/faqs/about_14986.htm

1) Why would the government charge itself interest?

Ask the Social Security Surplus Trust Fund.   It buys "speical" treasuries directly from the government with any surplus it has.  Charging the government interest when those speical treasuries come through. 

Or like, a dozen other federal funds that do so. 

2) Why is the Federal Reserve board of govoners... the people who make ALL of the decisions apointed by the President and approved by Congress?

3) Why does the Federal Reserve give it's spare money to the government if it isn't a government agency?

Last year the Fed had a net income of 80.9 billion.  78.4 billion of that money was sent to the US Treasury.  Considering the fact that US Treasuries holdings made up less then 78.4% of the feds profit... that means it bought and paid down some US debt, no?  Since the treasury either never had to pay that money, or did pay it then got it back.  In otherwords, not only is the federal reserve a part of the government.  It's one of the few areas of the government that's profitable and subsdizes other agencies.

To quote...

"Under the Board's policy, the residual earnings of each Federal Reserve Bank, after providing for the costs of operations, payment of dividends, and the amount necessary to equate surplus with capital paid-in, are distributed to the U.S. Treasury."

http://www.federalreserve.gov/newsevents/press/other/20110110a.htm

That would be like say... Microsoft saying "We're going to pay our people, then our dividends, and then once we have enough money to make sure we can do what we want, the rest is going straight to the government!"

Versus say... investments, like a private company would do?

So, you are saying that the Federal Reserve is an entity that is part of the U.S government and has oversight like other parts of the U.S government? Alan Greenspan said it isn't:
http://www.youtube.com/watch?v=3QkmLnNEvdU

As far as ownership, they the Federal Reserve is owned by private banks:
http://www.factcheck.org/2008/03/federal-reserve-bank-ownership/

Q: Who owns the Federal Reserve Bank?

A: There are actually 12 different Federal Reserve Banks around the country, and they are owned by big private banks. But the banks don’t necessarily run the show. Nationally, the Federal Reserve System is led by a Board of Governors whose seven members are appointed by the president and confirmed by the Senate.

FULL ANSWER

The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system, and thus own the Fed banks.


Yes, the U.S government appoints people over it, the governors, and the chairman. Look at who has been appointed to these roles, it is individuals from Wall Street in the chairman role, and other key offices in the U.S government.

Msg deleted...

You do realize the very next paragraphs completely defeat your point right?

The concept of "ownership" needs some explaining here, however. The member banks must by law invest 3 percent of their capital as stock in the Reserve Banks, and they cannot sell or trade their stock or even use that stock as collateral to borrow money. They do receive dividends of 6 percent per year from the Reserve Banks and get to elect each Reserve Bank’s board of directors.

In otherwords... they don't really own the fed.  Anymore then anyone who pays into socail security  "owns social security"

They have no actual ownership rights, and the stock being held is just a requirement to be in the Federal Reserve System.

So... your wrong.   And again, if this is a privately run corporation, why does all the excess profits go straight to the US Treasury?

Don't tell me your turning into one of those "The world is controlled by international (jewish) banker" types.

Aside from which before he was appointed by the government  Ben Bernake was an economics teacher at Princeton... and never actually held a job on Wallstreet... actually Princeton Proffessor was his only job after he graduated.  So, no, the Chairman of the Federal Reserve ISN'T a Wallstreet insider.

Though why you wouldn't expect economics people to be head of the government agency that handles a big part of the economy i'm not sure.

Are you raging at the fact that the FDA is full of "Medical Insiders" or that the Justice Department is full of "Legal insiders"?

So a Fed Chief who deals mostly with banks should be some random dude rather then a person who knows the system???

Also Ben Bernake was a Prof and he wrote textbooks on microeconomics (that I read for Microeconomics)/

Consider this situation here, in regards to the financial system and the said "experts" involved with it:
http://en.wikipedia.org/wiki/Goldman_Sachs#Personnel_.22revolving-door.22_with_U.S._government

http://www.nytimes.com/2008/10/19/business/19gold.html?pagewanted=all

You have a system where the top banks have people in them go into government positions and shape policy favorable to them, because that is what they believe is needed.  So, when the president asks for advice on why they should appoint for chairman of the Federal Reserve, you get Wall Street insiders shaping the decisions.

As for why this issue is different than arguably the justice department or FDA, it is that there is nothing that is not impacted in an economy by what the Federal Reserve does, in its control of the money supply, and that the people that would be appointed in the Fed will end up, invariably, try to bail out the banks.  Also, the concentration of wealth leads to a concentration of power also, with there being very few major banks on top, to give a small select list.  This is not true for legal or the medical industry.

And as far as the profits "going to the Treasury", how is that working out now?  Is the U.S Treasury and the U.S tax payers making out like bandits now, by the decisions of the Fed?