Greater accountability needs to be established in order to instill confidence in monetary institutions and the overall financial system. Key central bank governors and directors should be elected through a public vote. This is preferable to the current system in place across much of the world where central bank policymakers are appointed by the executive or legislative arms of government or by private sector banks.
Rules should make the fed more accountable but they can just break rules if they want and probably will. The real issue is accountability. The fed governers could be directly elected and have to report to congress or their constituent if they dont achieve their objectives.
It may be worth considering if beneficial to require a basic level of monetary education or experience for voters to be permitted to vote for central bank governors. Such an education could be provided at no cost possibly at the secondary level (high school) of education.
The CB may fund itself by printing all the money necessary to underpin its operations in a transparent and accountable manner or it may impose an annual fee on citizens. This fee could be deducted from the heli drops the public receives so that people don’t pay fees they just receive an small reduction in the amount of money received through the heli drop.
The monetary authority should be recognized as a separate arm of government and be fully independent from the executive arm of the government much like the judiciary or legislature. Conflicts of interest arise when the central bank loses its independence. Political interference of monetary policy by the executive or legislative arm of government will adversely affect its performance. Under an independent central bank monetary policy can’t be manipulated ahead of elections, or to support political aims. Money system should not be captive to politicians.
Monetary Policy which includes managing the nations money and payments system is an important task that requires its own dedicated institution.
Concentrating too much responsibility under the executive or legislative arm of government will increase the amount of tasks needing to be managed by a single entity and therefore confuse and reduce the focus required to effectively manage the monetary and payments system which will result in inferior management outcomes. For example sometimes the government may invest in unnecessary infrastructure just to increase the money supply not because the infrastructure is needed. Government should focus on fiscal policy and regulations in order to create most efficient economic system. Central bank should manage monetary policy in order to create most balanced, stable and efficient monetary system to underpin the efficient functioning of real economy. Specialization makes for more effective policy making.
Less confusion or obfuscation and greater accountability will prevail if monetary authority is solely responsible for monetary policy.