Impacts and purposes of Federal Reserve Bank monetary policy

Economically, the "Great Depression" had a much larger effect than the "Great Recession" according to the following infographic. However, what stands out the most is the increase in money supply, also known as liquidity, during the Great Recession. Specifically, the Federal Reserve Bank increased money supply by 125% whereas during the depression, the Federal Reserve only increased money supply by 17%.

The effects of such an aggressive monetary policy are economic stimulus via a decline in the value of the dollar, and more affordable interest payments on U.S. securities. To illustrate, when monetary policy facilitates lower interest rates on debt, variable rate U.S. treasury payments decline costing the country less. Also, when the government pays foreign governments interest on Treasury Securities, even if the interest rate remains the same, the value becomes lower as the dollar is worth less via looser monetary policy. Additionally, as the dollar declines, multinational corporations bringing money back to the U.S. that was earned in a foreign currency becomes worth more, nominally speaking.

Monetary policy is not without its critics however. This is evident in the second infographic below. Moreover, opponents of the Federal Reserve claim loose monetary policy creates asset bubbles, raises the cost of oil that is priced in dollars, facilitates higher national debt that is currently over $15 trillion, and decreases the worth of individual Americans via dollar devaluation and inflation.  What's more, since the Federal Reserve Bank has not been fully audited, the central bank lacks credibility per its skeptics.

How the Great Depression differs from the Great recession:

The Great Depression vs. The Great Recession by Payday Loan.co.uk

Why the Federal Reserve Bank's monetary policy is controversial:

Source: Best Accounting Schools