Foreign-held paper dollars are no longer converted for gold, thereby nullifying in an important aspect the Bretton Woods Agreement
A nation that is dependent upon imports simply couldn't maintain a restriction on its currency-creating power, such as the gold standard imposed. American consumerism pulled the world out of a post-war depression, but balancing payments in gold was no longer possible.
One could state that leaving the gold era behind, forcing much of the modern world into accepting fiat currency, extended the practical application of Bretton Woods beyond its inevitable sunset as the production capacities of our trade partners were rebuilt. The shift in America from a dominant producer to a consumer-based economy was only possible with a free-floating fiat currency.
This was adopted domestically in '34 under FDR and was perhaps the most important economic event since the invention of currency. It completely changed how money is created, and destroyed. It made "taxing for revenue" effectively obsolete and positioned the national debt as the net money supply, not a mortgage on future productivity.
If our political system can evolve to take advantage of this it can forever remove the "How will you pay for it?" question from federal spending, making any suffering by the people that can be mitigated with spending entirely a "political decision", not economics. Let the politicians explain why they "want" hunger, homelessness, lack of access to medical care, and so many other social problems, to keep the population in constant precarity. It is no coincidence that such precarity serves to keep labor docile and controlled by capital.
NOTE: Wilson signed the Federal Reserve Act of 1913, establishing the Federal Reserve System, the largely private/corporate central banking system in the US.
This is an absurd characterization of the system mostly attributable to crackpots and conspiracy theorists. What other "private" entity has leadership appointed by the Executive and shares a balance sheet with Treasury making all "profit" moot?
As money is created by Congress (Article 1: Section 8) it needs an entry point into the private sector where payments must be cleared for government spending. The Fed provides that as the nation's clearing bank. Since "all" spending at the federal level is via newly created currency in the private sector it can appear as "lending" by the Fed when it appears from thin air via keystrokes.
Federal Reserve Notes, incidentally, are the only type of currency now produced for circulation. They are printed exclusively by the Treasury’s Bureau of Engraving and Printing, and the $20.60 per thousand price reflects the Bureau’s full cost of production.
Paper and coin money are "services" provided to banks as they request. Their digital reserve balance with the Fed is debited for what they "purchase". This represents only a small portion of "money" in our system and fluctuates seasonally. It allows those who are "unbanked" to participate in the economy, but it also introduces its own cost in criminal activity and other societal costs.
