Audit the Fed

Federal Reserve cartoon

Sen. Rand Paul (R-Ky.) and Rep. Thomas Massie (R-Ky.) have just reintroduced legislation for an audit of the Federal Reserve. And the lawmakers contend that President-elect Donald Trump’s signaled support for the bill means it’s more likely than ever before that an audit is on the horizon.

“No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve, yet Fed Chair Yellen refuses to be fully accountable to the people’s representatives,” Paul said in a statement.

The lawmaker added: “The U.S. House has responded to the American people by passing Audit the Fed multiple times, and President-elect Trump has stated his support for an audit. Let’s send him the bill this Congress.”

Despite House approval, previous Fed audit initiatives have been stalled by bureaucratic scaremongering that an audit would cause economic collapse and White House veto threats.

Former Fed chairman Ben Bernanke frequently warned that an audit of the central bank would give Congress too much power to stymie economic efforts via political squabbling.

“A repudiation of the independence of the Federal Reserve would be highly destructive to the stability of the financial system, the Dollar and our national economic situation,” Bernanke has said.

Current Fed chair Janet Yellen is known to parrot similar lines about the importance of Fed autonomy in making economic decisions.

She recently said: “For 50 years congress has recognized that there should be an exception to GAO ability to audit the fed to avoid any political inference in monetary policy I believe it’s critically important for the economic performance of this country and we’ve seen this around the world that allowing a central bank to be independent in forming monetary policy is critical to assuring markets and the public that we will achieve price stability and I would be very concerned about legislation that would subject the Federal Reserve that could interfere with that independence.”

But others suggest that the shocking revelations Americans would garner via a Fed audit have more to do with officials’ reluctance to let it happen than the need for behind the scenes financial meddling to keep the economy afloat.

Andrew Levin, special adviser to then Fed Chairman Ben Bernanke between 2010 to 2012 who is now an advocate for restructuring the Fed, contends that most Americans would be shocked and appalled to learn the extent to which private interests control the Federal Reserve.  He argues that the Fed “should be a fully public institution just like every other central bank.” Of course, many Americans are already duped into believing it is.

And for those who aren’t, the point of auditing the Fed is blowing the current secretive institution apart in favor of an option better for the public.

Paul’s father, retired Congressman Ron Paul, has been saying this since he began the push to expose corruption in the Fed decades ago. The elder Paul’s hope has been that revealing the central bank’s true actions to Americans would enliven calls for the nation to return to a sound money standard.

In a lengthy statement, Paul expressed optimism for the current audit legislation, saying:

I applaud my son Senator Rand Paul and my friend Representative Thomas Massie for their leadership on the important issue of auditing the Federal Reserve. Audit the Fed is the type of change the American people demanded when they went to the polls last November.

For 105 years, the Federal Reserve has exercised almost absolute and unquestioned authority over America’s monetary policy. The result has been a boom-and-bust business cycle, growth in government, increasing income inequality, and a loss of over 90% of the dollar’s purchasing power. No wonder almost 80% of Americans support Audit the Fed!

While campaigning for President, Donald Trump not only criticized the Fed’s easy money policies, he also endorsed Audit the Fed. With a President who supports Audit the Fed finally sitting in the White House, Congress has no excuse to not quickly pass this bill and finally let the American people know the truth about the Fed’s conduct on monetary policy, including its dealings with foreign governments and central banks.

If Trump supporters were serious about voting for the president-elect because of his promises to revive the economy for middle class Americans and eliminate that DC corruption that’s held them back for decades, this is one area on which they must pressure the administration to follow through.

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