October 26, 2009 - By True Patriot and
Congressman
Ron
Paul
Last week a new bill was introduced in the Senate to audit
the Federal Reserve. Some backers of my bill HR1207 and the
existing Senate companion bill S.604 were a little miffed
at this, but depending on how you think about it, this new
legislation poses no great threat to our efforts.
With the economy in shambles, people are looking for answers
- not just because of lost savings on Wall Street, but because
of lost houses on Main Street. Because of the many problems
we face, the Federal Reserve and its powers over the economy
have come under scrutiny. This translates into a lot of political
pressure on Congress. With all the House Republicans signed
on as co-sponsors and over half of the Democrats, HR 1207 has
enormous bipartisan support. It would be disingenuous for Washington
not to embrace the principles behind this bill after all the
promises for transparency. How can one credibly argue for more
transparency in government in one breath and defend the secrecy
of the Federal Reserve in the next?
However, there is still very powerful resistance to the disclosures
that HR 1207 would require and efforts to weaken it will continue
to pop up before this issue is settled.
The good news is that Washington is responding and the Federal
Reserve has become the issue. Concerned Americans need to keep
the pressure on by continuing to define what we want, and what
we do not want.
One major concern is that HR 1207 constitutes some kind of
power grab for Congress. Congress would not do a better job
dictating interest rates or managing money supply growth than
the Federal Reserve does for exactly the same reasons: Congress
is not the free market. Any select group of people, no matter
how wise and educated, simply cannot replace the wisdom of
the market. HR 1207 does not seek to replace the wisdom of
the Fed with the wisdom of Congress. That would be a giant
step backwards. HR 1207 simply asks for full disclosure, and
I am agreeable to allowing for a reasonable lag time to calm
the fears that Congress intends to dictate monetary policy.
What we do want, what we insist upon, is that no longer will
decisions that carry so much economic weight be made in absolute
secrecy. We want to know what arrangements the Fed makes with
other governments and central banks. We want to know who is
benefitting from the actions of the Fed and what deals are
being made. The Fed is already reacting to pressure by scaling
back its liquidity facilities and returning to more traditional
monetary policy through direct asset purchases. With nearly
$800 billion in mortgage-backed securities on its books already,
$800 billion in Treasury securities, and no real limit to what
the Fed can acquire, there is a tremendous opportunity for
malfeasance. We need to know who the Fed deals with, what they
buy, how much they spend, and who benefits. As good as any
step towards Federal Reserve transparency is, anything less
than full disclosure at this point is unacceptable.
Read more Articles by Ron Paul at http://www.house.gov/paul/legis.shtml
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