Libertarians talk about the Federal Reserve with the same gusto of conservatives talking about the dangers of Islamic terrorism and the left talking about white privilege. It’s engrained in us, a basic part of our ideology. So, as you might imagine, we are highly intrigued by the “Audit the Fed Bill” being re-introduced by Senator Rand Paul and his fellow Kentucky lawmaker, Congressman Thomas Massie.
Yet, much of what the Federal Reserve, aka the creature from Jekyll Island, does is kept hush-hush. Few are sure of how it operates and it is rarely discussed by the two major parties. This means many Americans are puzzled when the “Audit the Fed Bill” is brought up in discussion.
So, what exactly is “Audit the Fed” and what does it entail?
The Federal Reserve is an independent government agency that is ultimately unaccountable to the public and Congress. The Congress established maximum employment and stable prices as the key macroeconomic objectives for the Federal Reserve in its conduct of monetary policy.
According to Campaign for Liberty, the Audit the Fed Bill removes the auditing prohibition that has been placed on the Governemnt Accountability Office concerning four specific areas of the Fed:
“1. Transactions for or with a foreign central bank, government of a foreign country, or no private international financing organization;
2. Deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
3. Transactions made under the direction of the Federal Open Market Committee; or
4. A part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.”
The passage of Audit the Fed would be great for the country beacuse the Federal Reserve Act of 1913 has been destructive to the American public in several ways.
First, the Federal Reserve has far too much power over the entire economy and has destroyed our currency. The Fed controls and determines the money supply. It creates as much money as it wants out of thin air without restrictions or limits. In fact, the Federal Reserve was the Chief culprit behind the financial collapse of 2008, as well as the great depression. Its unchecked power has created boom and bust business cycles and causes one financial bubbles that inevitably pop. Its creation of fiat currency has destroyed 96% of our currency since 1913.
Second, the Federal Reserve hurts the poor and middle class. When the Fed creates fiat money out of thin air it acts as a hidden inflation tax – an increase in the supply of money and credit. This destroys the purchasing power of middle class and poor Americans because it directly results in higher prices. Consumers with less disposable incomes are those most harshly impacted by higher prices for common and necessary items.
Third, the Federal Reserve benefits special interests and routinely bails out big banks. The Federal Reserve’s bailed out major banks to the tune of $7.7 trillion dollars in addition to the $700 Billion TARP Bailouts. According to Bloomberg Markets Magazine, $7.7 trillion is the amount in More than 21,000 undisclosed loans the Federal Reserve made to struggling financial institutions
Finally, the Federal reserve creates much unconstitutional spending and causes all hell to break loose. The creation of money out of thin air allows the federal government to fund things like the welfare state (both corporate and Individual), the military state that keeps troops in over 100 countries, and the costly and failed war on drugs. It helps fund unconstitutional agencies like the Department of Education and the Department of Energy, and it allows for funding of crippling programs, like Obamacare and federally backed loans that helped create the housing bubble and the foreclosure crisis a few years back. If the Fed didn’t create money out of thin air and our money had to backed up by a commodity like gold, we wouldn’t have the money to pay for any of these destructive policies or agencies.
Senator Paul and his dad have been pushing lawmakers to audit the Federal Reserve for decades. Despite 75 percent of Americans agreeing with them, efforts in the past stalled in Congress and were shot down largely by Democrats, outside of Bernie Sanders. But finally, it is Republicans belief that this Bill has legs this time around, as it has support from President Trump.
Not only has President Trump met with bankers who are in favor of ending the Fed outright, including John Allison, but he’s also not a politician. He is business man at heart, and ending the Fed is good business.
The newly elected President has even put his money where his mouth is: He agreed to accept three 32-ounce bars of gold in lieu of cash in a deal with APMEX (American Precious metals exchange) for the 50th floor of the Trump Building at 40 Wall Street. This makes Businessman Donald Trump’s support all the more logical. Ending the Fed benefit him tremendously on this deal.
If Audit the Fed is passed, there will be a level of accountability and transparency introduced to the Federal reserve. Their dealings will be exposed to the general public, which will have full knowledge of their transactions, monetary policies, and deliberations. This could bring the 100 plus year failed experiment that is the Federal Reserve to an end and a reinstatement to the Gold Standard.