by Ron Paul: Americans
Deserve a Transparent Fed
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I was pleased
last week when we won a vote in the Financial Services Committee
to include language from the Audit the Fed bill HR1207 in the upcoming
financial regulatory reform bill. As it stands now, if HR 3996 passes,
because of this action, the Federal Reserve’s entire balance
sheet will be opened up to a GAO audit. We will at last have a chance
to find out what happened to the trillions of dollars the Fed has
been giving out.
blanket restrictions on GAO audits of the Fed that have existed
since 1978 will be removed. All items on the Fed’s balance
sheet will be auditable, including all credit facilities, all securities
purchase programs, and all agreements with foreign central banks.
To calm fears that we might be trying to substitute congressional
action for Fed mischief in tinkering with monetary policy, we agreed
to a 180-day lag time before details of the Fed’s market actions
are released and included language to state explicitly that nothing
in the amendment should be construed as interference in or dictation
of monetary policy by Congress or the GAO. This left no reasonable
objections standing and the amendment passed with a vote of 43 to
This was a
major triumph for transparency and accountability in government.
With unprecedented turmoil in the financial markets, the people
are demanding to know and understand the extent of the Federal Reserve’s
involvement in the creation of out-of-control business cycles, who
they are helping, and how. We need information. The excuses for
not giving out this information are flimsy at best, and the passage
of this amendment is a major step to finally getting at the truth.
Of course I
could not have done this without the help and support of many other
members who have been strong allies in this fight. Having over 300
cosponsors was obviously helpful.
great as this victory is, we have to remember that this amendment
is attached to a bill that would give sweeping new powers to the
Federal Reserve. The Fed has taken its mandate to maintain stable
prices and full employment and used its immense power to help elite
friends at the great expense of everyone else. The answer is not
to increase their powers and ability to interfere in the economy,
but that is what the legislation will do. It is a disaster waiting
to happen, and unfortunately it looks as if it will pass.
At least with
the Audit the Fed amendment attached to the bill, the Fed will not
be able to do its destructive work in secret. The people will know
exactly who the beneficiaries are of this immoral system of money
Paul is a Republican member of Congress from Texas.