Audit the Fed

Imagine parents, overwhelmed by debt and months behind on their bills, sent their spendthrift teenagers out each weekend for a night on the town with credit cards and blank checks.  Would anyone be surprised if this family never got their finances under control?

Yet, that is how our government, which is almost 17 trillion dollars in the red, behaves by entrusting taxpayers’ financial futures to the Federal Reserve, which pumps money into the economy whenever it chooses and makes secret deals with Wall Street executives, foreign central banks, and other politically-connected insiders without any significant oversight from Congress.

Sneaked through Congress on Christmas Eve in 1913, the Federal Reserve Act established the Fed as America’s central bank.  The Fed essentially creates money out of thin air, manipulates interest rates, and interferes with the free market.  By doing so, the Fed fuels our economy’s boom-bust cycle and has helped devalue our dollar by over 95%.

According to the Minneapolis Federal Reserve branch’s own website, what you could buy with $1.00 in 1913 would now cost you $22.55.

Although Congress and the Treasury helped bring about the housing bubble and financial collapse with legislation, regulations, and keeping the funds flowing to reckless institutions like Fannie Mae and Freddie Mac, the Fed was the main cause of the crisis.  Its interference in setting interest rates distorted the market, and its status as the “lender of last resort” ensured banks could hook individuals and businesses for loans on projects that weren’t in as high demand as forecasters believed.

When the crash occurred, common sense dictated a change in policy, but the Federal Reserve only increased its lending and intervention to historic highs.

While selling Americans a bill of goods that the economy would never recover without unprecedented bailouts, we now know that at the peak of its “emergency lending,” the Fed was providing nearly 90% of its discount window loans to foreign banks!  This included making over 70 loans to a bank partially owned by the Bank of Libya.

The Fed was able to get away with these actions because Congress lacks the authority to thoroughly and completely audit it.  In fact, former Federal Reserve Chairman Ben Bernanke appeared before Congress early in the crisis and was able to refuse a direct request to disclose which institutions were receiving trillions of taxpayer dollars from the Fed.

Ken Van Doren will push for a full audit of the Federal Reserve to expose exactly what they are doing with your money.

Posted in Issues
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