Audit The Fed Update

By Bruce Layne:

The Federal Reserve was created in 1913 and has never been audited. The Fed was ostensibly created to stabilize the US economy, and their two primary functions were to ensure full employment and prevent inflation. The real rate of unemployment that includes people who are able to work but prefer government assistance and those who have been unemployed so long they've given up is approximately 20%, and the purchasing power of our dollar has decreased to three cents during the century that The Fed has been in operation. The Fed hasn't eliminated unemployment or even decreased it, and has caused inflation by keeping interest rates artificially low which results in a short term false sense of prosperity that is equivalent to running up credit card debt for our children to pay. The recent housing bubble crash, credit crisis, Wall Street bailouts and nationalizing GM and AIG are all the result of The Fed causing a problem and then creating money out of thin air to paper over their problem, thus causing an even larger problem.

The recent economic problems strongly indicate that The Fed is failing at their primary missions, and have resulted in the political will to open the books of The Fed so we can see what they've been doing. HR 1207 is an unusually short bill that was introduced by Congressman Ron Paul (R-TX) into the House on February 26th 2009 to provide for a complete and ongoing Federal Reserve audit by the Comptroller General of the United States. It gained 319 cosponsors, including all six Kentucky congressmen, and eventually passed as amendments in the House Financial Services Committee and in the House. The companion bill, S 604 was introduced into the Senate by Bernie Sanders (I-VT). There has been strong public support for auditing The Fed, but DC has largely stonewalled those efforts. The Fed took the unprecedented step of hiring the public relations consultant who previously worked for Enron.

Recent Developments: Senator Chris Dodd (D-CT) and a few other Fed-loving senators rewrote the Senate version of the Financial Reform Bill to strip out the audit provisions and instead give The Fed more power. Senator Sanders (I-VT) introduced a floor amendment to reinstate the audit provisions, but later withdrew that amendment after being pressured by The Fed and the Obama administration. The bill with the pro-Fed provisions passed 96-0 on May 11th, 2010. Senator David Vitter (R-LA) attempted to reinsert the stronger audit provisions, but that amendment was defeated 62-37 on May 11th, 2010. Senator Jim Bunning (R-KY) voted for Vitter's amendment to reinstate the audit provisions, and Senator Mitch McConnell (R-KY) voted against it.