By Justin Williams
In 1983, largely due to the policies of the Fed Chairman Paul Volcker and President Ronald Reagan, the American people were finally rid of the burden of astronomical inflation. The policy of the Carter Administration attempting to offset unemployment with having the Federal Reserve print money was at last at an end.
At the same time, a fresh-faced congressman named Ron Paul (R-TX) decided that because of this, it was a good opportunity to investigate the very institution that had helped wreak havoc on the economy with runaway inflation. That same year, he proposed H.R. 877 a bill that would allow the General Accounting Office (GAO) to audit the Federal Reserve Board, the Federal Advisory Council, the Federal Open Market Committee, and the Fed banks and branches themselves.
Dr. Paul was able to garner only 18 co-sponsors on that bill, which died with little to no support. Like many of his bills, supporting liberty and transparency, it was sent to committee were it ultimately met its slow and unheralded death.
But, that was then and this is now. With the Federal Reserve, loose monetary policy, and impending inflation making headlines in the mainstream media, more attention is finally being paid to a near identical bill—H.R. 1207—that Congressman Paul reintroduced in February of this year.
Already, just four months later, H.R. 1207 has a staggering 237 co-sponsors. And now a full-blown audit of the shadowy, secretive, bureaucracy Wall Street Journal writer Steve Moore, in an interview with the Washington News Observer (WNO) calls, “a threat to representative government,” appears imminent.
The fact is, the history of the Federal Reserve is one that can be easily summarized with a foggy picture of Soviet-style central planning causing major booms and busts since the entity’s inception in 1913. For example in a recent WNO interview, Dr. Paul characterizes the Federal Reserve as being the creator of “the inflation of World War I, the depression of 1921, the inflation of the 1920s, and the Depression of the 1930 and on and on.”
Paul compares these events—each caused at least in part by the Fed’s loose money policies—to the current situation with the credit and housing crises, which have put the nation into a deep recession.
The purpose of the Paul bill, now gathering support, is to help Congress and the American people prevent another financial disaster due to the Fed’s constant policy of offering loose credit and encouraging bad lending practices. Plus, it will enable Congress to keep an eye on the current bailout money in order to prevent abuse and fraud.
One issue the bill’s sponsors on either side of the aisle seem to be in lockstep agreement on: the government-granted monopoly over one of the most important units of currency is way too much power to leave to an unelected body that, in one swift action with the printing press, could destroy a nation.
Now the former 2008 Presidential candidate, who was characterized in the media as being insane for bringing up reform in the area of monetary policy, is finding plenty of support. Or as Dr. Paul said in his interview, all of a sudden more than a quarter century after he first proposed it, “…now it is popular to get transparency of the Fed.”
It is as if “everything old is new again”—only this time, with teeth in it.
Justin Williams is a Contributing Editor of ALG News Bureau.
