Since the Federal Reserve was created by Congress in 1913, we have seen the value of the dollar shrink by 97 percent. Current measures of unemployment show real unemployment to be over 15 percent. Price inflation is rampant, as you can see at your local grocery store.
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Clearly, the Federal Reserve has failed its dual mandate. It has failed to keep inflation low and has failed to keep the United States at full employment.
But this failure stems from something much larger: the inherent incapability of central planning and central banks to successfully manage the economy, which free market economists have long warned about.
Since the 2008 financial crisis, we have seen Wall Street boom, while so many Americans struggle to put food on the table. We were told that the only way to save the economy was for the Federal Reserve to print massive amounts of new money through so-called “Quantitative Easing.” We were told unemployment would be low. Yet here we are, six years later, and the Federal Reserve’s unprecedented economic experiment has made matters worse.
The Fed’s leaders are apparently terrified of what a substantive, thorough audit might show. And they should be. In 2010, my organization Campaign for Liberty and its grassroots members achieved a limited, one-time audit of the Federal Reserve through an amendment to the Dodd-Frank Act.
And America was shocked at what we learned: the Federal Reserve loaned out over $16 trillion- four times the annual budget of the United States- to AAA-rated foreign central banks and private companies over just a two-and-a-half-year window. This happened in secret, without Congressional oversight, and without the consent of the American people.
The American people should know and deserve to know what the Federal Reserve is doing to our money and our nation’s economic future.
New Federal Reserve Chair Janet Yellen argues that auditing the Federal Reserve would violate the Fed’s “independence” and make it a “political institution.” But the Federal Reserve is anything but independent. As noted above, the Fed was created by Congress, and its Board of Governors are nominated by the President and confirmed by the Senate. Which part of that is independent?
We are constantly told by a government that seeks to learn everything about us that we have nothing to fear if we have nothing to hide. Well, the same can be said about the Federal Reserve.
Thanks in large part to the work of Campaign for Liberty and other like-minded Americans, legislation to thoroughly audit the Federal Reserve passed the House of Representatives on September 16, 2014, by a vote of 333-92.
That this legislation received such support is no surprise- nearly 75 percent of the American people support a full audit of the Federal Reserve. And as recently as 2010, when he was up for reelection, Senate Majority Leader Harry Reid was one of those Americans.
It is time for Harry Reid to listen to the American people and hold a vote on Audit the Fed. One hundred years of failure is too long to allow the Federal Reserve to continue to operate in secret.
I urge Harry Reid to do the right thing and hold a vote on S.209, “Audit the Fed.”
Ron Paul is a former congressman for Texas’ 14th District and three time presidential candidate.