Bill seeks to abolish the Fed
By Joe Baker, Senior Editor
Texas Republican Ron Paul has introduced legislation in the U.S. House calling for abolishment of the Federal Reserve and restoration of the gold standard.
In presenting his bill, Rep. Paul said: Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserves inflationary policies. This represents a real, if hidden tax imposed on the American people.
Rep. Paul continued: From the Great Depression, to the stagflation of the 70s, to the burst of the dotcom bubble last year, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial boom, followed by a recession or depression when the Fed-created bubble bursts.
Paul said a stable currency would benefit U.S. exporters and provide Americans with new incentives to save because they would no longer have to fear inflation eroding their savings.
He said the present policy, while it harms the average citizen, benefits insiders or those in a position to know and take advantage of the cycles in monetary policy. Those with access to artificially inflated money and credit before the effects of the policy affect the entire economy, stand to benefit. Paul said it also aids big-spending politicians who use the Feds inflated currency to mask the real costs of the welfare/warfare state.
The Texas Republican said doing away with the Federal Reserve would allow Congress to reclaim its rightful responsibility and constitutional authority for monetary policy. The Constitution vests the authority to coin money and regulate the currency solely with the Congress. It does not permit Congress to delegate that authority to a central bank.
When the country was launched, its currency was backed by silver and gold. They were legal tender. Rep. Paul believes we should return to that system and create a consistent value to our money. Such a system, he said, is the basis of a true free-market economy.
Abolishing the Fed, he stated, would halt manipulation of the money supply which erodes our standard of living, enlarges big government and enriches the well-connected elites.