Originally posted at FreedomWorks.org.
23 more Republican Senators (edit: now 19!) to go!
House Majority Leader Eric Cantor recently announced his intention to bring Rep. Ron Paul’s audit the Fed bill to a floor vote in July. According to the Library of Congress’ THOMAS website, H.R. 459, the Federal Reserve Transparency Act of 2011, currently has 245 cosponsors.
FreedomWorks has identified 30 (edit: now 14!) Republican House members who have not cosponsored the audit the Fed bill.
I urge you to contact the following representatives below and urge them to cosponsor H.R. 459 today.
*Speaker of the House. Rarely cosponsors bills.
**Majority Leader. Rarely cosponsors bills.
Click here to see FreedomWorks’ letter in support of H.R. 459.
Click here to contact your representative and ask him or her to cosponsor H.R. 459.
Edit: It is interesting to note that Reps. Boehner, Brady, Cantor, Issa, King, Nunes, Reichert, Royce, and Ryan all cosponsored Ron Paul’s identical bill (H.R. 1207) in 2009.
What are they waiting for?
The Federal Reserve fought tooth and nail for over two years to keep their actions hidden from the American people. The central bank lost part of their battle for secrecy when they were court ordered through a Freedom of Information Act request to release 29,000 pages of documents earlier this year. Although it was just a one-time and limited release of their records, the papers revealed that one of the largest recipients of the Fed’s money was foreign banks during the 2008 economic meltdown. Bloomberg News has further examined the thousands upon thousands of pages of transactions to discover more Fed secrets.
The Federal Reserve had committed $7.77 trillion as of March 2009 to “rescuing” the financial system, according to a new study from Bloomberg News. The Fed also kept secret which banks were in trouble during the height of the financial crisis while bankers were taking in tens of billions of dollars in emergency loans. Bloomberg has calculated that the secret Fed loans helped banks net a whopping $13 billion. All of these numbers are staggering but not exactly surprising. The unelected bureaucrats at the Federal Reserve have fought to keep their dealings behind closed doors for a reason.
Fed Chairman Ben Bernanke has become desperate to protect his privileged secrecy. Bloomberg writes that he “argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort — and that needy institutions would be reluctant to borrow in the next crisis.” Helicopter Ben, a nickname he acquired by essentially stating that the government could “defeat” deflation by dropping money out of helicopter, cares more about protecting the reputation of his cronies than letting the American people know where their money is going.
Bloomberg reports that Fed officials haven’t told the truth about the bank bailouts. The news agency writes that, “while Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.” The Federal Reserve is ripping off the American people by printing money out of thin air which devalues the value of the dollar to bail out the big banks.
As Senator Rand Paul (R-Ky.) writes, “this is just one more reason why we need a full audit of the Fed.” The court ordered released documents are disturbing enough. But imagine what kind of mischief we would find out through a comprehensive audit. A real audit of the Fed would also inspect how it determines interest rates which is one of the most crucial activities of the central bank. We still need to pass a true audit of the Fed such as Sen. Rand Paul and Rep. Ron Paul Federal Reserve Transparency Act of 2011 that would require comprehensive audits on a regular basis.
An overwhelming 75% of Americans want a comprehensive audit of the Federal Reserve, according to a recent Rasmussen poll. The calls for a true audit are getting louder and stronger by the day. The fight for transparency is transcending party lines with fiscal conservatives such as Ron Paul and self-identified Democratic socialist Senator Bernie Sanders working together to remove the Fed’s cloak of secrecy. More Republican presidential candidates are starting to echo Ron Paul’s long held beliefs on the Fed.
We will win our immediate goal when the Fed is thoroughly audited. Then the next step becomes ending the Federal Reserve and finally restoring sound money in America.
Occupy Denver protests outside Federal Reserve building on 11/12/11. I am not associated with Occupy Denver. To be fair, quite a few people I asked said they didn’t know enough about it to speak on camera and others said they hadn’t formed an opinion yet.
Blog below originally posted at FreedomWorks.org.
I’ve been closely following the loosely organized Occupy Wall Street protests on social media sites over the past few weeks. Now, I’m all for citizen activism and freedom of assembly, but I’m still unconvinced that most these protesters know what exactly their protesting. They’re angry about the state of the economy and rightfully so. While I sympathize with their frustration towards our weak economy, their anger is largely misdirected. They would be better off to pick up and move their protests down a few blocks to the New York Federal Reserve building.
Many of the Wall Street protesters are holding up anti-capitalism signs that read “capitalism doesn’t work” and “capitalism oppresses love.” These posters are grossly illogical because we have never even had a capitalist system. The United States economy is better described as a mixed economy, an admixture of capitalism, corporatism and socialism. Interviews with protesters on the ground suggest that they do not comprehend the difference between capitalism and corporatism. It’s an odd sight to see a bunch of individuals in Che Guevara shirts (who was a murderer, by the way) with fancy iPads and Mac laptops protesting so-called capitalism.
Capitalism is often regarded as a dirty word for all the wrong reasons. The greatest economic system in the history of the human race has a bad rap mainly due to a fundamental misunderstanding of capitalism itself. The term essentially means economic freedom. Individuals are free to make their own choices on what to own, produce, buy or donate. Milton Friedman was correct in saying that, “underlying most arguments against the free market is a lack of belief in freedom itself.” All other economic systems are characterized by central planning and control, which rests on state coercion.
Those who equate capitalism with corporatism are making a huge mistake. Corporatism is a system where businesses are allegedly in private hands but are actually controlled by the government. In a corporatist state, the government often grants special privileges and favors to big businesses such as bailouts, tariffs and subsidies. Many top Wall Street executives like to consider themselves “capitalists” as they live off of the taxpayer’s dime. None of these sweetheart deals would exist in a pure free market capitalist system. Businesses would be forced to sink or swim on their own merits. As the famed Austrian economist Ludwig von Mises stated, “what pays under capitalism is satisfying the common man, the customer. The more people you satisfy, the better for you.”
The Occupy Wall Street website—which surely does not represent the views of all the protesters—has released a 13-point list of pro-government demands. OccupyWallSt.org demonstrates their economic illiteracy by demanding free college education for all, one trillion dollars in infrastructure and ecological spending. One little detail is missing: who is going to pay for all of this?
The government is not Santa Claus; every dime that it spends must be first forcibly taken from someone else. The movement calls itself “peaceful” while advocating that Americans surrender more money to the government under the threat of brute force. If you’re uncomfortable stealing from your neighbor, don’t demand that the government to do it for you.
Some real defenders of capitalism are hitting the streets in an attempt to educate the Wall Street protesters. They’ve got their work cut out for them. The OccupyWallSt.org wish list includes raising the minimum wage to $20 per hour and raising tariffs on all imported goods. Anyone who has passed Econ101 should hopefully know that these policies would dramatically increase the price of goods and cause a massive amount of Americans to lose their jobs. Their demands, if implemented, would disproportionally hurt the poor and increase corporatism in America.
Capitalism is not to blame for our economic woes and more government regulation is not the solution. The Federal Reserve is largely to blame for the financial crisis. Without the Fed, Washington couldn’t have bailed out Wall Street. The first ever—but one-time and limited—audit of the Fed back in July revealed that the central bank “loaned” out $16 trillion at a zero percent interest rate to corporations and banks around the world during the height of the financial crisis. Why then has the list of Occupy Wall Street demands completely ignored the Fed? No serious economic movement can overlook the Fed which literally creates unlimited amounts of money out of thin air.
Many of the Wall Street protesters may be well-intentioned but lack basic economic knowledge. Political philosopher Robert Nozick said my thoughts perfectly, “it is strange that many young people in tune with nature and hoping to go with the flow and not force things against their natural bent should be attracted to statist views and socialism, and are antagonistic to equilibrium and invisible hand processes.” The Wall Street protesters would be better off to direct their focus to the correct target: Washington and the Federal Reserve.
Originally posted at FreedomWorks.org.
Speculation has risen that Fed chairman Ben Bernanke may announce yet around round of quantitative easing or QE3 on Friday. As economist Thomas Sowell says, “when people in Washington start creating fancy new phrases, instead of using plain English, you know they are doing something they don’t want us to understand.” The term quantitative easing in layman’s terms just means that the Fed will print more money out of thin air. What could possibly go wrong? Well, for starters, the value of the U.S. dollar will continue to decline and it could set the stage for hyper-inflation.
Of course, the first two rounds of quantitative easing have failed miserably to stabilize the economy. This should have signaled that pumping new money into the economy is just not the solution. But Fed officials who have refused to accept reality continue to run the printing processes on overtime. After QE3 fails—and it will—we might as well expect to see QE4, QE5 and so on until the dollar is literally worthless.
The actions of the Federal Reserve have a dramatic impact on the lives of every single American. The central bank essentially controls the value of the money that we have in our pockets. QE1 and QE2 can be blamed in large part for the skyrocketing price of food at the grocery store. The same supply and demand rules apply to money. The more dollars we have in the circulation, the less valuable the money becomes. The Fed is a main reason why it’s costing us more dollars to fill up our gas tank nowadays.
For decades, Rep. Ron Paul (R-Texas) was the lone voice in Washington speaking out against the Federal Reserve. He writes that “the inflation tax, while largely ignored, hurts middle-class and low-income Americans the most. Simply put, printing money… dilutes the value of the dollar, which causes higher prices for goods and services. Inflation may be an indirect tax, but it is very real — the individuals who suffer most from cost of living increases certainly pay a ‘tax.’” QE1, QE2 and QE3 are nothing more than stealing wealth from the people through the hidden tax of inflation.
Our Founding Fathers would surely be outraged by the existence of the Fed. These great men believed in a limited government that was held accountable to the people. The Federal Reserve, which is generally regarded as a quasi-governmental entity, has less oversight than even the Central Intelligence Agency (CIA). The most powerful central bank in the world makes all of its decisions without even a single vote from our elected representatives in Congress.
You can bet that the Fed is up to no good behind closed doors. Due to a provision under the misguided Dodd-Frank financial overhaul law, the Government Accountability Office (GAO) conducted a one-time, watered-down audit of the central bank back in July. It gave the American people their first peek into the central bank’s books but prevented investigators from peering into their deliberations on interest rates and the most crucial transactions of the Fed. We still need to pass a true audit the Fed bill like Ron Paul’s Federal Reserve Transparency Act of 2011 that would require comprehensive audits on a regular basis.
The first ever audit revealed that the central bank “loaned” out $16 trillion at a zero percent interest rate to corporations and banks around the world during the height of the financial crisis. To put that number into perspective, the Gross Domestic Product (GDP)—the value of all economic activity within a country— of the United States is only $14.12 trillion. It’s no wonder that the Fed is desperately trying to protect their privileged secrecy.
The Fed used to be the giant elephant in the room that nearly everyone ignored. We can see the political tide shifting since it has suddenly become popular to criticize the Fed. I have a strong feeling that the rise of the Ron Paul phenomenon has something to do with it. The author of the book End the Fed just might be onto something. A true audit is the first step to letting the American people know what’s going on with their money. The next step is to abolish the Federal Reserve System.
Here is a video of my Federal Reserve and International Monetary speech from the FreedomWorks grassroots bootcamp over the past weekend:
I’m first going to address the Federal Reserve. Monetary policy is an extremely important issue. I think we’re in huge trouble. I do believe that we will be facing a dollar crisis in the near future if we don’t return to sound money. Many notable Austrian economists such as Peter Schiff and Jim Rogers are saying we haven’t seen anything yet. Just so we’re on the same page, the Austrian school of economics is a free market school of economics. Some of its founders were from Austria but it has nothing to with the economics of the country Austria. These Austrian economists say that an even worse crisis is on the horizon.
I do have some hope though. The American people are waking up. Just a few years ago, no one with the exception of Ron Paul was really questioning the Federal Reserve in Congress. They all just let it do whatever it wanted and didn’t really pay attention to it. I’ve been in the anti-Federal Reserve movement since 2007 and I’ve seen it rapidly grow. It’s become mainstream to not just criticize the Federal Reserve but to want to end the Fed.
I’ll start with some basics. What is money? Sounds like a dumb question. But we all use money and think about it quite a bit. But we really take the time to ask some vital questions. How does this piece of paper have any value? Who controls the value of the dollar? We all should know that the value of the dollar loses value from time to time. Why is that?
Money is a medium of exchange. Long ago we had a barter economy where people would exchange goods for other goods. Someone with a sword would trade it for some bread. As you can imagine, this was very inconvenient finding someone to trade with. Overtime societies started using commodity money. Commodity money is a money whose value comes from the commodity out of which it is made. Money did not originate with government. For example, some societies used shells and beads as money. These are thought to have value. Historically, the free market has chosen gold as money. If you own gold, you can offer it to someone in exchange for a good that they have.
Today most of the money used in the world is fiat currency. The dollar is fiat money. It only has value because the government says so meaning that it is not backed by anything. Government saw people using money and wanted to get in on the action. They began printing their own money and forcing people by law to use it.
The history of paper money is long but in almost every single case, starting with China in 806 AD, paper fiat currency has failed. Government printed so much money which inflated the money supply and made the money worthless. Today, it is illegal to use anything but the paper dollar as currency. People are in jail right now for trying to start their own currency backed by precious metals.
So now that we have an understanding of money, who controls the value of the money we have in our pockets? The Federal Reserve. The same supply and demand rules apply to money. The more dollars we have in the circulation, the less value the money becomes. It’s scary that the Fed has monopoly control over our money supply.
Since the very beginning, the Federal Reserve has been the most secret and least accountable operation of the federal government. The CIA has more oversight than the Fed. The plan for the Fed started in 1910. A group of the most powerful banks and government officials held a secret meeting in Jekyll Island resort in Georgia and devised the Federal Reserve Act to serve their own self interests. They finally got the Federal Reserve Act passed on the evening of December 22, 1913 when many congressional members were home on Christmas break. That’s how America’s central bank the most powerful institution and the greatest intervention in the economy was created. These unelected bureaucrats can create as much money as they want out of thin air.
Our Founding Fathers understood the dangers of fiat currency. In 1775, the continental congress issued paper money called the continental. The currency was hyperinflated to the point of disaster. This is why the Founders banned paper money and permitted only gold and silver as money in the constitution.
Supporters of the Fed claim that the central bank is necessary to stabilize the financial system. But since the Fed came into existence in 1914, we have experienced numerous recessions and depressions. Members of the Austrian school of economics blame the Fed for these financial crises including the Great Depression.
The Fed has created a boom and bust cycle. It lowers interest rates to put more dollars into the economy which creates a false boom. This sends out misleading signals to consumers and producers. It is impossible for the Fed to continue the boom so an economic crash will ultimately happen. This is called the Austrian business cycle.
Leading economists in the Austrian school warned us about the current economic crash years ago but few people cared to listen. The Fed is the biggest taxer of them all. The Fed steals our money through inflation which is a hidden and immoral tax. Inflation is the increase of money supply in the economy. Since the creation of the Fed, the dollar has lost 97 percent of its value.The Federal Reserve printing money punishes those who safe money for the future. Instead of obvious ways to raise government revenue such as taxation or borrowing, the Fed simply prints as much money as it needs.
The Federal Reserve likes fiat paper currency because it enables them to bail out their friends. The Fed has never been audited. A true audit would reveal what the Fed has been doing behind closed doors. A few weeks ago the Fed was court ordered to release documents which showed that they have loaned to many foreign banks including a corporation part owned by the bank of Libya.
Thankfully, Ron Paul and Rand Paul have introduced the Federal Reserve Transparency Act of 2011. The bill number in the House is H.R. 459 and in the Senate it is S. 202. As Ron Paul says, the audit is just the first step to ending the Fed. The threat of an audit has Fed Chairman Ben Bernanke running scared. There is even greater momentum for an audit this year so it’s very possible that it could pass. It would be amusing to watch Obama come up with excuses to why he doesn’t support the Federal Reserve if the bill ends up on his desk. There’s no good reason why anyone shouldn’t support increasing transparency to the Fed.
There’s another monetary policy issue that needs our attention: The International Monetary Fund. It hasn’t gotten as much attention as it deserves lately and I think it’s because it’s a complicated issue. The IMF is an unconstitutional, outdated and needlessly international bureaucracy. The U.S. should withdraw from the IMF.
The IMF started in 1944 when a group of 44 nations met in Bretton Woods, New Hampshire. These governments developed the Bretton Woods agreement. This was a system of exchange rate management. The IMF would temporary loan to countries who were experiencing balance of payment problems. The Bretton Woods system fell apart in 1971 when the U.S. completely ended the Gold Standard.
The end of the Gold Standard meant dollar devaluation, instability and inflation. After Nixon ended the Gold Standard, this gave the IMF absolutely no justification to continue. Instead of closing down, it simply changed its mission. Today, the main mission of the IMF is to bailout powerful politically connected banks and spendthrift nations at the expense of taxpayers. The IMF is the last lender of resort, loaning to shaky governments that no rational bank would consider.
U.S. taxpayers have the largest stake in the IMF. Out of 187 member countries, the U.S. has the highest quota of about 17 percent. This means that we pay roughly 17 percent of the IMF total funding. Don’t be fooled by government officials who say that the IMF doesn’t cost us anything. Taxpayers subsidize the IMF to the tune of billions of dollars annually yet these subsidies are nowhere to be found in our federal budget.
The IMF is a prime example of our bailout culture. The IMF recently sent nearly $300 billion taxpayer dollars to Greece and Ireland. A bailout of Portugal is now in the works. Barack Obama remains committed to a second bailout of Greece. All of these welfare states lived far beyond their means and we were forced to pay for their mistakes.
The IMF has created moral hazard. This means that they have encouraged reckless behavior by holding out the prospect of a bailout to any nation or large politically connected bank that fails. The IMF bailouts have made financial crises much worse.
The IMF is a clear threat to our sovereignty. The former head of the IMF French socialist party member Dominique Strauss Kahn was recently in the news for allegedly raping a hotel maid in New York City. These are the kinds of people who are running the IMF. The IMF recently proposed a global currency in honor of the father of Keynesian economics John Maynard Keynes. Keynes proposed a global currency called the bancor decades ago. A global fiat currency would grant the IMF even more power while failing to stabilize the global financial system.
Who would administer the banchor? The IMF report suggests a global bank or the Federal Reserve on a global scale. Since the creation of the IMF, it has operated under a veil of secrecy. Since all major decisions require an 85 percent super majority to pass, U.S. treasury secretary Timothy Geithner has the power to veto any IMF bailout. We must put pressure on Timothy Geithner while simultaneous striving to withdraw from the IMF.
I think the most important part of these campaigns is education. I know it may be difficult to strike up a casual conversation on monetary policy but we have to. You’re probably going to be called names like a “kook” but we have to keep fighting the good fight. History will prove us right. These are complicated issues but we owe it to ourselves to educate ourselves. The Fed and the IMF doesn’t want you to understand these issues. I believe that freedom is at stake and I hope that you will join me in speaking out against our dangerous monetary policy. If you want to learn more, I suggest the following books End the Fed by Ron Paul, What Has Government Done to Our Money by Murray Rothbard and the Case Against the Fed by Murray Rothbard. Thank you.