When it comes to the Federal Reserve, even the numbers Americans have seen so far can be mind-boggling. A one-time Government Accountability Office investigation last year revealed that the Federal Reserve churned through some $16 trillion of various long- and short-term transactions with U.S. and foreign entities between late 2007 and mid-2010, in an attempt to stop a financial meltdown. That was the most comprehensive examination of the Fed’s activities since the central bank was founded in 1913. Given the immense power the Fed holds over U.S. monetary policy and economy, there’s still too little Congressional oversight and few details into exactly how and why the money changes hands. And one can only imagine what else a more thorough approach would turn up.
That’s why we need to give the Government Accountability Office (GAO) the authority to conduct a robust and comprehensive “audit” of all the Federal Reserve’s dealings.
Though chartered as a non-government system rather than a direct agency controlled by Washington, we have every right to ask questions about how the Fed enables, or even contributes to, the growing size and scope of government. By monetizing our debt, the Federal Reserve has become a means by which Congress has been able to pursue its out-of-control spending, leading to the accumulation of giant deficits. Ostensibly this is part of the Fed’s ongoing efforts to bolster the economy, but like so many other policies, this can have negative consequences for our recovery and prevent an end to the prolonged financial misery that so many Americans must grapple with today. Equally troubling, the Federal Reserve has either failed to detect or made problems worse in the realm of finance. By repeatedly invoking “emergency authority” to expand lending and prop up the housing sector and “too big to fail” banks, the Fed can distort market signals, thereby creating drags on the economy.
In essence, the Federal Reserve is an unelected monopoly that maintains a shroud of secrecy around its inner-workings in the name of being able to exercise independent, behind the scenes moves to create stability. Yet, this can backfire, creating both market uncertainty and opportunities for crony capitalism. As an undemocratic institution, for almost 100 years, the Federal Reserve has functioned with wide latitude from elected officials, but it has become increasingly controversial. Its power over the nation’s purse strings can, if not properly checked and balanced, be wielded to dish out political favors through bailouts and loans … and drive us deeper into debt!
Whatever your views on central banking and monetary policy may be, politicians and the public need to know more about how this institution operates. It’s time to bring more transparency to the Federal Reserve.
Keep tabs on the activities of the Federal Reserve is a major step in understanding how we can remove roadblocks to long-term growth and prosperity. We don’t need more bailouts, we need lower taxes and free markets.
Thank you for your ongoing support and for taking action on this important issue.
Your Grassroots Action Team at NTU