Has the Federal Reserve Overstepped its Mandate? >
Blame Bernanke and Federal Reserve for Economic Crisis
Secrecy, bailouts, and inflation have left working Americans holding the (empty) bag
October 21, 2011
About Ron Paul:
Ron Paul is a former Republican congressman and presidential candidate, and is now the Chairman of Campaign for Liberty.
To say that the Federal Reserve has simply overstepped anything is a grand understatement: The Fed is the chief culprit behind our economic crisis.
Since 1913, the dollar has lost over 95 percent of its purchasing power, aided and abetted by the Federal Reserve's loose monetary policy. In its unchecked power to print money out of thin air, the Federal Reserve continues to devalue the dollar while the middle class continue to see their savings eaten away by inflation. Who benefits from this inflation? Big-spending politicians and politically favored bankers. Who is hurt? Hard-working Americans, who, when they take a financial risk and lose, are never bailed out.
[See a collection of political cartoons on the economy.]
It was the Federal Reserve that caused the housing bubble by lowering the interest rate to an artificial low, far beyond what the market could bear, which encouraged people to buy homes who could not afford them. With the mortgage crisis, the Fed hurt a lot of Americans by not allowing the free market to work on its own. It is the Federal Reserve that cannot account for trillions in off-sheet balances, except the money we do know about that went to overseas banks. The Fed continues to do all of this with no oversight, no accountability, and no transparency.
The most important boundaries the Federal Reserve oversteps every day are the legal parameters of the U.S. Constitution. Many of the Founders feared a central bank because they predicted it would cause the kind of damage characteristic of the Federal Reserve today. I've written about ending the Fed, but until then we should at least be able to take a look at what it's doing. Given their routine behavior, few Americans should be surprised that Chairman Ben Bernanke and his friends are reluctant to allow this—which is why I keep demanding it.
- Read: a Debate Club feature about Occupy Wall Street and the Tea Party.
- Browse: a slide show of 5 bright spots in the U.S. economy.
- Read about: what more the Fed might do to spur recovery.
- Other Arguments
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#2909
Yes — Congress holds the Fed to vague mandate standards
GARETT JONES, Professor at George Mason University
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#39121
Yes — The Fed should go back to being steady and independent
SANDY KENNEDY, President of the Retail Industry Leaders Association
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#4704
Yes — Fed needs to end its excursions into fiscal policy
MARK CALABRIA, Director of financial regulation studies at the Cato Institute
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#51254
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#61255
No — Fed should be doing more to reduce joblessness
JOSH BIVENS, Author of 'Everybody Wins Except for Most of Us: What Economics Teaches About Globalization'
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#7954
No — Question monetary policy if you like, but Fed's actions have been consistent with its mandate
EDWIN TRUMAN, Former Director the Division of International Finance of the Board of Governors of the Federal Reserve
