US128 - Audit the Fed
Section 2A of the Federal Reserve Act of 1913 defines the objectives of U.S. monetary policy:
The Federal Reserve is an independent for-profit corporation chartered by this act in 1913 and has never been audited. We've never done a full check that they are pursuing these statutory objectives (and only these statutory objectives) in their policy-making."The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."
The Federal Reserve should be transparent and its actions held to the same level of scrutiny as any other federal department. Many Americans have become interested in the Federal Reserve in recent years. America's representatives in Washington, D.C. need to also become a lot more interested in how this government institution affects the American economy. The role and the activities of the Federal Reserve are long overdue for examination, reassessment, and ultimately, thoughtful reform. Can the Federal Reserve pursue both stable prices and full employment, or does its currency manipulation cause malinvestment, inflation, and prolonged unemployment? Conduct an audit to provide true transparency of the Federal Reserve's lending practices. Establish clear Congressional oversight.
Americans have demanded to know what goes on in our central bank– in fact, 74% of the public is in favor of auditing the Fed. The government works for the people. Auditing the Federal Reserve will provide us with the necessary information required for taking corrective actions, if need be.
Economic policy-making is supposed to be based on complex models that make statistical inferences about future possibilities, which is to say that even at its best there is tons of built-in uncertainty and ample opportunity to manipulate results. The Federal Reserve -- a private corporation led by political appointees -- has obvious conflicts of interest, and questionable policy decisions in the recent past -- e.g., inflating the credit bubble with very low interest rates throughout the Bush years -- certainly contributed to the financial crisis.
The public has to be able to investigate how monetary policy decisions are made. At the very least, it will help us learn about the system.
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