Audit the Fed, Bernanke confirmation can wait

John Tate President, Campaign for Liberty
Font Size:

When Ron Paul reintroduced his bill in February 2009 to audit the Federal Reserve, conventional wisdom predicted that the legislation would once again fail to gain any traction.

But conventional wisdom also failed to predict the economic crisis.

In less than a year since its introduction, H.R. 1207, which Campaign for Liberty refers to as simply the “Audit the Fed Bill,” has gained over 300 co-sponsors in the House of Representatives, and its companion bill, S. 604, has received the support of more than one-third of the Senate. A slightly modified version of H.R. 1207 even passed the House as an amendment to Barney Frank’s financial regulatory reform bill.

Additionally, a December Rasmussen Reports survey revealed that nearly 80 percent of Americans agree it’s time to thoroughly and completely audit the Federal Reserve System.

So what does this tell us? That Americans are fed up with the Fed, its secrecy, and the unchecked power it has wielded over our lives. And they are now, more than ever, demanding greater transparency from not only their elected officials but from government and quasi-government agencies.

This call for transparency must be answered before any cloture motion or other vote is taken to confirm Ben Bernanke for another term as Fed chairman.

With its drive for endlessly circulating money created out of thin air, which Bernanke has taken to historic heights during his term, and constant fueling of the boom-bust business cycle, the Federal Reserve has played a key role in destroying the value of our dollar, which has lost over 95 percent of its purchasing power since the Fed’s creation in 1913.

While the Fed has partnered with Congress, the president, and the Treasury Department to put taxpayers on the hook for almost $13 trillion in bailouts and loans, and may face further pressure to inflate the currency as politicians press to rack up more debt with a stimulus package, it has fought attempts to discover which institutions are receiving our hard-earned money.

In testimony before the Senate Budget Committee, Chairman Bernanke refused to disclose the names of institutions that have sought trillions in taxpayer dollars. Even the Fed’s inspector general admitted before a House committee that she does not know where the money went!

The Federal Reserve can freely mortgage your economic future and commit you to deals with foreign central banks and governments without having to provide any significant details to your representatives.

Until now, the Fed, one of Washington’s most secretive institutions, has never faced a movement as serious as the one that has been mounted over the last year. Audit the Fed would open up the Federal Reserve’s funding facilities, such as the Primary Dealer Credit Facility, Term Securities Lending Facility, and Term Asset-Backed Securities Lending Facility to Congressional oversight and an audit by the non-partisan Government Accountability Office.

Further, audits would include discount window operations, open market operations, and agreements with foreign central banks, such as ongoing dollar-swap operations with European central banks.

Opponents’ claims that a thorough audit would compromise the Fed’s independence or cause interest rates to rise amount to no more than a vigorous defense of the status quo, including both the power to create and spend vast sums of money however they see fit and the secrecy under which they exercise that power.
No wonder 16 Senators have already publicly announced they intend to vote against Bernanke’s reconfirmation and four Senators have placed a hold on the nomination until Senate Majority leader Harry Reid holds a roll-call vote on auditing the Fed.

If Chairman Bernanke wishes to be granted another four-year reign over our country’s economic destiny, he must be required to first answer the American people’s demands for transparency and accountability.

The more we learn about what went on, the more we see that the average citizen is right to mistrust the men who sold us the bailouts, including Chairman Bernanke, and right to demand a more thorough investigation and audit of this entire monetary operation.

Bernanke, or any other candidate, should not be confirmed as chairman until Audit the Fed is the law of the land.

John Tate is president of the Campaign for Liberty.