Talk Elections

should we

Of course. Making the Fed transparent and holding it as accountable as any other government department is logical. The American people deserve to know how the Fed is affecting the American economy. It needs examination and assessment.

Absolutely.

Politicizing and giving Congress more power over what is supposed to be (and needs to be) an independent central bank is one of the most awful reasonable-sounding policy proposals currently in fashion.

Of course not. It's pure idiocy.

Red herring

Hell no, this easily been one of the worst products of the backlash against the center/elite.

The FED has more power over Congress than Congress has over it.

How so? If auditing the FED is idiocy, then so is reporting campaign finance issues and releasing tax returns.
If we all despise the "elite" so much, why not kill the weed at its roots?

I don't mean to generalize global politics but huge component of the backlash against the centrist consensus over the past ten years has been negative for our social contract: anti-globalization, anti-multiculturalism and knee jerk reactions against apparatuses that are entirely necessary.

Absolutely not. This is one of the worst ideas about how to fix the government I've ever heard. If the Fed is doing something they aren't "supposed" to be doing, exposing it will only bring the problem to light and shatter confidence. Economics is all (well not all, but a whole lot of it) about confidence, whether it be in future growth or the value of our currency. Intentionally taking a risk like this, with little or no apparent upside value, is a terrible idea.

And if all of that doesn't scare you, the very thought of the Fed being run by Congress ought to.

I'm kind of on the fence on this one... but what if the Fed is actually doing something that will hurt the economy in the long run?  Say then, maybe, those wrongdoings were to be discovered later and confidence is shattered, then?  I get the whole 'ignorance is bliss' idea, but letting such a powerful arm of the government like the Fed go totally unchecked just sounds foolish to me.

The largest virtue of the Fed is that it is an "unchecked" (which isn't true), antidemocratic force (though ultimately no more so than the Supreme Court. It would fail de Tocqueville's definition) that's designed to be the "adult in the room".  Having a democratically-controlled monetary policy is the fastlane to economic devastation, a fact repeatedly borne out by history.


You do realize that the financial statements of the Federal Reserve are already audited by the GAO, right? Any sort of manipulation of the money supply would surely have to show up there due to the limited abilities that the Fed has to actually undertake monetary policy.

What the latest bills want are not financial audits but the actual proceedings and documentation of meetings where the Fed makes any of its decisions (a "management audit"). Paul's bill would let Congress analyze any decision the Fed makes at their whim. That sounds like politicization to me.

The Federal Reserve should absolutely be held accountable by the American public for anything that it may have done without the sanction of daylight during the financial crisis. If anything, an audit of the Federal Reserve would be good in that it would apply more political pressure to the Federal Reserve and push us in the direction of truly public banking.

Also, I find it the height of irony that the one bill of Paul's that ever passed the House not only would expand the power of the federal government and Congress, but also would provide the groundwork for the greatest inflation crisis in modern US history. It's almost poetic.

How would a simple audit of the Federal Reserve's finances cause the 'greatest inflation crisis in modern US history'? Beyond that, the United States economy is incredibly deflated. It wouldn't cause hyperinflation (I'm not convinced it would cause much inflation at all), but even if it caused some inflation, it would be a bet positive. Some degree of Inflation is good for a deflated economy.

Did you read my other post? The Fed is already being audited on a regular basis. What the bill that passed the House does is give Congress review of every single decision the Fed makes. They can see any document the Fed has, and call Fed officials to have to justify any decision they make. With Congress essentially perpetually breathing down their neck, you really think the Fed wouldn't try to just appease Congress eventually? That right there is the death knell of an independent central bank. Studies and logic both show that the less independent the central bank, the higher the average rate of inflation in a country; heck, it's happened before in the United States.

Secondly, if you think inflation is a good thing right now, why do you care if the Fed printed off some money to loan to faltering institutions (which evidence shows they didn't--any money used was their own)? That would only either increase the base money supply or have no effect.

Dern skippy it should be audited. I'd like to see it abolished and congress assume its constuitional responsibility regarding the coining and issuance of currency.

Because Congress has shown its great at making painful short term decisions that lead to long term prosperity, right?

You make a valid point, but I would still rather the body in charge of our currency and monetary policy be beholden to the people; which private bankers are not. One could argue that the responsibilities of the Federal Reserve are too complex to subject to the bipolar nature of the American electorate, but I would counter with the naturally self-serving nature of the forces currently controlling the Fed. In short, we have a big problem with no fail-safe solution; meaning it won't be changed in our lifetime, barring a major catalyst that makes reform inevitable.