Knightskye
11-10-2009, 03:32 AM
http://online.wsj.com/article/SB10001424052748704402404574525570583604860.html?m od=googlenews_wsj
Under the banner of increasing Federal Reserve transparency, Congressman Ron Paul has sponsored a bill that would subject the Fed's monetary policies to an audit by the Government Accountability Office (GAO). The bill is a veiled attempt to undermine the Fed's independence. If it passes, it will cripple policy making—particularly when it comes to inflation.
It is completely appropriate to hold the Fed accountable for its decisions. But the Paul bill, H.R. 1207, will only produce redundancies: Congress already has multiple ways of finding out what the Fed is doing and why.
Well, if we can already find out what they're doing, why isn't that "undermining the Fed's independence?
What's more, it is highly doubtful that the GAO has the technical competence to evaluate monetary policy. If it did try to conduct these audits, at best it would merely rehash known information. At worst, the GAO would generate confusion by offering its own analysis.
If monetary policy shouldn't be evaluated by one person, why do we have a Federal Reserve System? :D
When central banks are subjected to political pressure, authorities often pursue excessively expansionary monetary policy in order to lower unemployment in the short run. This produces higher inflation and higher interest rates without lowering unemployment in the long term. This has happened over and over again in the past, not only in the United States but in many other countries throughout the world.
True, but then why aren't you arguing for the abolition of the Federal Reserve?
Weakening the Fed's independence now might raise the risk of inflation, which would cause borrowing costs to rise and would lower prospects for a strong economic recovery.
You know what might raise the risk of inflation? Pumping trillions of dollars into the money supply in a short period of time.
Fortunately, Congress is considering an amendment to the bill that would prevent the negative consequences of the original Paul legislation. This amendment, put forward by Rep. Mel Watt (D., N.C.) would change the focus of the bill by instructing the GAO to audit the new lending facilities at the Federal Reserve that were authorized under the 13(3) "unusual and exigent circumstances" clause of the Federal Reserve Act.
Gosh, I didn't know transparency and sound money were negative consequences.
We strongly support an amendment of this type because it will increase the Fed's accountability without compromising its monetary independence.
"Monetary independence" means "monetary monopoly," I guess.
Under the banner of increasing Federal Reserve transparency, Congressman Ron Paul has sponsored a bill that would subject the Fed's monetary policies to an audit by the Government Accountability Office (GAO). The bill is a veiled attempt to undermine the Fed's independence. If it passes, it will cripple policy making—particularly when it comes to inflation.
It is completely appropriate to hold the Fed accountable for its decisions. But the Paul bill, H.R. 1207, will only produce redundancies: Congress already has multiple ways of finding out what the Fed is doing and why.
Well, if we can already find out what they're doing, why isn't that "undermining the Fed's independence?
What's more, it is highly doubtful that the GAO has the technical competence to evaluate monetary policy. If it did try to conduct these audits, at best it would merely rehash known information. At worst, the GAO would generate confusion by offering its own analysis.
If monetary policy shouldn't be evaluated by one person, why do we have a Federal Reserve System? :D
When central banks are subjected to political pressure, authorities often pursue excessively expansionary monetary policy in order to lower unemployment in the short run. This produces higher inflation and higher interest rates without lowering unemployment in the long term. This has happened over and over again in the past, not only in the United States but in many other countries throughout the world.
True, but then why aren't you arguing for the abolition of the Federal Reserve?
Weakening the Fed's independence now might raise the risk of inflation, which would cause borrowing costs to rise and would lower prospects for a strong economic recovery.
You know what might raise the risk of inflation? Pumping trillions of dollars into the money supply in a short period of time.
Fortunately, Congress is considering an amendment to the bill that would prevent the negative consequences of the original Paul legislation. This amendment, put forward by Rep. Mel Watt (D., N.C.) would change the focus of the bill by instructing the GAO to audit the new lending facilities at the Federal Reserve that were authorized under the 13(3) "unusual and exigent circumstances" clause of the Federal Reserve Act.
Gosh, I didn't know transparency and sound money were negative consequences.
We strongly support an amendment of this type because it will increase the Fed's accountability without compromising its monetary independence.
"Monetary independence" means "monetary monopoly," I guess.