Dear Joseph,
Thank you for taking the time to write me regarding the Federal Reserve.
The Federal Reserve is the central banking system of the United States. It is responsible for conducting the country's monetary policy by influencing credit conditions. It also protects the stability of our financial system by regulating banks and financial institutions. Its primary mandate should be to maintain the stable value of the U.S. dollar.
Congress made a mistake when it gave the Federal Reserve the dual mandate of fostering full employment and controlling inflation/deflation. Robust economic activity provides full employment and is influenced more by spending, tax, and regulatory policies than by monetary policy. Job creation is primarily a function of the private sector and the less the government interferes, the better. The Federal Reserve's attempts to manipulate the free market to achieve full employment has instead devalued the dollar and created moral hazard. I will support efforts to limit the Federal Reserve's mandate to maintaining a stable currency.
Because of its status as an independent agency, much of the Federal Reserve's actions are secret and not subject to scrutiny. It is important the agency maintains its independence so that its actions are not influenced by political considerations. However, regular audits of the Federal Reserve's operations and balance sheet should be conducted to ensure accountability for prior actions. It is not healthy for any organization to be free from accountability. Determining an optimum time interval between action and audit for the Federal Reserve will be key in striking the delicate balance between independence and accountability. I will support efforts to find that balance.
Thank you again for taking the time to share your thoughts. It is important for me to hear the views and concerns of the people I serve. Since taking office, I have received over 500,000 pieces of correspondence and have had over 200,000 participants in live forums and telephone town hall meetings. Please feel free to contact me in the future if I can further assist you or your family. It is an honor representing you and the good people of Wisconsin in the U.S. Senate.
Sincerely,
Ron Johnson
United States Senator
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