Due in large part to the efforts of Ron Paul, more Americans now understand that the Fed actually “spends” more than Congress by printing out trillions of dollars to bail out politically connected banks and corporations. For every additional dollar that the Fed prints, the value of the dollar in our pocket goes down. Prices at the grocery store are going up because the dollar can’t buy what it used to any longer.
This is what will almost inevitably happen when a central bank can print money to its heart’s content. The fiat dollar, meaning that it is backed by absolutely nothing, has lost over 95 percent of its value since the Fed was created in 1913. Everyone probably wishes that they could go back to the days when candy bars cost less than a nickel in the pre-1913 era.
The Fed impacts everyone’s money and daily life, arguably more than Congress. It’s bad enough that most members of Congress voted for the infamous $700 billion TARP bank bailout. The upside is that the American people can vote them out of the office at the ballot box. Utah voters notably held Senator Bob Bennett accountable for his pro-TARP vote and rightfully replaced him with a true constitutionalist named Mike Lee.
But the American people cannot directly fire Fed Chairman Ben Bernanke for $16 trillion in reckless bailouts. Nor they can elect a better head of the Fed. The central bank is run by unelected and unaccountable bureaucrats that have the power to dramatically impact the economy at the drop of a hat.
This kind of unchecked power is antithetical to the limited government principles upon which America was founded. The Fed has continually resisted any kind of congressional oversight, claiming that it would endanger its so-called independence. But the lack of accountability at the Fed cannot be justified with such a poor track record.
An audit of the Fed won’t solve all economic problems. But it is an important first step to expose the severe wrongdoings of the central bank. Once the public reacts to the audit findings and turns against the Fed, the second step in the plan can commence.
An audit is just the first step to ending the crony capitalism that defines the Federal Reserve.
Julie Borowski is a Policy Analyst at FreedomWorks, an organization dedicated to lower taxes, less government, and more freedom. Her writings on economic policy have appeared in numerous newspapers and online outlets. She is on the Board of Advisors for the Coalition to Reduce Spending and she launched an independent YouTube channel called TokenLibertarianGirl in June 2011.
She was previously selected to be a Charles G. Koch Summer Fellow with the Institute for Humane Studies where she worked at the Center for Competitive Politics. Most recently, she was a government affairs associate at Americans for Tax Reform.
Julie has volunteered for political candidates in Kentucky and in her home state of Maryland. She graduated Magna Cum Laude from Frostburg State University in May 2010 where she studied political science, economics and international studies. She is now located in Washington, D.C.