A Republican lawmaker has introduced legislation to abolish the Federal Reserve as a way to “restore financial stability” to the country and re-establish the once-used gold standard.
“Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy,” said Rep. Ron Paul, R-Texas, in a speech to colleagues on the House floor.
“In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people,” he said last week while introducing the bill.
The Texas Republican went on to blame each economic downturn from the Great Depression of the 1930s to 2001’s “dot-com bubble” on Fed policies.
“The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial ‘boom’ followed by a recession or depression when the Fed-created bubble bursts,” said Paul.
On the gold standard, however, which the congressman described as “stable currency,” U.S. “exporters will no longer be held hostage to an erratic monetary policy.
“Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings,” he added.
“Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation,” he said.
Paul’s office did not return phone calls before press time.
The libertarian lawmaker also introduced into the congressional record a column by Llewellyn Rockwell, a former WND columnist and current president of the Ludwig von Mises Institute, a libertarian economic policy think tank based in Auburn, Ala.
Entitled, “Why Gold?” Rockwell writes, “The Fed has been inflating the dollar as never before, driving interest rates down to absurdly low levels, even as the federal government has been pushing a mercantile trade policy, and New York City, the hub of the world economy, continues to be threatened by terrorism. …”
“The government is failing to prevent more successful attacks by not backing down from foreign-policy disasters and by not allowing planes to arm themselves. These are all conditions that make gold particularly attractive,” he said.
But, he continued, “there is no stash of gold held by the Fed or the Treasury that backs our currency system. The government owns gold, but not as a monetary asset. It owns it the same way it owns national parks and fighter planes. It’s just another asset the government keeps to itself.”
Rockwell said the dollar, which has not been based on gold for nearly three decades, is virtually worthless or, at most, whatever the Fed says it’s worth.
“The dollar, and all our money, is nothing more and nothing less than what it looks like: a cut piece of linen paper with fancy printing on it,” he wrote.
Paul said he believed the system was inherently unfair to ordinary Americans.
“Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy,” he said. “The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy.”
He also said most politicians used the Fed’s “inflated currency” to hide the “true costs of the welfare state.”
“It is time for Congress to put the interests of the American people ahead of the special interests and their own appetite for big government,” said Paul. “Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy.”
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