The backlash against a Fed, drunk with power, could provide the final push.
by Ron Paul
Iwas pleased last week when we won a vote in the Financial ServicesCommittee to include language from the Audit the Fed bill HR1207 in theupcoming financial regulatory reform bill. As itstands now, if HR 3996 passes, because of this action, the FederalReserve’s entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.
Finally, the blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed. Allitems on the Fed’s balance sheet will be auditable, including allcredit facilities, all securities purchase programs, and all agreementswith foreign central banks. To calm fears thatwe might be trying to substitute congressional action for Fed mischiefin tinkering with monetary policy, we agreed to a 180 day lag timebefore details of the Fed’s market actions are released and includedlanguage to state explicitly that nothing in the amendment should beconstrued as interference in or dictation of monetary policy byCongress or the GAO. This left no reasonable objections standing and the amendment passed with a vote of 43 to 26.This was a major triumph for transparency and accountability in government. Withunprecedented turmoil in the financial markets, the people aredemanding to know and understand the extent of the Federal Reserve’sinvolvement in the creation of out-of-control business cycles, who theyare helping, and how. We need information. Theexcuses for not giving out this information are flimsy at best, and thepassage of this amendment is a major step to finally getting at thetruth.