Faith in the Federal Reserve continues to falter throughout the country as the central bank’s endless quantitative easing and near-zero interest rates have failed to result in economic recovery while increasing the danger of a hyperinflation nightmare. Lawmakers throughout the Nation are looking at ways to rein in the central bank’s power while also hedging against the consequences of possible Fed policy failures.
Two Republican Senators, Bob Corker of Tennessee and David Vitter of Louisiana, announced Monday that they would introduce legislation requiring the Fed to scrap the employment portion of its dual mandate and put all of the central banking power into avoiding inflation.
“I’ve long argued that the Fed should just focus on inflation,” Vitter said in a news release. “With endless stimulus-type initiatives coming out of the Fed and the money printing press never ending — all under the banner of helping boost employment — the Federal Reserve should get back to its original goal. This policy strives to do just that.”
The idea of returning Fed policy focus to a single mandate has been championed by fiscal conservatives since Congress issued the dual mandate requiring the central bank to aim for high employment and low inflation in all of its action. Lawmakers like Corker and Vitter argue that the dual mandate has done little more than give Congress a free pass to ignore budgets and encourage reckless borrowing. They evidence the claims by pointing to the nearly $3 trillion worth of Federal debt the Fed has purchased since Congress issued the dual mandate.
“Providing the Fed with a clear and explicit focus on keeping inflation low will serve America better than the broad, bipolar mandate it has today,” Corker said. “The dual mandate blurs the line between fiscal and monetary policy and allows Congress to shirk its responsibility to enact sound budgets and policies that produce economic growth.”
Meanwhile, lawmakers in 13 States throughout the Nation — including Minnesota, Tennessee, Iowa, South Carolina and Georgia — have made moves to consider setting up their own gold-backed currencies. In 2009, just after Ron Paul published his book End The Fed, making the central bank a mainstream political topic, only three States had begun taking similar steps. So far, Utah is only the State to approve a law recognizing nontraditional currency.
The latest State to move closer to coining its own currency is Virginia, where GOP lawmakers are taking an approach similar to that of other States that are looking to hedge against possible Fed failures. Virginia State lawmaker Robert Marshal introduced legislation proposing a serious study on the topic; the bill passed in Virginia’s House of Delegates with a 2-1 majority this week. Three years ago, the same legislation was shrugged off by fellow lawmakers when Marshal introduced it.
On Monday, Senator Rand Paul (R-Ky.) did his part to hold the Fed accountable by following in his father’s footsteps and re-introducing a bill to audit the Fed in the Senate.
“I introduced Audit the Fed (S. 209) in the U.S. Senate to put an end to the Fed’s ‘print-now, ask-questions-later’ policies that are bankrupting every man, woman, and child in the United States.” Paul said in an email to supporters.
He continued, “Of course, Ben Bernanke’s puppets in Congress are doing everything they can to stop folks like you from blowing the lid off the Federal Reserve.”