Why We Must Audit the Fed

Anders Mikkelsen

Today Americans all across the country are experiencing severe economic difficulties.
The Federal Reserve Bank is supposed to keep our financial system stable, yet it failed to
protect Americans and the banks. It is the premiere institution regulating the economy
and the banks, and the Obama administration has proposed to give them more power after
they predicted the economy was fine. Throughout this time of financial crises the Federal
Reserve admits it has been responsible for the movement of trillions of dollars to U.S.
banks and foreign central banks. Since the Fed has not given exact details to Congress
and the public, Americans have no way of knowing how all this money is being spent and
how it is helping the economy. Why should Congress blindly trust an institution that
failed to prevent the housing and credit bubble?

Congressman Ron Paul along with 281 bipartisan members of the House of
Representative are supporting the Federal Reserve Transparency Act (H.R. 1207) to audit
the Federal Reserve and discover exactly what is going on. However New York City’s
Representatives are not cosponsoring H.R. 1207, nor are the state’s Senators supporting
the Senate version, S. 604.

Many people are attempting to make the argument that the Federal Reserve’s
independence will be undermined by passing H.R. 1207. Certainly when the Fed was
created in 1913 people thought that without Fed independence populist leaders would
institute inflationary policies. Back then gold was $20 an ounce. Since then the dollar has
lost 95% or more of its value. However the bill to audit the Fed does not change Fed
policy, it only mandates an audit of the Fed to disclose its past actions to Congress.

The constitution clearly states in Article I, Section 8, Clause 5, “The Congress shall have
Power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the
Standard of Weights and Measures.”

H.R. 1207 amends section 714 of Title 31 of the U.S. Code and removes the restrictions
preventing Congress and its investigative arm - the Government Accountability Office -
from conducting an Audit the Federal Reserve. This legislation will allow Congress to
learn about the Fed’s actions, including agreements with foreign central banks and
governments, discount window operations, funding facilities, and open market
operations.

Public companies are expected to pass audits and explain their finances, as are (rightly or
wrongly) individuals paying taxes. The Fed is not an individual with the right to privacy,
but something created by Congress. The responsibility of ensuring that the Fed is meeting
Congressional mandates efficiently, effectively and lawfully is ultimately belongs to
Congress. The Government Accountability Office is best positioned to perform a
comprehensive audit requested by nearly two-thirds of the House. The Fed may feel it has
something to hide, however the American people have the right to know what the Fed has
done with the creation of nearly $12 trillion in credit. Undertaking such inflationary
policies are a clear breach of the Fed’s own reasons for the necessity of independence.
John Adams wrote to Thomas Jefferson -

"All the perplexities, confusion and distresses in America arise not from defects in
the constitution or confederation, nor from want of honor or virtue, as much from
downright ignorance of the nature of coin, credit, and circulation."

You can contact your members of Congress at the Capitol Switchboard: (202) 224-3121
to find out their position and ask them to support HR 1207 / S 604 auditing the Fed. You
can sign petitions here: http://www.campaignforliberty.com/campaigns/hr1207home.php

For more information, visit and www.mises.org.