RAND PAUL: Here’s why we should audit the Fed
It is no secret that the Federal Reserve’s unchecked printing press causes recessions and increases income inequality. Allowing the Fed to inflate our money supply will artificially keep interests rates low, but at what cost? Their acts can no longer go unchecked, which is why I am proud to carry forth my father’s original ‘Audit the Fed’ legislation, which will receive a vote in the Senate in early January.
In 2009, Senator Cruz drafted a legal brief praising President Obama’s American Recovery and Reinvestment Act, a stimulus bill that increased deficit spending by over $800 billion. In the brief, Senator Cruz argued that the bill’s handouts will “directly impact the economy” and “further the greater purpose of economic recovery for America,”
Earlier this month, Cruz then blamed the Great Recession not on the Federal Reserve’s artificial lowering of interest rates, but on its failure to continue pushing them down in a timely manner. Cruz said that the Federal Reserve’s decision to “[shift] to a tighter monetary policy…set the stage for the financial crisis.”
On the campaign trail, Senator Cruz has further demonstrated his unwillingness to rein in artificial credit expansion by repeatedly calling for the Fed to follow “rules-based” monetary policy. This means that he still wants to control the money supply in order to meet the requirements of a mandate or equation.
I couldn’t disagree more strongly. No true fiscal conservative should ever support the artificial lowering of interest rates—not in 2008, not now, not ever. Doing so is the equivalent of signing a death warrant for our country’s low income earners.
Former Federal Reserve Governor Kevin Warsh refers to the Fed’s easy-money policies as the reverse Robin Hood effect. “If you have access to credit—if you’ve got a big balance sheet—the Fed has made you richer,” he said in an interview. “This is a way to make the well-to-do even more well-to-do.”