Audit the Fed

Audit the Fed

Suppose you and ten friends have been mowing lawns all summer to be able to buy a boat together. You’ve been sweating in the hot sun since June and have a few more weeks to go until you return to school in September.

Two of your friends have no idea how to handle money, four are experts, and the others have varying degrees of financial know-how. It is clear that some of the money has already disappeared and that you’re not all equally committed to this boat idea.

You want to ensure that, collectively, you have enough money to fund that boat. So you decide to enlist Bill, a college friend majoring in economics, to safeguard your money. Every time you and your friends are paid, you stash the money away with Bill. He seems to have your best interest (the boat) in mind and says that he will use your money to earn interest until you need it.

Bill is not very forthcoming about what, exactly, he is doing with your money. You heard through the grapevine that Bill is loaning money to your competitors. On top of that, when your hard work drove a crew of lazy older kids out of business, one of whom was Bill’s cousin, they reemerged with brand new equipment. You suspect that was done with your investment.

The statements that Bill gives you showing what your money is doing leave out a lot of detail. Bill only accounts for part of the money and tells you to trust him to make the right decisions because he’s an economics student.

You remind Bill that this is your money, you earned it, and you have a right to know what’s happening to it. You and your friends are concerned that you might never see that boat, which has been the focus all along.

Well, guess what, America, that is what’s happening to you right now, and you have a chance to do something about it.

Congressman Ron Paul and Senator Rand Paul are sponsoring HR 1207, the Federal Reserve Transparency Act, and S 604, the Federal Reserve Sunshine Act, respectively. In short, this is called “Audit the Fed.”

The Federal Reserve, even in the words of its former chairman, Alan Greenspan, is not a government agency. It is the central banking system of our country, created in 1913, and since then has frequently acted as the middleman between private and public interests. While Congress does have limited oversight power, the Fed acts largely on its own volition, not per our president, Congress, courts, or voters.

But that’s our money that it’s controlling. For that reason, a diverse coalition of supporters is backing the effort to make the Fed fully transparent for the first time in its history. From the Green Party to the Tea Party, from staunch conservatives to proud Democrats, people are coming together demanding that we know what on earth is happening to our hard-earned dollars. Some don’t even think that such a middleman with unchecked godlike powers should exist.

It’s probably recent bailouts of large corporations that have lit the fire under this movement more than anything else. The Fed has decided, in the words of one columnist, who lives and who dies. The corporations slated for survival are given behemoth boosts to ensure their existence. But another of the Fed’s decisions, to print money out of thin air, has also drawn fire from across the political spectrum.

While printing more money, at face value, may seem like a good idea, that has the net result of devaluing existing money, causing inflation. Historically, the prices of goods and services rise when nations simply print more money. Ultimately that complicates a weak economy rather than strengthening it. When we had a gold standard for our currency, it was difficult to just create money because our money was actually backed by and measured in terms of precious metals. Now our currency is basically a piece of paper.

Regardless of one’s feelings about the Federal Reserve, auditing that entity is just a good old common sense idea. It’s important to remember, no matter what your belief system, that the government has no money; that’s our money. The government can’t give anything it hasn’t taken first. How can we ever improve our economy and solve our financial problems unless we know where our money is going?

We spend about four out of every 12 months working solely to pay taxes. I’m not sure where about two months worth of those taxes go. If we are cognizant of where all of this money is going, then we have more decision-making power as voters to steer it in the directions we wish.

Millions of people disagree on what those directions should be, but auditing the Federal Reserve will provide all of us with a better starting point for our platforms. And I’m guessing, given the furor over bailouts and corporate welfare from all sides, that we’re not all going to have radically different reactions when an audit is completed. I bet that some beneficial dialogue and unity as Americans would result. It would level the playing field.

As a woman who has been in a relationship in which my earnings were largely controlled by someone using them for other interests, the Federal Reserve’s current practices don’t sit right with me. I believe that I know what to do with my money better than anyone else. I also have faith in my fellow Americans that they know what’s best for themselves as well.

At the end of the day, this is a nonpartisan issue that affects all Americans and is uniting Americans from all walks of life. Given the human rights abuses in other parts of the world and other questionable ethical practices, it would be prudent to know which foreign interests have their hands in our pot via the Fed. It would be good to know exactly whose ridiculous bonuses we are paying for the corporate world.

It’s just a great idea, and anyone who believes in accountability and transparency of government should consider supporting it.

Audit the Fed’s website is


My dog is worried about the economy because Alpo is up to 99 cents a can. That’s almost $7.00 in dog money. -Joe Weinstein

©2011 H. Hiatt/ All articles/posts on this blog are copyrighted original material that may not be reproduced in part or whole in any electronic or printed medium without prior permission from H. Hiatt/

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