{"id":318,"date":"2012-06-04T01:14:37","date_gmt":"2012-06-04T01:14:37","guid":{"rendered":"http:\/\/www.rationalargumentator.com\/index\/?p=318"},"modified":"2014-02-09T05:31:12","modified_gmt":"2014-02-09T05:31:12","slug":"the-fed-mend-it-or-end-it","status":"publish","type":"post","link":"https:\/\/www.rationalargumentator.com\/index\/blog\/2012\/06\/the-fed-mend-it-or-end-it\/","title":{"rendered":"The Fed: Mend It or End It? – Article by Ron Paul"},"content":{"rendered":"
\n
\"The<\/div>\n<\/div>\n
Ron Paul
\n<\/big><\/big><\/strong><\/span><\/div>\n
June 3, 2012<\/big><\/span><\/div>\n
Recommend this page<\/a>.<\/strong><\/div>\n
******************************<\/div>\n
<\/div>\n
\n

In early May 2012, I held a hearing to examine the various proposals that have been put forth both to mend and to end the Fed.\u00a0 The purpose was to spur a vigorous and long-lasting discussion about the Fed’s problems, hopefully leading to concrete actions to rein in the Fed.<\/p>\n

First, it is important to understand the Federal Reserve System.\u00a0 Some people claim it is a secret cabal of elite bankers, while others claim it is part of the federal government.\u00a0 In reality it is a bit of both.\u00a0 The Federal Reserve System is the collusion of big government and big business to profit at the expense of taxpayers.\u00a0 The Fed’s bailout of large banks during the financial crisis propped up poorly-run corporations that should have gone under, giving them a market-distorting advantage that no business in the United States should receive.\u00a0 The recent news about JP Morgan is a case in point.\u00a0 JP Morgan, a recipient of $25 billion in bailout money, recently announced it lost another $2 billion.\u00a0 If a corporation shows itself to be a bottomless money pit of “errors, sloppiness and bad judgment,” the Fed shouldn’t have expected $25 billion in free money to change that or teach anyone a lesson in fiscal discipline. \u00a0But it determined that this form of deliberate capital destruction was preferable to one business suffering bankruptcy.\u00a0 Clearly, some changes need to be made.<\/p>\n

Several reforms for the Fed were discussed at the hearing.\u00a0 One was a call for the full-employment mandate to be repealed, in order to allow the Fed to focus solely on stable prices.<\/p>\n

Another reform calls for changes to the composition of the Federal Open Market Committee.\u00a0 Still another proposal was for outright nationalization of the Fed or of its functions.\u00a0 But if what the Fed does now is bad and inflationary, allowing the Treasury to print and issue money at-will would be even worse, and could possibly lead to a Weimar-like hyperinflation.<\/p>\n

The problems and advantages of the gold standard were discussed at the hearing.\u00a0 The era of the classical gold standard was undoubtedly one of the greatest eras in human history.\u00a0 For a period of several decades in the late 19th century, the West made enormous advances.\u00a0 However, the gold standard was still run by government.\u00a0 The temptation to suspend gold redemption reared its head again with the outbreak of World War I.\u00a0 Once the tie to gold was severed and fiscal restraint thrown to the wind, undoing the damage would have required great fiscal austerity.\u00a0 Instead, the Western world proceeded to set up a gold-exchange standard which lasted not even a decade before easy money led to the Great Depression.<\/p>\n

While returning to the gold standard would certainly be far better than maintaining the current fiat paper system, as long as the government retains the power to go off gold we may end up repeating the same mistakes.<\/p>\n

The only viable solution is to get government out of the money business permanently.\u00a0 The way to bring this about is through currency competition: allow parallel currencies to circulate without receiving any special recognition or favor from the government.\u00a0 Fiat paper monetary standards throughout history have always collapsed due to their inflationary nature, and our current fiat paper standard will be no different.<\/p>\n

It is imperative that the American people be educated on the dangers of the Fed and the importance of restoring sound money.\u00a0 The laying of the groundwork must begin today, so that the American people will be prepared for the day when the mirage the Fed has created evaporates completely.\u00a0 The full hearing footage is available on my website, and I would encourage every American to take a look.<\/p>\n

Representative Ron Paul (R \u2013 TX), MD, is a Republican candidate for U. S. President. See his Congressional webpage<\/a> and his official campaign website<\/a>.\u00a0<\/strong><\/p>\n

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Ron Paul June 3, 2012 Recommend this page. ****************************** In early May 2012, I held a hearing to examine the various proposals that have been put forth both to mend and to end the Fed.\u00a0 The purpose was to spur a vigorous and long-lasting discussion about the Fed’s problems, hopefully leading to concrete actions to rein in the Fed. First, it is important to understand the Federal Reserve System.\u00a0 Some people claim it is a secret cabal of elite bankers,…<\/p>\n

Read More Read More<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,5],"tags":[641,237,214,695,655,701,689,693,20,339,37,699,234,688,84,697,687,692,694,691,236,696,59,686,698,17,65,690,700],"class_list":["post-318","post","type-post","status-publish","format-standard","hentry","category-economics","category-politics","tag-austrian-economics","tag-bailout","tag-bank","tag-bankers","tag-capital","tag-competing-currencies","tag-devaluation","tag-dollar","tag-economics-2","tag-fed","tag-federal-government","tag-federal-open-market-committee","tag-federal-reserve","tag-fiat-currency","tag-freedom","tag-full-employment","tag-gold","tag-gold-standard","tag-great-depression","tag-hearing","tag-inflation","tag-jp-morgan","tag-liberty","tag-money","tag-price-stability","tag-prices","tag-ron-paul","tag-sound-money","tag-treasury"],"_links":{"self":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/comments?post=318"}],"version-history":[{"count":3,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/318\/revisions"}],"predecessor-version":[{"id":2140,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/318\/revisions\/2140"}],"wp:attachment":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/media?parent=318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/categories?post=318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/tags?post=318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}