Why Ron Paul’s ‘Audit the Fed’ Bill is critical

Its activities are shrouded in secrecy and unknown except to a select few.

Thinking of the CIA or FBI? Nope. It’s actually the Federal Reserve, also known as the Fed. Apparently, Americans are not allowed to see how their currency is regulated.

Although a bill for a full audit, which sheds light on who the Fed loans money to and its monetary policy, was passed on Sept. 17, there are still those who oppose it.

The Fed has stated that it is “subject to several levels of audit and review.” What many Americans miss is that the yearly audits are limited to insignificant activities.

The Fed sets the baseline interest rate for loans such as student and car loans.

A debt is generated two times when a student takes a loan: once, when the Fed loans the money to the government with interest, and a second time, when the money is loaned out once again to the borrower.

There is interest due on every dollar in existence, ensuring there is always more debt than currency.

Most worrisome of all, from 2007 to 2010, the Fed gave out nearly $16 trillion to various corporations and banks, both foreign and domestic. This was completely unknown to Congress until 2011 when an audit was requested by Sen. Bernie Sanders.

The $16 trillion in bailouts were only a glimpse into its activities. Without a full audit, the Fed has no incentive to be accountable to the American people.

As it stands now, various private banks hold shares in the Fed.

Certain banks, whose owners are rich to begin with, are entitled to a risk-free 6 percent share in the Fed’s profits each year.

Federal Reserve chairwoman Janet Yellen objected to the bill, saying it would violate the Fed’s “independence.” She favors transparency through press conferences, but she and her colleagues can simply refuse to answer important questions about the Fed, making press conferences useless.

Opponents of having a full audit on the Fed argue that politicians would manipulate the Fed to their benefit, thus bringing banking into politics. This idea is backwards.

If anything, revealing the Fed’s secrets would bring the nation’s monetary policy to light and pull banking away from the political system since citizens will know if their representatives are manipulating the monetary system.

So why does the Fed, whose shares are owned by private stockholders, have a power that the Constitution duly grants to Congress?

Proponents of an “independent” Fed claim that the Fed’s Board members are nominated by the president and approved by the Senate. But it is uncertain whether these members care about Wall Street or the American people, since the Fed keeps the general population in the dark about its decisions.

The Fed can control the economy, and the economy dictates our way of life. It is only rational that we, the people, should be able to examine it closely and critically.