Federal Reserve Board Abolition Act of 2007
Given the events of recent weeks and months with the mortgage meltdown, it is even more apparent that something must be done so this kind of crisis never happens again. One positive step towards rebuilding our economy would be to get rid of the primary cause of our problems.
The Federal Reserve Board Abolition Act (H.R. 2755) was introduced by Rep. Ron Paul (R-Texas) on June 15, 2007. If passed, the Federal Reserve Board Abolition Act would abolish the Board of Governors of the Federal Reserve System at the end of a one year period from the date that the bill was enacted. Assets and liabilities of the Board would be liquidated or assumed by the Secretary of the Treasury.
Rep. Paul originally proposed the act as a means of introducing “legislation to restore financial stability to America’s economy by abolishing the Federal Reserve”. He argued,
Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.
From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts.
On September 10, 2002, Rep. Paul addressed the U.S. House of Representatives saying,
“Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.”
“In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.”
Congress is now attempting to push through a bailout bill that will only make the problem worse. Congressman Paul said, “This has nothing to do with free market capitalism, this has to do with a managed economy, an inflationary system, corporatism, a special interest system, and this has nothing to do with the failure of our free markets and capitalism.”
Paul blamed the current crisis on a Federal Reserve power monopoly over the money and credit system, the ceaseless borrowing and printing of money, and dismissed the bill as nothing but more of the same.