Saturday, December 13, 2008
The Fed Stranglehold: UPDATE
Saturday, December 13, 2008 | 
Posted by
Chris Waner
One aspect of the Federal Reserve system that I elected not to mention in my previous post is the role of Congress in the process of issuing new money. The reason for the omission is that in recent history the roll of the Congress has been largely for-show, as with the 4 trillion dollars in new bailout money this year.Technically, the Congress grants the Fed "permission" to print more money, usually for the purpose of funding some legislative spending that the congress doesn't want to levy as a tax (they don't want you having to worry your pretty little head about the details, and taxes draw too much attention).
This week a remarkable and I would have thought almost unthinkable thing happened. The Fed went before Congress to talk about the possibility of the Fed issuing its own debt. What does "issuing its own debt mean?" Traditionally, the treasury or other authorized institution issues a bond which the Fed purchases with money it prints out of thin air. This money then enters the economy, starting with the treasury or investment bank and then trickling down to the rest of us. Because the Fed is buying a bond, not just printing money, they charge us interest--see this article for a more detailed examination of this.
What the Fed now wants to do is issues its own bonds and then buy them with money printed out of nothing. What's the difference you may ask? A bid difference. Although the Fed previously was not accountable to the people directly, they were accountable to (though not willing to be audited by) the Congress, who is accountable to us. If the Congress gives the Fed the ability to issue its own debt, it is then finally no longer accountable to anyone whatsoever. The Fed would have full power to issue as much money as it wants any time it wants with no restrictions and no genuine oversight or ability to adequately measure the amount of money being pumped into the economy.
This is a takeover, folks. I urge everyone who reads this to go to this site, which guides you through the very simple process of emailing your congressional representative. All you have to do is pick which state you live in, enter your name and address, and copy and paste the message below into the form (Note: to copy simply select the message below and go to Edit/Copy then to paste simply click in the message portion of the form and go to Edit/Paste, that's it):
I am writing to express my opposition to the Federal Reserve's issuance of dept. I implore you to adhere to the strict limitations placed on the Federal Reserve in the 1913 Federal Reserve Act, which requires Congressional oversight of all issuance of currency. Allowing the Federal Reserve to issue its own dept represents a serious threat to the proper checks and balances laid out in the US Constitution in Article 1, Section 8, which states:
"The Congress shall have Power to . . . coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures . . . ."
I urge you to look carefully at the Federal Reserve's proposal before Congress and uphold your sworn duty to protect the US Constitution. These are the kinds of grave issues I carefully weigh when entering a vote for Representative for my state.
Thank you for your full consideration.
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2 comments:
my rep has been contacted. Is there a bill on the floor to give the Fed this power? Or what would be the path to this happening. Is this seeming like a serious possibility?
by the way, you should change your blogger settings to allow all commenters
Hey Rick. Realistically, it would represent a change in law, so a bill is necessary; there is no bill on the floor yet, but I will be shocked if there isn't one within a few weeks. Pelosi and Reed are keeping the Congress in session through the inauguration to avoid Bush recess appointments. So it could slip through the cracks around Christmas or New Years, ironically the same way the Federal Reserve Act was passed in the first place in 1913.
RE: "by the way, you should change your blogger settings to allow all commenters"
Changed...thanks for the head's up
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