Statement on Federal Reserve Board Abolition Act PDF Print E-mail

Statement of Congressman Ron Paul

United States House of Representatives

 
Statement on Federal Reserve Board Abolition Act
 
February 3, 2009
 

Madame Speaker, I rise to introduce legislation to restore financial stability to America's economy byabolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-classAmericans have been victimized by a boom-and-bust monetary policy. In addition, most Americanshave suffered a steadily eroding purchasing power because of the Federal Reserve's inflationarypolicies. This represents a real, if hidden, tax imposed on the American people.

From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused bythe housing bubble, every economic downturn suffered by this country over the past century can betraced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economywith easy money, leading to a misallocation of resources and an artificial "boom" followed by arecession or depression when the Fed-created bubble bursts.

With a stable currency, American exporters will no longer be held hostage to an erratic monetarypolicy. Stabilizing the currency will also give Americans new incentives to save as they will no longerhave to fear inflation eroding their savings. Those members concerned about increasing America'sexports or the low rate of savings should be enthusiastic supporters of this legislation.

Though the Federal Reserve policy harms the average American, it benefits those in a position to takeadvantage of the cycles in monetary policy. The main beneficiaries are those who receive access toartificially inflated money and/or credit before the inflationary effects of the policy impact the entireeconomy. Federal Reserve policies also benefit big spending politicians who use the inflated currencycreated by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.

Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority overmonetary policy. The United States Constitution grants to Congress the authority to coin money andregulate the value of the currency. The Constitution does not give Congress the authority to delegatecontrol over monetary policy to a central bank. Furthermore, the Constitution certainly does notempower the federal government to erode the American standard of living via an inflationary monetarypolicy.

In fact, Congress' constitutional mandate regarding monetary policy should only permit currencybacked by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishingthe Federal Reserve and returning to a constitutional system will enable America to return to the type ofmonetary system envisioned by our nation's founders: one where the value of money is consistentbecause it is tied to a commodity such as gold. Such a monetary system is the basis of a true freemarketeconomy.

In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an endto the manipulation of the money supply which erodes Americans' standard of living, enlarges biggovernment, and enriches well-connected elites, by cosponsoring my legislation to abolish the FederalReserve.