FEDERAL RESERVE – REFORM OR ABOLISH

Congress Debates the Federal Reserve: Reform or Abolish?

http://thenewamerican.com/economy/economics/item/11320-congress-debates-the-federal-reserve-reform-or-abolish?

New American – Alex Newman – 5/9/2012

In a rare moment of bipartisan unity, lawmakers and economists on both sides of the aisle largely agreed on two points: The Federal Reserve System as it stands is hurting America and something must be done to stop it. Just what exactly needs to happen, however, was the subject of considerable debate during a Subcommittee on Domestic Monetary Policy hearing Tuesday chaired by sound-money advocate and GOP presidential contender Rep. Ron Paul (R-Texas).

 The subcommittee hearing, entitled “The Federal Reserve System: Mend It or End It?”, examined a range of different proposals to reform the nation’s monetary system — it was supposed to look at six different options emanating from both parties. One of the measures on the agenda was Congressman Paul’s own “Federal Reserve Board Abolition Act,” legislation to dismantle the central bank and restore sound money based on market principles.

Several experts who testified before the subcommittee agreed with Paul’s proposals. And while efforts to reform the central bank have persisted for a century, in the wake of the economic crisis — which saw the Fed shower trillions of dollars on domestic and foreign banks — popular outrage has forced the controversy back into the spotlight.

“The Fed simply does not know the ‘optimal’ supply of money or the ‘optimal’ intervention in the banking system; no one does,” explained Dr. Peter Klein from the University of Missouri during the hearing, noting that central banks do not fight inflation — they create it. “Add the standard problems of bureaucracy — waste, corruption, slack, and other forms of inefficiency well known to students of public administration — and it becomes increasingly difficult to justify control of the monetary system by a single bureaucracy.”

This is a long article with a variety of outlooks.

The Reader Comment is worth the read.

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