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Sanders to vote for Paul's 'Audit the Fed' bill

OrphanSlug said:
Follow if you will please.

If you go slightly further back than 1913, and you will find all the history surrounding the "Banks of the United States." There were two. The First Bank of the United States (roughly 1791 to 1811) was chartered by Alexander Hamilton, with the Second Bank of the United States (roughly 1816 to 1836) being chartered by James Madison. These were the de facto central banks of the time and in each case the model for the Fed as we know it was born. Core to both of those banks was the ability to "Establish a national bank and to create common currency" for the express purpose of "establish financial order, clarity and precedence."

Why am I bringing all this up?

Mainly because the only time the idea of a Fed being challenged in Federal Court was during the period of the Second Bank of the United States. 1819, the McCulloch v. Maryland decision did something that forever changed how Constitutional Powers are defined. Specifically it referenced the Necessary and Proper Clause (s.8 c.18) in saying that Congress has the power to pass laws not explicitly provided for in the list of express powers. The qualifier used in that decision born to us the whole idea of implied powers. The effect was that Congress did have the power to create a Bank. Once the Fed was created in 1913 (our third iteration of a Central Bank) no one challenged the authority of Congress to create that, nor did they challenge the ability of the Fed to create common currency and/or engage in monetary policy of that currency (in the form of actual notes or reserves.)

The Fed may not really be Constitutional in express terms, but in implied powers it will take a new challenge to undo what the McCulloch v. Maryland decision gave to Congress. Libertarians and Constitutionalists hate this ****, but it is what it is now based on the longevity of our Central Banks and the lack of successful challenge of them.

"Audit the Fed" was birthed by people who want to end the Fed, even if the lot of currency supporters still wants the Fed around in some regard. The language of the bill in question is just a continuation of Congress since 2008 giving more power to the GAO to "investigate" the Fed. The Fed is already audited in their holdings, they are also audited in most of their activities already. All but their monetary policy decisions and meetings on that subject. This "Audit the Bill" puts the GAO into those meetings and decisions, and by effect politicizes monetary policy handing that to Congress. Prior to these acts the GAO was kept in the dark, but since 2008 their powers have increased... right into the hands of Congress.

It is window dressing to call this effort keeping the Fed in check, or looking for "wrong-doing." This is about one thing and one thing only... moving to Congress the ability to influence, if not outright control, monetary policy. Constitutional or not is up for debate, disastrous for our currency is the likely conclusion of Congress controlling both the ability to spend and the ability to create more money to spend.
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OS, I'm curious why returning something to congress that was congresses originally might be considered a disaster? If it's because, look at congress, they don't do there job as it is. The answer is to either make them do their job, or eliminate them and give it to others. I want the decision making process of how and when, why right now or why not till later, all monetary policy to be an open to the public issue. Not made in secret by a dozen guys who could care less who I am and how their decisions affect me one way or the other.
 
OrphanSlug said:
Follow if you will please.

If you go slightly further back than 1913, and you will find all the history surrounding the "Banks of the United States." There were two. The First Bank of the United States (roughly 1791 to 1811) was chartered by Alexander Hamilton, with the Second Bank of the United States (roughly 1816 to 1836) being chartered by James Madison. These were the de facto central banks of the time and in each case the model for the Fed as we know it was born. Core to both of those banks was the ability to "Establish a national bank and to create common currency" for the express purpose of "establish financial order, clarity and precedence."

Why am I bringing all this up?

Mainly because the only time the idea of a Fed being challenged in Federal Court was during the period of the Second Bank of the United States. 1819, the McCulloch v. Maryland decision did something that forever changed how Constitutional Powers are defined. Specifically it referenced the Necessary and Proper Clause (s.8 c.18) in saying that Congress has the power to pass laws not explicitly provided for in the list of express powers. The qualifier used in that decision born to us the whole idea of implied powers. The effect was that Congress did have the power to create a Bank. Once the Fed was created in 1913 (our third iteration of a Central Bank) no one challenged the authority of Congress to create that, nor did they challenge the ability of the Fed to create common currency and/or engage in monetary policy of that currency (in the form of actual notes or reserves.)

The Fed may not really be Constitutional in express terms, but in implied powers it will take a new challenge to undo what the McCulloch v. Maryland decision gave to Congress. Libertarians and Constitutionalists hate this ****, but it is what it is now based on the longevity of our Central Banks and the lack of successful challenge of them.

"Audit the Fed" was birthed by people who want to end the Fed, even if the lot of currency supporters still wants the Fed around in some regard. The language of the bill in question is just a continuation of Congress since 2008 giving more power to the GAO to "investigate" the Fed. The Fed is already audited in their holdings, they are also audited in most of their activities already. All but their monetary policy decisions and meetings on that subject. This "Audit the Bill" puts the GAO into those meetings and decisions, and by effect politicizes monetary policy handing that to Congress. Prior to these acts the GAO was kept in the dark, but since 2008 their powers have increased... right into the hands of Congress.

It is window dressing to call this effort keeping the Fed in check, or looking for "wrong-doing." This is about one thing and one thing only... moving to Congress the ability to influence, if not outright control, monetary policy. Constitutional or not is up for debate, disastrous for our currency is the likely conclusion of Congress controlling both the ability to spend and the ability to create more money to spend.
Click to expand...

Thanks for the explanation! :thumbs: I haven't been keeping up with this, but my first thought after reading your post is that we should not give that authority to either Congress or the executive branch, if that idea ever comes up for discussion. My reasoning is since we have two parties that already disagree on most things, including spending on "wish list" items, and since congress people come and go on a regular basis depending on how voting goes, an independent entity is needed if we don't want total monetary chaos in this country. It's bad enough as it is, IMO. :thumbdown:
 
Montecresto said:
OS, I'm curious why returning something to congress that was congresses originally might be considered a disaster? If it's because, look at congress, they don't do there job as it is. The answer is to either make them do their job, or eliminate them and give it to others. I want the decision making process of how and when, why right now or why not till later, all monetary policy to be an open to the public issue. Not made in secret by a dozen guys who could care less who I am and how their decisions affect me one way or the other.
Click to expand...

My challenge to you on that is, what makes you think returning monetary policy to Congress means all of a sudden that Congress will do what is best for the general public?

What I am trying to get my opposition to realize is we talk all the time about money in politics, how easily politicians on both sides of the isle can be lead around by pockets of wealth and influence, and frankly how we already have established a modern day aristocracy within our government. It is not some conspiracy level thinking, we can see very readily how much politicians are influenced by wealth. Perhaps elevated even further by the Citizens United ruling.

I'll agree with you that the Fed more often than not is up to some shady activity, and is prone to making very terrible decisions and "guidance" (or explanation) on economic matters. I'll also agree that Fiat Money systems gives the Fed and the government great latitude in coming up with mechanisms to ensure a very government spending dependent economic model. If there is better alternative to the Fed as it is structured now I am all ears.

Our issue for this discussion is the likely outcome of Congress controlling both Monetary Policy and having great influence (with the President) on Spending Policy. If we can agree that corporate interests, oligarchical thinking, and even the assurance of "too big to fail" continues then who do you think *still* wins with monetary policy in Congress' hands? Wealth and power, or the "public?" These guys already have terrible approval ratings but remarkably high reelection rates. You sure this one issue of shifting monetary policy back to Congress really changes all that much in today's context?

Consider these questions carefully when thinking about Congress obtaining perhaps the biggest power grab of our generation, the control over money and interest rates. At a minimum through coercion and intimidation using the GAO, at worst politicizing the entire monetary decision meeting process in favor of Congressional spending desires. It is the difference between how we would like Congress to ideally act, and how they often act otherwise with their power.
 
Montecresto said:
Howdy Polgara! Audit the Fed's is not a new concept, I've heard about it throughout my life. It's just that not many have been willing to get near that, so it's never gained steam. Hopefully it will happen though. Do you really think that people controlling the money without any oversight are squeaky clean. The idea that an organization such as this, that has never had an audit of its work hasn't been made top priority by the American people is odd to me. The framers said we wouldn't even need a bill of rights if men were angels!
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Greetings, Montecresto. :2wave:

We have become far more global than our Founders could have imagined, IMO, and entities such as the IMF have become powerful as a result. I have read that they are already discussing the use of SDR's - special drawing rights - that would take away the advantage the U.S. has held in being the world's reserve currency. We would become only part of a basket of currencies. IF we lose that "perk," which we got as a result of Kissinger signing an agreement with Saudi Arabia that their oil would be priced worldwide in US dollars only, it's going to mean big changes in this country - few of which will be welcomed by us, because our standard of living is probably going to take a big hit! We have become used to being "the king of the hill" in worldwide affairs, but with the current push to a One World Government I suppose it was inevitable. Our Constitution and Bill of Rights has protected us in many ways, but that will be considered "ancient history" and we will be considered only one of many, with no more rights than any other country. Is that what we want for our future? Have we behaved that badly over the years that we are not trusted by many in the rest of the world?
 
Montecresto said:
Howdy Polgara! Audit the Fed's is not a new concept, I've heard about it throughout my life. It's just that not many have been willing to get near that, so it's never gained steam. Hopefully it will happen though. Do you really think that people controlling the money without any oversight are squeaky clean. The idea that an organization such as this, that has never had an audit of its work hasn't been made top priority by the American people is odd to me. The framers said we wouldn't even need a bill of rights if men were angels!
Click to expand...

I agree 100%.

It staggers my mind that an organization can 'print' trillions of dollars if it wants to - virtually at will and do almost anything they want with it...give it to other countries banks (which the Fed has done), buy companies (which the Fed did when it in essence bought AIG), buy stocks (the Fed has not done that yet - I think - but they could and the Japanese Central Bank does right now), fund the American government deficit, buy up 'toxic' assets from banks and on and on...ALL with virtually no supervision except some token amount from Congress.

What is even more amazing is that the Fed is privately owned - with shares. But only certain people can own them and apparently (it's a semi-secret) the vast majority are owned by banks. So the Fed can 'print' virtually any amount of money and practically give it to the banks that own the Fed...how much more of a conflict of interest can you get?

And the only excuse the Fed can come up with is that if the world knew what they were doing it could destabilize the companies they are helping. Well DUH...shouldn't the world know if a company sucks so badly that it needs the Fed to bail it out?
Plus, others say it might stifle the Fed's 'creativity' if their actions were known to the masses. I say GOOD...I want to stifle their actions.

Any organization that is against transparency ALWAYS has something to hide.

Outside of fighting a war...anyone that thinks the POTUS is the most powerful human on the planet is wrong. It is the head of the Federal Reserve. Janet Yellen is - imo - the most powerful human being in existence at this moment. She can collapse economies with a single speech and pump up stock markets around the world with a single sentence.

And anyone who thinks the Fed is filled with people who are brilliant economists...guess again:

Federal Reserve was blind to crisis brewing in early 2007 - Jan. 18, 2013

The Fed are filled with brilliant BEAN COUNTERS, not brilliant economists.
 
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