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Thread: Senate votes 96-0 to audit Fed

  1. #21
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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by Ikari View Post
    I really want the Constitution followed.
    The Constitution is being followed. Congress has the power to regulate money, and they've chosen to outsource that power to the Fed.

    Quote Originally Posted by Ikari
    Not exactly bribed, no. Just bending to the establishment. Bernanke went in there like a lion, talking about how he wasn't going to allow this and that. He was going to tighten the leash. He whimpers now, nothing more. Did nothing to solve any problem, did nothing to run the fed in a proper manner.
    As you correctly noted below, the Fed's mission is to balance inflation and unemployment. His power to "not allow this and that" is, at best, very limited. Generally it takes an act of Congress (or the SEC) to do that. So it's not really fair to blame Bernanke for the lack of financial regulation on Wall Street.

    Quote Originally Posted by Ikari
    The federal reserves mandate is to balance inflation with unemployment. Growth is not synonymous with unemployment. Growth can come from market manipulation, gains on Wall Street or in the banking sector. You know, the people who run the Fed and who's irresponsible and uncontrolled behavior got us into the current mess. Growth doesn't mean unemployment. Gaining growth does not mean we had to lesson unemployment. Of course, lowered unemployment can lead to growth as well; but growth itself is not the Fed's mandate; it's unemployment. They did nothing on that front, they did everything on the "growth" side. Help out their buddies on Wall Street at the expense of the rest of us on Main Street.
    Are you suggesting that Bernanke is unaware of the Fed's mission? That saying "inflation and growth" was more than just a colloquial way of saying basically the same thing? I'm sure he's well aware that it's inflation and unemployment.

    Quote Originally Posted by Ikari
    Better than Goldman Sachs. I can vote for politicians, I have no say in Goldman Sachs
    This only holds merit if you can show that Goldman Sachs is somehow compromising the Fed's independence. The fact that he made some decisions that you imagine benefit Goldman Sachs is not sufficient evidence.

    Quote Originally Posted by Ikari
    It buys from the Treasury, yes. The Fed regulates the value of the dollar.

    If the Fed's mandate is to balance unemployment and inflation, how do you think it could accomplish that without being able to affect either? Inflation, BTW, sets what our dollar is worth; that's valuing the dollar. The fed manipulates long term and short term interest rates. They set the inflation rate by doing so. As such, the Federal Reserve is an institute which sets the value of our dollar, a power given only to Congress. Thus the Federal Reserve is property of Congress.
    Even if that's true, so what? Congress has the power to regulate the dollar, and they've chosen to outsource that power to the Fed. Nothing wrong or unconstitutional with that. It's similar to the way the President is commander-in-chief of the military, but he doesn't micromanage every soldier himself; he has chosen to outsource that power to the military command structure.

    Having a certain power under the Constitution doesn't mean that they need to constantly exercise that power. It's perfectly legitimate for them to say "We're going to create an agency so we don't have to do this ourselves."

    Quote Originally Posted by Ikari
    There's nothing wrong with the audit, it in and of itself will not even do anything to the "independence" (like I want an institute which sets the value of my money to be separate and isolated from government) of the Fed. There's nothing wrong with the owner saying, we want to look at the books. We want to know what you've been up to.
    Yes there is. It's a thinly-veiled attempt to dig up some dirt, so that congressmen can rant about how horrible the Fed is and how they could do a much better job, since they clearly know more about economics and finance than Bernanke does. That WILL compromise the Fed's integrity.
    Last edited by Kandahar; 05-11-10 at 05:38 PM.
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    Re: Senate votes 96-0 to audit Fed

    The Congress was never given power to off load their responsibilities. We specifically divided up the powers the way they are. What we told Congress to do, they have to do. No other entity has the rightful power. Only Congress can print and regulate the value of our currency. Any agency which does either of those belong squarely to Congress.

    And if the Fed is hiding some dirt, well we should know about it.

    Also, I do believe that the majority of high ranking people who work at the Fed came from Goldman Sachs.
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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by Ikari View Post
    The Congress was never given power to off load their responsibilities.
    When Congress creates an independent agency to handle certain responsibilities, they are essentially saying "We will stand by these decisions, and for constitutional purposes you may treat these decisions as if they were our own decisions."

    Similarly, Congress has the power to establish post offices. Do you think they have a debate and take a vote on every single post office in the country? No, they've outsourced that responsibility to the USPS. Congress *could* take away that responsibility and vote on every post office if they wanted to, but outsourcing it is not unconstitutional.

    Quote Originally Posted by Ikari
    We specifically divided up the powers the way they are. What we told Congress to do, they have to do. No other entity has the rightful power. Only Congress can print and regulate the value of our currency. Any agency which does either of those belong squarely to Congress.
    Congress created the Fed to handle that, and Congress stands by the Fed's decisions. Congress has simply chosen to exercise this power through a Federal Reserve System.

    Quote Originally Posted by Ikari
    And if the Fed is hiding some dirt, well we should know about it.
    No, my point is that no matter WHAT the "audit" turns up, congressmen will use anything they find as a way of showing how horrible the Fed is. I'm sure they'll be able to find SOME impropriety somewhere and blow it out of proportion to show everyone how horrible the Fed is and how Congress could do a much better job, but that doesn't make it true.

    Quote Originally Posted by Ikari
    Also, I do believe that the majority of high ranking people who work at the Fed came from Goldman Sachs.
    And this compromises the independence of the Fed...how?
    Last edited by Kandahar; 05-11-10 at 07:44 PM.
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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by Kandahar View Post
    When Congress creates an independent agency to handle certain responsibilities, they are essentially saying "We will stand by these decisions, and for constitutional purposes you may treat these decisions as if they were our own decisions."

    Similarly, Congress has the power to establish post offices. Do you think they have a debate and take a vote on every single post office in the country? No, they've outsourced that responsibility to the USPS. Congress *could* take away that responsibility and vote on every post office if they wanted to, but outsourcing it is not unconstitutional.
    Outsourcing is unconstitutional. When the government was made the powers were divided up amongst the 3 branches for very specific reasons. The government is not to muck with that. What we told Congress to do, Congress must do. They can't give it away, they can't abdicate their responsibilities. It's like saying that Congress makes an independent body which handles all the voting. They have a job to do and are paid for it, they do the job as written in the Constitution.

    Thus the Fed belongs to Congress, and because it belongs to Congress it can be audited by Congress at their discretion.

    Quote Originally Posted by Kandahar View Post
    Congress created the Fed to handle that, and Congress stands by the Fed's decisions. Congress has simply chosen to exercise this power through a Federal Reserve System.
    And the Fed belongs to Congress. Congress needs to make sure it's doing its job and doing it properly. So they're finally going to audit the Fed. Bout damned time.

    Quote Originally Posted by Kandahar View Post
    No, my point is that no matter WHAT the "audit" turns up, congressmen will use anything they find as a way of showing how horrible the Fed is. I'm sure they'll be able to find SOME impropriety somewhere and blow it out of proportion to show everyone how horrible the Fed is and how Congress could do a much better job, but that doesn't make it true.
    If the Fed's doing something horrible, maybe we should know about it. If it's acting improperly somewhere, we need to know about it. That's how you fix problems. Not by ignoring them and pretending that we shouldn't even have the knowledge of them; but by finding the problems and addressing them.

    Quote Originally Posted by Kandahar View Post
    And this compromises the independence of the Fed...how?
    Gee I wonder.
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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by Ikari View Post
    Outsourcing is unconstitutional. When the government was made the powers were divided up amongst the 3 branches for very specific reasons. The government is not to muck with that. What we told Congress to do, Congress must do. They can't give it away, they can't abdicate their responsibilities.
    They aren't giving it away. Congress has simply chosen to exercise its authority to regulate money by establishing a Federal Reserve System. This means that acts of the Fed are acts of Congress. Congress has the power to end this authority at any time.

    Quote Originally Posted by Ikari
    It's like saying that Congress makes an independent body which handles all the voting.
    No it's not. Voting is the mechanism through which congressional power is exercised, not one of the congressional powers.

    Quote Originally Posted by Ikari
    They have a job to do and are paid for it, they do the job as written in the Constitution.
    So just to clarify, you DO think that Congress should have a debate and vote on every single post office in the country instead of outsourcing that responsibility to the USPS?

    Quote Originally Posted by Ikari
    Thus the Fed belongs to Congress, and because it belongs to Congress it can be audited by Congress at their discretion.
    Can =/= should.
    I don't think anyone has argued that they CAN'T do that.

    Quote Originally Posted by Ikari
    And the Fed belongs to Congress. Congress needs to make sure it's doing its job and doing it properly.
    Why?

    Quote Originally Posted by Ikari
    If the Fed's doing something horrible, maybe we should know about it.
    Does this kind of dishonest twisting of words actually pass for debate where you're from?

    Quote Originally Posted by Ikari
    If it's acting improperly somewhere, we need to know about it. That's how you fix problems. Not by ignoring them and pretending that we shouldn't even have the knowledge of them; but by finding the problems and addressing them.
    I'm curious. What kind of problems do you imagine you're going to discover? And what makes you confident that correcting them is worth the cost to the Fed's independence?
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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by Kandahar View Post
    They aren't giving it away. Congress has simply chosen to exercise its authority to regulate money by establishing a Federal Reserve System. This means that acts of the Fed are acts of Congress. Congress has the power to end this authority at any time.
    Exactly, and they can audit them at any time they wish to ensure that the Fed is acting properly because the Fed is property of Congress.

    Quote Originally Posted by Kandahar View Post
    No it's not. Voting is the mechanism through which congressional power is exercised, not one of the congressional powers.
    Voting is the method by which power is exercised, true. But if they have the ability to give away all power, then they can give away the mechanism by which power is decided upon.

    Quote Originally Posted by Kandahar View Post
    So just to clarify, you DO think that Congress should have a debate and vote on every single post office in the country instead of outsourcing that responsibility to the USPS?
    I think they have the power to debate and vote on every single post office in the country.

    Quote Originally Posted by Kandahar View Post
    Can =/= should.
    I don't think anyone has argued that they CAN'T do that.
    They are the same for the purpose of this discussion. Congress can and should audit the Fed yearly.

    Quote Originally Posted by Kandahar View Post
    Why?
    Why? Because the Fed is property of the Congress. Because only Congress was given the power to print and regulate the value of our currency. Thus the Fed must be made to properly do the job it is entitled to do through Congress and through the power and sovereignty of the People.

    Quote Originally Posted by Kandahar View Post
    Does this kind of dishonest twisting of words actually pass for debate where you're from?
    Nope, but the point stands. If the Fed has something to hide, we should know about it. If the Fed is acting improperly, we should know about it. If the Fed is doing horrible things, we should know about it. And the way you know about it is to audit them; something well within the power of the Congress to do since the Federal Reserve is property of Congress.

    Quote Originally Posted by Kandahar View Post
    I'm curious. What kind of problems do you imagine you're going to discover? And what makes you confident that correcting them is worth the cost to the Fed's independence?
    Monkeying around with interest rates to best benefit Wallstreet and the Banks instead of fulfilling its mandate to balance inflation and unemployment. And the Fed should not be 100% independent since it must belong to Congress.
    You know the time is right to take control, we gotta take offense against the status quo

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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by danarhea View Post
    And now, I would like to thank someone who has been proposing to audit the Fed for more than 20 years, and who never wavered from this proposal, which he repeatedly introduced into the House. Once called "crazy", this proposal is now passed by a unanimous vote in the Senate.
    I'm really surprised at Congress for passing that law. What the feds do may be questionable, but it plays a big part in world wide financial stability, and the trillions of cash they circulate all over the world has very little effect on our solvency. After all, it's just paper.

    ricksfolly

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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by ricksfolly View Post
    I'm really surprised at Congress for passing that law. What the feds do may be questionable, but it plays a big part in world wide financial stability, and the trillions of cash they circulate all over the world has very little effect on our solvency. After all, it's just paper.

    ricksfolly
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    Re: Senate votes 96-0 to audit Fed

    Your entire argument can be boiled down to the following statement:

    Quote Originally Posted by Ikari View Post
    They are the same for the purpose of this discussion. Congress can and should audit the Fed yearly.
    No. They are NOT the same for the purpose of this discussion. No one has disputed that Congress has the POWER to audit the Fed. The dispute is whether or not it's a good idea. If your only rationale is "because they can," that's an absurd way to pursue policy.

    Quote Originally Posted by Ikari
    Nope, but the point stands. If the Fed has something to hide, we should know about it. If the Fed is acting improperly, we should know about it. If the Fed is doing horrible things, we should know about it. And the way you know about it is to audit them; something well within the power of the Congress to do since the Federal Reserve is property of Congress.
    That is not the way Washington works. It doesn't matter what the investigation turns up, and there's no particular reason to suspect the Fed of any wrongdoing. The purpose of the audit is so that congressmen can run with whatever scraps they can turn up and use it to attack the Fed.

    Imagine that you're the CEO of a big company. I launch an investigation (without any basis whatsoever) to determine whether or not you've embezzled money from the company, and I loudly tell the newspapers all about my investigation. Are you OK with that? After all, if you've done nothing wrong you have nothing to hide, right? The mere presence of congressional investigators breathing down the Fed's neck compromises its independence. And since there is no reasonable suspicion that the Fed has acted inappropriately, they should not launch the investigation in the first place.

    Quote Originally Posted by Ikari
    Monkeying around with interest rates to best benefit Wallstreet and the Banks instead of fulfilling its mandate to balance inflation and unemployment.
    So in other words, since you don't happen to like the policy decisions they've made, there must be some sort of criminal malfeasance afoot.

    Quote Originally Posted by Ikari
    And the Fed should not be 100% independent since it must belong to Congress.
    The president appoints the Board of Governors of the Fed, with the advice and consent of the Senate. Congress can change this mandate at any time, subject to the president's veto. Ergo, the Fed is not 100% independent.
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    Re: Senate votes 96-0 to audit Fed

    Quote Originally Posted by Kandahar View Post
    No. They are NOT the same for the purpose of this discussion. No one has disputed that Congress has the POWER to audit the Fed. The dispute is whether or not it's a good idea. If your only rationale is "because they can," that's an absurd way to pursue policy.
    No, it's not my argument, you must have missed the point. Congress owns the Fed, it can be no other way. Only Congress was given the power to print and regulate the value of our money. Thus any institution, such as the Fed, which sets the value of our currency is property of Congress. It's not that "because they can", it's that they are the only one's with the proper power and they must audit it. The Fed cannot be independent. You can say it should be isolated from the popular opinions which can influence Congress. Fine. But it cannot be 100% independent and be within the confines of the Constitution.

    Quote Originally Posted by Kandahar View Post
    That is not the way Washington works. It doesn't matter what the investigation turns up, and there's no particular reason to suspect the Fed of any wrongdoing. The purpose of the audit is so that congressmen can run with whatever scraps they can turn up and use it to attack the Fed.

    Imagine that you're the CEO of a big company. I launch an investigation (without any basis whatsoever) to determine whether or not you've embezzled money from the company, and I loudly tell the newspapers all about my investigation. Are you OK with that? After all, if you've done nothing wrong you have nothing to hide, right? The mere presence of congressional investigators breathing down the Fed's neck compromises its independence. And since there is no reasonable suspicion that the Fed has acted inappropriately, they should not launch the investigation in the first place.
    There is always reason to suspect the Fed of wrong doing. It is a government agency, and the government was never meant to be a trusted entity. We have to audit, we have to look, we have to make sure that it is doing everything by the book by the powers vested in it by the Constitution. If you wait till the abuse becomes apparent, it's too late. Government must always be watched and constrained. And thus your analogy fails as you try to liken private enterprise and individual to government.

    Quote Originally Posted by Kandahar View Post
    So in other words, since you don't happen to like the policy decisions they've made, there must be some sort of criminal malfeasance afoot.
    Better safe than sorry when it comes to government power and improper use of it. You asked what could be discovered, I gave you one very possible way by which it could. Sorry if you didn't like it, but that's reality. It's why we have to watch the fed. We didn't separate powers because we felt it was cool to make government slow and reactive. We did so to ensure that no one branch gets too much power. This is because government is fundamentally untrustworthy. You can't put all the power into one branch because it will surely abuse it. So you make government obtuse, you make it slow, you make it reactive, and you ensure that no one branch can dominate the others. So too here. The Federal Reserve is a government entity which belongs solely to the Congress. It must be watched, because of the powers it wields it can't be a closed book. It's like if we could get no information on the bills and laws Congress was passing. Well of course that's a bad idea, we need to know what they are doing, why they are doing it.

    Quote Originally Posted by Kandahar View Post
    The president appoints the Board of Governors of the Fed, with the advice and consent of the Senate. Congress can change this mandate at any time, subject to the president's veto. Ergo, the Fed is not 100% independent.
    Damned straight it's not 100% independent. And because it is a duty and responsibility of Congress to maintain, it must be subjected to regular audits to ensure that it is falling within the Constitutionally granted powers of the Congress and we need to ensure that the practices are by the book, in the open, and available for scrutiny.
    You know the time is right to take control, we gotta take offense against the status quo

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