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Senate votes 96-0 to audit Fed

danarhea

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WASHINGTON — The Senate voted 96 to 0 Tuesday to open the secretive Federal Reserve Board's emergency lending practices to a congressional audit, as well as require a detailed disclosure of who's getting the funds.
"We are on the verge of lifting the veil of secrecy on perhaps the most important government agency in the United States of America,” said amendment sponsor Sen. Bernard Sanders, Ind.-Vt., "an agency which has control and spends trillions of dollars. They do it behind closed doors."


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.

Thank you, Ron Paul.

Article is here.

 
Very suprised it got passed
 
Of course the Fed is already audited, but OK. I don't think allowing Congress the ability to do it really matters much. I mean I'm cool with it and all, but what are they going to find that no one else has?
 
Of course the Fed is already audited, but OK. I don't think allowing Congress the ability to do it really matters much.

Yea right. The Fed's balance sheet will be a matter of public record now; that's absolutely amazing and unprecedented.
 
Yea right. The Fed's balance sheet will be a matter of public record now; that's absolutely amazing and unprecedented.


Dude, it already is! Honest. I work in the biz. The Fed is audited and its statements are public. Really.
 
Dude, it already is! Honest. I work in the biz. The Fed is audited and its statements are public. Really.

On the surface it is already audited, but the closed door bailouts are not, and many other items are not either. The American public deserves to see a paper trail here of EXACTLY where their money went.
 
On the surface it is already audited, but the closed door bailouts are not, and many other items are not either. The American public deserves to see a paper trail here of EXACTLY where their money went.


Like I said, I'm fine with it. But it's not really as secretive as Ron Paul thinks it is. The financial statements are currently subject to several levels of audit. They are audited by an outside accounting firm (Deloitte and Touche). The Office of Inspector General also conducts audits. And the Fed is subject to review by the Government Accountability Office. In other words, Ron Paul isn't that clever. Congress isn't going to find anything. But audit away.
 
Like I said, I'm fine with it. But it's not really as secretive as Ron Paul thinks it is. The financial statements are currently subject to several levels of audit. They are audited by an outside accounting firm (Deloitte and Touche). The Office of Inspector General also conducts audits. And the Fed is subject to review by the Government Accountability Office. In other words, Ron Paul isn't that clever. Congress isn't going to find anything. But audit away.

For my own curiosity, could you please provide the relevant statutes that deal with these specific audits?

Also, here is a good analysis of the modified bill for anyone who is interested.
 
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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.

Thank you, Ron Paul.

Article is here.

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The Federal government...a body that has put the US some 13.5 trillion dollars in debt due to deficit spending...is now going to investigate and be critical of 'the fed'. Thats ALMOST as laughable as the federal government questioning big banking's business practices.
 
The Federal government...a body that has put the US some 13.5 trillion dollars in debt due to deficit spending...is now going to investigate and be critical of 'the fed'. Thats ALMOST as laughable as the federal government questioning big banking's business practices.

Good point. The last thing we need is the U.S. Congress telling anyone how to be fiscally responsible.
 
That's quite the read!

Correct me if I'm wrong, but this audit doesn't actually say who gets the money and why, does it? Does it examine transactions between the Fed and foreign central banks?

The auditors have to see all that to prepare the audit, but just like in GE's audit, every last detail of every transaction is not disclosed. The Federal Reserve Banks lend money to member banks every single day. So listing those transactions would be a bit much! Each Federal Reserve Bank has its own audit. The "Fed" is actually not one thing like people think it is. It is really 12 regional Federal Reserve Banks that operate under the supervision of the Board of Governors (the audit I linked to). Those Banks do the work of the Fed. Profits are sent back to the Treasury. To get a full picture you need all 12 audits as they operate separately.
 
Obama needs to do all that he can to kill this bill.

The Fed's independence must NOT be compromised by stupid politicians who have absolutely no understanding of economics or finance. Ben Bernanke has done a great job, and even if he hadn't, does anyone truly think that Congress could do a better job? That's basically what you're advocating by supporting this bill.
 
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.

Thank you, Ron Paul.

Article is here.

[/COLOR][/LEFT]

I'm surprised it passed, but about damned time. The Fed belongs to Congress as only Congress was given the power to print and regulate the value of our currency. They need to make sure it's running the way it's supposed to for the reasons it's supposed to. I hope they take this seriously and work to uncover WTF the fed has been doing.
 
Kandahar said:
The Fed's independence must NOT be compromised by stupid politicians who have absolutely no understanding of economics or finance. Ben Bernanke has done a great job, and even if he hadn't, does anyone truly think that Congress could do a better job? That's basically what you're advocating by supporting this bill.

It's not for the concept that Congress can do a better job. I hope we all agree that they can't. The problem is that the Fed is independent from the chain of command and have no reporting authority.

Stekim is right that the information has been publicly available for quite some time, although I doubt John Q. Public was aware of it, and couldn't understand line 1 of it even if they knew. If the GAO had at least some say in it, I'd understand it.
 
Obama needs to do all that he can to kill this bill.

The Fed's independence must NOT be compromised by stupid politicians who have absolutely no understanding of economics or finance. Ben Bernanke has done a great job, and even if he hadn't, does anyone truly think that Congress could do a better job? That's basically what you're advocating by supporting this bill.

Congress was the one given the power. The Fed must be regulated, and at this point I'd much rather have the Congress meddling than not. Bernanke did not do a good job, he folded to the powers that be. Wallstreet and the banks dictated what was done. Independence....HA. The thing which values our currency, which manages unemployment and inflation (Bernanke, BTW, said the fed mandate was to balance inflation and growth; I'll let you figure out what's wrong with that statement) should NOT be independent. Only Congress is allowed to print and regulate the value of our currency. Anything which prints or regulates the value of our dollar thus belongs directly and solely to Congress.
 
It's not for the concept that Congress can do a better job. I hope we all agree that they can't. The problem is that the Fed is independent from the chain of command and have no reporting authority.

Well the idea of ANY independent agency is to insulate them from the politics of the day, which seems especially wise for something as important as monetary policy. However, they are held accountable through checks and balances just like any other agency. The Board of Governors of the Fed are appointed by the President with the consent of the Senate. They can also be impeached and removed from office before the end of their term, for cause. And Congress has the power to change the Fed's structure, should the need ever arise.

(However, there's a difference between having that power and actually exercising it. Since there is no need for them to exercise it now, they shouldn't, lest the Fed become politicized.)
 
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Congress was the one given the power. The Fed must be regulated, and at this point I'd much rather have the Congress meddling than not.

Why? Congressmen are not typically trained in economics or finance. Most of them have absolutely no understanding of how the Fed works. Do you really want to hear congressional campaigns include promises like "If I'm elected, I'll keep the interest rates low"? Ughhh.

Ikari said:
Bernanke did not do a good job, he folded to the powers that be. Wallstreet and the banks dictated what was done. Independence....HA.

I'm curious what you think Bernanke should have done. And I'm curious as to why you think his decisions (whether you agree with them or not) weren't independent. He isn't an elected official, so he doesn't have any campaign coffers to fill. Are you saying that the banks bribed him with kickbacks?

Ikari said:
The thing which values our currency, which manages unemployment and inflation (Bernanke, BTW, said the fed mandate was to balance inflation and growth; I'll let you figure out what's wrong with that statement)

That's a fairly accurate description of the Fed's job. I don't see anything wrong with it. Enlighten me.

Ikari said:
should NOT be independent.

If the Fed isn't independent, then our monetary policy will become based on whatever direction the political winds are currently blowing, rather than what is the best monetary policy. Generally that means that our interest rates will be kept lower than they should be, because congressmen want to boost the economy NOW while they're in office, even if it causes a crash many years down the road.

Ikari said:
Only Congress is allowed to print and regulate the value of our currency. Anything which prints or regulates the value of our dollar thus belongs directly and solely to Congress.

Technically the Federal Reserve doesn't print money. The US Mint does that, which is under the Department of Treasury. The Fed controls the money supply, which is slightly different.

As for regulating the value of our currency, Congress last exercised that power in 1971, when they allowed the value of our currency to float freely. That has been the congressional policy for the last 40 years. The Fed does not have the ability to change that.
 
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Why? Congressmen are not typically trained in economics or finance. Most of them have absolutely no understanding of how the Fed works. Do you really want to hear congressional campaigns include promises like "If I'm elected, I'll keep the interest rates low"? Ughhh.

I really want the Constitution followed.

I'm curious what you think Bernanke should have done. And I'm curious as to why you think his decisions (whether you agree with them or not) weren't independent. He isn't an elected official, so he doesn't have any campaign coffers to fill. Are you saying that the banks bribed him with kickbacks?

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.

That's a fairly accurate description of the Fed's job. I don't see anything wrong with it. Enlighten me.

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.

If the Fed isn't independent, then our monetary policy will become based on whatever direction the political winds are currently blowing, rather than what is the best monetary policy. Generally that means that our interest rates will be kept lower than they should be, because congressmen want to boost the economy NOW while they're in office, even if it causes a crash many years down the road.

Better than Goldman Sachs. I can vote for politicians, I have no say in Goldman Sachs

Technically the Federal Reserve doesn't print money. The US Mint does that, which is under the Department of Treasury. The Fed controls the money supply, which is slightly different.

It buys from the Treasury, yes. The Fed regulates the value of the dollar.

As for regulating the value of our currency, Congress last exercised that power in 1971, when they allowed the value of our currency to float freely. That has been the congressional policy for the last 40 years. The Fed does not have the ability to change that.

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.

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. All the resistance to it...makes you wonder what's on those books. If there is improper action on the side of the fed as it relates to our money...hang them all.
 
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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.

Ikari said:
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.

Ikari said:
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. :roll:

Ikari said:
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.

Ikari said:
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."

Ikari said:
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. :roll: That WILL compromise the Fed's integrity.
 
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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.
 
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.

Ikari said:
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.

Ikari said:
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.

Ikari said:
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?
 
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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.

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.

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.

And this compromises the independence of the Fed...how?

Gee I wonder.
 
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.

Ikari said:
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.

Ikari said:
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?

Ikari said:
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.

Ikari said:
And the Fed belongs to Congress. Congress needs to make sure it's doing its job and doing it properly.

Why?

Ikari said:
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?

Ikari said:
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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