The Fed was already audited. Governors are appointed by the Federal government, most importantly the Chairman. It's never been done but if the actions of the chairman got noticeably out of line with reality, the President would be able to revoke his chairmanship. The Fed is more transparent today than it ever has been in it's history. Only in the past few decades has the Fed released meeting minutes; Bernanke is the first chairman to hold a press conference after every FOMC and the Fed has just recently initiated a new communications policy that will increase the Fed's transparency even further. The concept of an apolitical central bank is necessary for it to function correctly. The thought of monetary policy being decided by the idiocy of Congress is terrifying.
-Yes, it gets "audited" to make sure that it is following regulations, like
"That includes everything from bank supervision to consumer issues to payment systems."1
What that audit under the GAO doesn't cover is :
"The GAO can’t review most of the Fed’s monetary policy actions or decisions, including discount window lending (direct loans to financial institutions), open-market operations and any other transactions made under the direction of the Federal Open Market Committee. It also can’t look into the Fed’s transactions with foreign governments, foreign central banks and other international financing organizations."1 Which is undoubtedly the meat and potatoes of the Fed's undertakings.
- Why would a president ever revoke a chairman's chairmanship? He does every President such amazing favors. They artificially stimulate the economy especially in election years to provide a false sense of progress.
2
- Bernanke's testimonies before the Congressional subcommittee are a joke. He doesn't HAVE to answer a damn thing he doesn't want to.
3
Right, and look how the world has changed since then. You really think the gold standard prior to 1973 is something we could return to? Please look at the recent M1 aggregates, monetary BASE, currency in circulation, total debt outstanding etc. Even a return to a gold standard at an absurdly low exchange rate would wipe out the possibility for any meaningful credit growth as we would be subject to the quantity of a metal that is mined out of the ground by private mining companies. Regardless, there isn't enough gold in the world to justify the current levels of global currencies. Asset prices would collapse overnight, and the majority of the world that uses the dollar as a reserve currency would see unprecedented currency devaluations. If we returned to a gold standard, the public would be able to offset any attempts by the government to increase currency and credit by giving both back to the government in return for gold. The constant removal of currency from circulation would cause credit to tighten substantially and the general price level of goods and services to fall. The effect would be massive deflation and significantly reduced economic activity.
You also seem to be forgetting
this. A gold standard would not remove federal manipulation of currency. The federal government could still, at will, change convertibility rates, manipulate national gold supply, and pass executive orders such as the one linked above.
The Fed's primary purpose is price and interest rate stability. I support monetarism, like the beautiful man in your avatar, and believe we need more hawks on the board of the Fed but Paul's cries for a reversion to commodity-backed currency only speaks to his age and his out-of-date ideas.
- That is the exact problem. We've created an unsustainable system that would be extremely difficult to move back to a gold standard, that doesn't mean that it's not the right answer. Right now under a fiat money system, there is absolutely nothing backing this monopoly money that we call the US Dollar. The value of the dollar is whatever the hell they say it is, and they can manipulate it to any degree that they wish. Going back to a gold standard without removing the Federal Reserve would be worthless and would change nothing. Both actions along with others must be undertaken, and yes it will be very painful, but much better for all of us in the end.
- I love when people cry about the horrible dangers of deflation. Yes, that would be so awful if the value of our savings suddenly became worth a damn. I am well aware of the short term economic consequences of deflation, but you must remember that the dollar has lost 93% of it's value since 1913. A penny used to be worth something, now it's a nuisance. We'd hardly suffer if our purchasing power suddenly adjusted to counteract it's inflated value.
- Just because it's the Fed's "purpose" to promote price and interest rate stability, doesn't mean they're doing it.
- About Executive Order 6102... Don't even get me started on that bastard FDR. Just because one of our presidents managed to literally rob Americans blind doesn't mean that gold is a bad idea. I mean, it's genious, diabolical even, making it illegal to own gold buillion, with a harsh punishment of 10 years in prison and or 10k in fines, then buy all the gold from the American public at $20/ounce, just to turn around and peg it at $35/ounce. He in my opinion is the worst president in American history, but my reasons for that could fill an entire thread.
I generally detest the notion that American "imperialsim" is the cause of terrorism in the United States, but I agree with Paul's idea of reducing militairistic interventionism. However, the United States has a strong national interest in maintaining social stability across the globe by disallowing radical regimes that engage in flagrant human rights abuses and foreign terrorism to form. Comparing the United States to Switzerland in terms of foreign policy shows that you don't believe in American exceptionalism in geopolitical politics. I do.
- I think history speaks for itself. We have a vicious cycle of propping regimes up in the middle east just to come back a decade or two later to fight them. It's always "bringing democracy and peace" to the middle east, when it's little more than simple imperialism. Look at Iran, we have bases in 11 nearby countries surrounding them.
4 Are they assholes? Absolutely. But do they have a reason to be worried? Absolutely. All of this while our own society rots away.
- I personally with my own eyes have seen how wasteful we are in Afghanistan, and how un-winnable a war in Afghanistan is. The Taliban simply want us out of their country, and to be honest, we'd want the same. (though they're still assholes)
- American exceptionalism? Ha, no, you're right, I don't think that we're so damn superior to every country or that we have the God given task to police the entire world. It's absolutely ludacris and we are really paying for it.
You can't just go 'back to the federal budget from 10 years ago'. You need legal, structural changes to government that Paul would have no control over. I agree that is something we need to do, but Paul is just pandering to conservatives when he says he will cut $1 trillion from the federal budget in one year. If we ever want to meaningful reduce the growth rate in federal spending it will take large majorities to accomplish entitlement reform.
- I agree that Ron Paul may be overplaying the power that the US president would actually have with such intentions, but it nevertheless is a step in the right direction. And yes, we can just go back to the budget of 10 years ago, but some people are going to have to lose their precious governmental programs. Boo hoo.
Sources:
1.
What Would a Federal Reserve Audit Show? - Real Time Economics - WSJ
2.
http://www.cfainstitute.org/learnin...s/robert_johnson_presidential_term_sample.pdf
3.
Bernanke says no to where the money went - YouTube
4.
http://static7.businessinsider.com/image/4ee6562eecad04150d00003f/us-bases.jpg (We have bases in the red countries)
