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Opinion

Cases for a Comprehensive Audit of the Federal Reserve

A portion from Article. I. Section. 9. of the U.S. Constitution states:

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

Many people would consider this reference in the U.S. Constitution as describing an audit of the nation’s money supply; however, as conveyed by Senator Bernie Sanders, the first legitimate audit of the nation’s central bank was released in 2011, and only after the financial crisis of 2008. This took place nearly one-hundred years after the creation of the Federal Reserve System in 1913 (Sanders). Senator Sanders stated, "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world" (Sanders). Between 2006 and 2013 I have experienced four separate layoffs at Caterpillar. I have also witnessed, through participation in the marketplace, the continual devaluation of the U.S. dollar, causing rising prices due to inflation. With record debt and continued secrecy regarding monetary policy, the American public must hold the institutions of government and finance accountable by demanding a comprehensive audit of the Federal Reserve System on a reoccurring basis. Taking a closer look at the history behind America’s central bank can help create an even greater case for an audit of the Federal Reserve, which controls the reserve currency of the world, the U.S. dollar.

As reported by Michael Snyder through the Business Insider, the Federal Reserve was born out of secrecy during a crucial time in American history (Snyder). In fact, in 2010 the Federal Reserve celebrated the one-hundred year anniversary of this secret meeting which occurred on Jekyll Island in November of 1910 (Snyder). The meeting was held by government officials and people at the pinnacle of the banking industry (Snyder). In regards to this meeting the article quotes Bertie Charles Forbes, founder of Forbes magazine, as stating, “Picture a party of the nation's greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundreds of miles South, embarking on a mysterious launch…” This secret founding of the Federal Reserve, also known as the Fed, is one excellent reason for the people to demand openness in banking through a comprehensive audit. The fact that the Federal Reserve dispensed over sixteen trillion dollars to banks and corporations around the world within the duration of only two years is another monumental reason to audit the Fed (Sanders). Although the Federal Reserve has not received much scrutiny over the years, there have been those opposed to Fed policy, and to the Fed itself. For example, Ron Paul, congressman from Texas, has been a long critic of the Fed.

Ron Paul has long called for an audit of the Fed, and even an end to the Fed itself, as displayed in the title of his book, “End the Fed.” As quoted in the Business Insider, Paul stated, "The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress." In a CNN piece written by Annalyn Censky, the author explains how Ben Bernanke, former Chairman of the Fed, was adamantly opposed to Ron Paul’s push to audit the Fed, claiming it could have a "chilling effect” (Censky). Ron Paul’s bill to audit the Fed was about more than a financial audit, as the Fed conducts its own internal audits through private entities (Censky). Paul’s bill was about auditing the internal workings of the Fed which determine its monetary policies (Censky). The laws which are now in place shield the Fed from exposing exchanges between governments, corporations, and central banks from around the world (Censky). As reported by The Washington Times, Paul’s bill to audit the Fed was finally passed in the House in 2011 and in 2014. Albeit Congressman Paul is now retired, this latest victory for the bill has witnessed its largest support, with a 333-92 tally in September 2014 (Dinan). Still, Harry Reid, the Senate Majority Leader, has changed position on the issue saying he will not allow a vote on the bill in the Senate (Dinan). With all of the substantial opposition to forthrightness, it is clear to see the importance of the public becoming more engaged in this important issue of banking. Yet another reason to seek an extensive audit of the Fed.

Alan Greenspan, former Fed chairman, made a powerful statement on PBS News Hour when asked by Jim Lehrer, “What is the proper relationship, what should be the proper relationship between a chairman of the Fed and a president of the United States?” Greenspan responded, “Well, first of all, the Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take. So long as that is in place and there is no evidence that the administration or the Congress or anybody else is requesting that we do things other than what we think is the appropriate thing, then what the relationships are don't, frankly, matter. And I've had very good relationships with presidents.” The Federal Reserve is more powerful than most people realize, and the institution should be reevaluated to give the people more involvement in the affairs of the nation’s money.

In summary, as trillions of dollars are squandered globally with little to no oversight, leaving the American posterity with an unsurmountable debt, it is long past time for the American public to act. The time for an exhaustive audit of the Federal Reserve is now.

Works Cited

Sanders, Bernie. "The Fed Audit." Sen. Bernie Sanders. N.p., 21 July 2011. Web. 29 Nov. 2014.

Snyder, Michael. "The Federal Reserve Is Holding A Conference On Jekyll Island To Celebrate 100 Years Of Dominating America." Business Insider, Inc. [New York] 03 Nov. 2010. Web. 25 Nov. 2014.

Censky, Annalyn. "Audit the Fed? Bernanke Fights Back against Ron Paul." CNN Wire [New York] 18 July 2012: n. page. LexisNexis Academic. Web. 25 Nov. 2014.

Dinan, Stephen. "House Approves Ron Paul’s ‘Audit the Fed’ Bill." The Washington Times, 17 Sept. 2014. Web. 29 Nov. 2014.

PBS. "Greenspan Examines Federal Reserve, Mortgage Crunch." PBS, 18 Sept. 2007. Web. 20 Nov. 2014.