Ron Paul is still trying to get the Fed audited. This has become a long term project, but it looks like the idea may be gaining ground.

If there is nothing hidden, why the obstructions to an audit?

What do you think we the citizens can do to bring pressure on our representatives to push for this audit?

Given the current economic chaos, how vital do you think such an audit is?

What is it he expects to achieve, to prove that it is just as corrupt as any other political institution? I think the facts speak for themselves, it did not act when it should have acted.

Maybe the idea of an audit should get the approvoval of the former Goldman Sachs executives running the government first .

The Fed is already subject to audits by the GAO except that GAO auditors are restricted by law from reviewing monetary policy operations and transactions carried out by the Federal Reserve on behalf of foreign central banks. This restriction was imposed by Congress to assure the independence of the Federal Reserve from political influence.

The question becomes ;is the Fed autonomous ? Bernanke said :
“My concern about the legislation is that if the GAO is auditing not only the operational aspects of the programs and the details of the programs but making judgments about our policy decisions would effectively be a takeover of policy by the Congress and a repudiation of the Federal Reserve would be highly destructive to the stability of the financial system, the dollar and our national economic situation.”

I guess the real question is ;should monitary policy remain indepenent from Congress ? The track records of both institutions are so poor that I can be convinced either way.

1) Who would perform the audit? Is there a body in existence that isn't in a position of conflict of interest? If it's a government agency that performs the audit, isn't that government agency answerable to the government they are auditing? And if it's a private body, doesn't that private body have a conflict as well (If they find anything the government doesn't like, they government will make their existence a pure hell, and the government may reward them in order to NOT find anything).

2) Don't we already have government auditors? They are known as the Inspector General's office. Is Paul suggesting another layer of red tape to accomplish what the IG's office is already doing?

The concept is fine. But it will never happen, and Paul is again just tilting at windmills. Which usually hurts the one doing the tilting more than it hurts the windmill.

Elliot

The bill (H.R. 1207 Federal Reserve Transparency Act)has enough co-sponsors(271) in the House to pass ;but I doubt Madame Mimi will let it come to a floor vote. I think the Senate Dems (Ben Nelson of Nebraska )are blocking it on procedural grounds. The President of course envisions an expanded role in the economy for the Fed. So whatever gets to his desk had better be veto proof.

The auditing authority in bills by Rep Paul ;Sen. Demint would be the GAO. Again ,the GAO already has some auditing authority over the Fed. ;But this bill would greatly expand it.

It'll never see the light of day if Mimi has her way. This administration and Congress have a vested interest in avoiding accountability in order to ram their agenda through. That's why Obama is pushing to get health care and cap and trade finished before the August recess, and why he's delaying the July release of budget numbers until after the recess (http://www.google.com/hostednews/ap/article/ALeqM5jgt-m8CWDFF-r4yaVApcrGCAqvWwD99I1PS00).

Well, I don't claim to be expert on this, but I have heard for years that there has never been a full audit of the FED. Maybe some of you have a definite answer about that?

But it should be self evident, given the HUGE debt that taxpayers have to service, that there should be clear assurance that there is not more being extracted from us than is absolutely required.

I would think as important as this is if there are serious concerns about the honesty of an audit that there could be an independent audit done.

After all, is this not the hub of everything economic?

Is Tom's statement that Goldman Sachs execs are running the government? I think that is a real possibility.

Abraham Lincold started issuing debt free money. He was murdered.

JFK may have been considering following Lincoln's policy. (Some reports said so). He was murdered.

Cause and effect? Who knows for sure?

Is Tom's statement that Goldman Sachs execs are running the government? I think that is a real possibility.

GS alumni Josh Bolton picked Hank Paulson a GS alum for Treasury under Bush . Paulson selected GS alum Neel Kashkari to oversee Treasury's acquisition of $700 billion in distressed mortgage-related assets. Before that ,GS Alum Robert Rubin oversaw the expansion of the Community Reinvestment Act during the Clintoon reign. Tim Geithner ;currently running Treasury is a Rubin protégé . GS alum Stephen Friedman runs the NY office of the Federal Reserve. He worked closely with Geithner ,Rubin ,and Paulson on the AIG bailout . Mark Patterson Geithner's chief of staff at Treasury,is a GS alum. The President just appointed GS Vice Chairman Robert Hormats to serve in the new position at the State Dept ,Undersec. For Economic ,Energy and Agricultural Affairs. Last year GS paid Lawrence Summers, Obama's chief economics adviser and director of the White House's National Economic Council,$135,000 for a single speaking appearance when it was clear he would have a prominent role in a possible Obama Adm.
There are more examples of the revolving door between public office and the GS board room ,including NJ Governor Jon Corzine.But you get the idea . The relationship is incestuous and any action by former GS execs working in the government that benefits GS bottom line is a conflict of interest.

Didn't GS just announce something like $6.2 billion in bonuses?

Why aren't Obama and his cronies complaining about executive bonuses and pay for GS execs? Could it be because Obama's cronies are all former GS execs themselves?

Elliot

Thanks, Tom and Elliot for good informational material.

I still think that the Federal Reserve Act was and is a national disaster. Maybe I'm wrong.

Through American history it has been proved that any meddling or investigation into the Fed can be dangerous to your health. Just ask Lincoln, JFK and the folks on the Titanic. (and yes, I know Lincoln was many years prior to the "invention" of the Fed).

Through American history it has been proved that any meddling or investigation into the Fed can be dangerous to your health. Just ask Lincoln, JFK and the folks on the Titanic. (and yes, I know Lincoln was many years prior to the "invention" of the Fed).

The Titanic? I haven't heard that connection.

The iceberg was a plant

The iceberg was a plant

No, an iceberg is made of ice. A plant has leaves and stuff growing off it. You can't have an iceberg that's a plant...

Oh, wait. Never mind.

:p

I'm still trying to understand how the Titanic fits into this. :confused:

Elliot

The tin foil hatters think the Jesuits conspired with the pro-Fed bankers to get all the anti-Fed people onto a big boat . Then the suicidal Jesuit captain of the Titanic supposedly plowed through an iceberg field to bump off all the anti- Feds.

But in the case of Lincoln,according to the tin foil hatters ;it wasn't the damn Papist ,and it certainly wasn't a p.o.ed southerner. It was the Jews... or specifically the Rothschilds... because Lincoln dared to warn the Americans about the "money powers" .

And JFK . Forget all the other theories about the lone gun man ,Castro ,the Mafia ,the CIA ,LBJ... it was the Fed. The tinfoil hatters are convinced that JFK's issuing of Executive Order 11110 was his death warrant .

No, an iceberg is made of ice. A plant has leaves and stuff growing off it. You can't have an iceberg that's a plant...

Oh, wait. Never mind.

:p

I'm still trying to understand how the Titanic fits into this. :confused:

Elliot

Elliot he has you there an iceberg is a Lettuce, a nice juicy lettuce, you know that salid green

Yeah ;that's the ticket... lettuce!!

The Titanic was sunk by a lettuce that also shot JFK and Lincoln because the Fed and the Jews told it to? :eek:

As good a theory as any, I guess. :D

Nothing like a good conspiracy theory. :cool:

Well, I sure don't know why Lincoln or Kennedy were murdered.

But it does seem absured for US to print money, and then pay interest on it to get it into circulation. I think I understand that it is based on treasury notes which are interest bearing, and hence loans to the government.

But why not just print and spend the money on government projects, and regulate the tax struture to bring it back in after an appropriate time?

It should be possible to determine how many dollars should be in circulation at any given time, and not exceed the necessary amount so as to avoid inflation.

I doubt the major bankers of the world would like it very well, and therefore, it won't happen.

But I think it would be a good thing for our economy.

But why not just print and spend the money on government projects, and regulate the tax struture to bring it back in after an approrpriate time?

For the same reason that the stimulus bill's "shovel ready jobs" programs aren't working. The government MISSPENDS the money.

You see, it takes time before any money can get into the system through government spending on special projects.

The idea in the stimulus bill was to create projects that would improve the infrastructure of the USA... build bridges, tunnels, roads, and buildings necessary for the growth of the country, while at the same time creating construction jobs. And the idea SOUNDS like a good one.

The problem is that it takes time to get permits for all these projects. They need to first be studied for feasability, for environmental impact, etc. The permit process for a major construction job like a bridge or tunnel can take years... even if it is the government doing the project.

Then there's the costs... union wages, material costs (the government always pays too much for its materials), setting up contracts (legal fees will run in the millions or even billions), engineering fees, architectural planning, environmental mitigations, etc.

All the while, nothing is getting built. No jobs are being created. Nothing is actually happening... but money is going out the door. Mostly to be held in escrow until completion of the project (which means it isn't getting into the hands of construction workers or anyone else for that matter).

It can take 5-10 years before a government project even begins to build anything. 5-10 years while NOTHING is being stimulated. And all of this assumes that the licensing and permits will be approved... that some egghead from the EPA doesn't put the project down out of fear of the damage to be caused to the endangered rats or cockroaches of the area.

This is what has been happening with the stimulus bill's "shovel ready" jobs that were anything but "shovel ready". So they have all been scaled down. Now, instead of building new roads and bridges and tunnels, the government is paying to widen and repave some already existing streets. Such jobs aren't nearly as large, don't have nearly the number of employees and don't pay nearly as much as the stimulus bill's original plans. Which means that there is very little stimulus from these projects.

This is the reason that your idea, which sounds wonderful, cannot (and IS NOT) work. The projects that CAN stimulate the economy will take years to approve, and the ones that can get quick approval aren't big enough to stimulate anything.

BTW, issuing bond debt isn't a way for the government to get money out to the public (stimulus). It is a way for the government to obtain capital so that it can fund itself. I think you are confusing the two. Government's issue bonds to borrow money, not to make it available to the public.

They lower interest rates to get money into the hands of the public. They also decrease taxes to get money in the hands of the public.

Lowering interest rates does several things:

1) It makes borrowing more attractive. Borrowed money is then spent by individuals or business, which causes a stimulating effect to the economy.
2) It makes savings LESS attractive and thus promotes investment or spending instead, both of which have a similar stimulating effect.

Decreasing taxes does several things as well.
1) It puts money (disposable income) directly into the hands of the people. The people then spend that money (or at least a portion of it). That spending causes a stimulating effect. More goods purchased means more jobs created to produce more of the goods. More jobs means more money earned. More money earned means more spending. More spending means more goods purchased. This cycle is known as "pump priming".
2) It makes hiring of additional employees more affordable. When businesses hire additional people, those people earn more money, which is then spent. More spending means more goods purchased. See number 1 above.

In my opinion, the best way to put money in the hands of the people is to cut taxes.

People have been complaining recently that Bush was a fool for lowering taxes during a time of war. But they forget that Bush lowering taxes decreased the unemployment rates, got people working again, and caused the pump-priming that is mentioned above. He STIMULATED the economy. Argue as much as you want about Bush "overspending on the war" while lowering taxes, but the effect of it was actually an increase in tax revenue for the government. You don't have to believe me... just look at the IRS statistics for the last 10 years. They are publicly available. You'll see the jump in tax revenue after the Bush tax cuts, despite the lower tax rates. That's because while people and businesses paid a lower RATE for taxes, the actual dollar amounts they paid were HIGHER because their incomes were higher. Yes, the war cost us a lot of money, but the government was actually taking in MORE than it ever had before.

Anyway, that's the deal. Bond issues aren't about stimulus. They are about raising capital. Stimulus comes from other activities that put money in the hands of the people.

Elliot

Well said Elliot.

I wasn't thinking in terms so much as stimulus, but rather questioning whether there might be a better way for government to adhere to the Constitution in the matter of providing currency.

That is a question that goes back to the beginning of the country. You appear to represent the opinion of Jefferson . A central bank was proposed and pushed by Hamilton. There has been a vigorous debate about it's utility since.

The Titanic was sunk by stupidity for failing to give way to an immovable object, the lettuce was minding its own business at the time, both JFK and Lincoln were shot for radically moving the goal posts, so what are the odds on Obama, who opened the debate again on the white/black divide
As you say nothing like a good conspiracy theory