Transparency Act Threatens the Powerful Fed
Bills in the House and Senate Demand Central Bank Audit
Apr 2, 2009
These bills have come as a result of the recent frenzy in lending and printing that has added 2.2 trillion dollars in new debt, and 1.25 trillion new dollars into the economy, causing a rise in inflation (or devaluation of the dollar) by 3% in a single day this past month, as stated by Congressman Paul from the floor of the House of Representatives March 19.
To clarify, this one day's currency increase will eradicate the 2.9% military pay raise that President Obama is proposing for 2010, and when added to the .3% and .4% rises in inflation for January and February respectively, one comes to wonder where citizens who do not have powerful groups campaigning for their compensation will stand a year from now.
Senator Sanders Takes it to Fed Chairman Ben Bernanke
This was all addressed during the Senate Budget Committee hearing in Washington, DC on March 3, as Chairman of the Federal Reserve, Ben Bernanke, waxed indignant following the demand from Senator Sanders that the chairman tell the public who the central bank had lent 2.2 trillion dollars to in the shadow of the outrageous Senate approval of the $700 billion bailout. Chairman Bernanke answered that "it is counter-productive and would destroy the value of the program" to tell which financial institutions received the money.
Senator Sanders showed little sympathy for the borrowers when AIG was making front page news. He moved on to ask Chairman Bernanke if he would intervene on the side of the tax payers to negotiate the credit card rates that go upward of 25%, given that it is the tax payers who are lending 2.2 trillion dollars (or $2,200 for every man, woman and child, according to Sen. Sanders) to the institutions that are receiving preferential treatment that virtually no taxpayer who is lending it would be privy to. Chairman Bernanke deferred the responsibility to the Treasury Department, referencing the TARP (bailout) agreements, arguably stating that it was neither his position to be accountable for the tax payers' money lent, nor to act on their behalf with the institutions that borrowed.
New Bills in the House and Senate Will Lead to Answers
The results of these actions by the Central Bank have brought about H.R. 1207, the Federal Reserve Transparency Act of 2009 in the House, and the Federal Reserve Sunshine Act of 2009 in the Senate. Both bills call for a full audit of the Central Bank before 2010, and are gaining momentum. Congressman Paul's bill in the House of Representatives has over 50 co-sponsors to include Rep. Lynn Woolsey (D) CA, and Rep. John Fleming (R) LA. As more calls for action are made on the web and through more traditional avenues more representatives and senators are getting on board to represent their constituents via this bill as they had been duly elected to do.
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