End the Fed's expanded power over financial privacy

Having worked for Ron Paul for over twenty years, first as legislative director in his congressional office, then as president of his Campaign for Liberty, I may be biased, but I think one of the most forward-thinking books of the last decade is Dr. Paul's 2010 End the Fed.  In that book, Dr. Paul lays out the economic, constitutional, and moral case against the central bank and for a free market.  Unfortunately, even though the economy was already on the verge of another Fed-created recession before the coronavirus shutdown, Congress is giving more power to the Federal Reserve.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act appropriated $454 billion for the Treasury to support the Federal Reserve's lending programs to struggling businesses and make sure their employees continued receiving paychecks during the shutdown.  Not surprisingly, the program is not working out as planned.  Kathryn Judge wrote in Forbes on April 20, 2020, "[U]nfortunately, the last few weeks make it clear that the Fed is ill-suited to provide the direct capital support these companies need."

One of the big problems with the new programs is a lack of transparency.  According to Salon, the CARES Act allows the Federal Reserve to convene secret meetings on corporate bailouts.  Such secrecy is standard operating procedure for the Fed.  Months before the pandemic hit, the Fed was pumping trillions in overnight loans to prop up banks and keeping the identities of those banks secret.  Federal law actually prohibits Congress and the public from learning the truth about monetary policy.  This is why the Campaign for Liberty has made passing Audit the Fed (H.R. 24) a priority.  Audit the Fed is currently sponsored in the Senate by Senator Rand Paul (R-Ky.) and in the House by Representative Thomas Massie (R-Ky.).

Despite the Federal Reserve's history of failure, there are those in Congress who want to expand the Fed's role in our economy.  Michigan Democratic representative Rashida Tlaib recently  put forth a proposal called the Automatic BOOST to the Communities Act that would provide a preloaded $2,000 government-issued debit card and replenish the card with $1,000 every month.  A similar idea of government-issued digital money is being tried now in communist China.  According to the Wall Street Journal, "China's central bank has introduced a homegrown digital currency across four cities as part of a pilot program, marking a milestone on the path toward the first electronic payment system by a major central bank." 

In China, paper cash and digital transactions run through private banks are not under the control and monitoring of government, therefore government wants to "encourage" people to move away from cash and existing digital currencies to currencies that can easily be monitored by government.  The Chinese digital currency is also an attempt to weaken cryptocurrencies like Bitcoin that are free of any government interference because they are conducted by peer-to-peer digital transactions.

Like the Chinese digital currency, Representative Tlaib's bill will enable the Federal Reserve to monitor every financial transaction used with the digital dollar, taking away what little financial privacy we have left.  Federal Reserve digital currencies will dilute the value of private cryptocurrencies that many are turning to as an alternative to rapidly depreciating Federal Reserve notes.

The government's hysterical response to the coronavirus is leading to the biggest expansion of government power since at least the New Deal and World War II.  With few exceptions, most members of Congress are not even paying attention to how much the various relief and bailouts are expanding the national debt.  Even worse, few are expressing any concern over the massive new powers being granted to the Fed, much less calling for immediate passage of the Audit bill.  The growing number of Americans who understand the truth about the Federal Reserve must put pressure on Congress to Audit, then End the Fed.

Having worked for Ron Paul for over twenty years, first as legislative director in his congressional office, then as president of his Campaign for Liberty, I may be biased, but I think one of the most forward-thinking books of the last decade is Dr. Paul's 2010 End the Fed.  In that book, Dr. Paul lays out the economic, constitutional, and moral case against the central bank and for a free market.  Unfortunately, even though the economy was already on the verge of another Fed-created recession before the coronavirus shutdown, Congress is giving more power to the Federal Reserve.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act appropriated $454 billion for the Treasury to support the Federal Reserve's lending programs to struggling businesses and make sure their employees continued receiving paychecks during the shutdown.  Not surprisingly, the program is not working out as planned.  Kathryn Judge wrote in Forbes on April 20, 2020, "[U]nfortunately, the last few weeks make it clear that the Fed is ill-suited to provide the direct capital support these companies need."

One of the big problems with the new programs is a lack of transparency.  According to Salon, the CARES Act allows the Federal Reserve to convene secret meetings on corporate bailouts.  Such secrecy is standard operating procedure for the Fed.  Months before the pandemic hit, the Fed was pumping trillions in overnight loans to prop up banks and keeping the identities of those banks secret.  Federal law actually prohibits Congress and the public from learning the truth about monetary policy.  This is why the Campaign for Liberty has made passing Audit the Fed (H.R. 24) a priority.  Audit the Fed is currently sponsored in the Senate by Senator Rand Paul (R-Ky.) and in the House by Representative Thomas Massie (R-Ky.).

Despite the Federal Reserve's history of failure, there are those in Congress who want to expand the Fed's role in our economy.  Michigan Democratic representative Rashida Tlaib recently  put forth a proposal called the Automatic BOOST to the Communities Act that would provide a preloaded $2,000 government-issued debit card and replenish the card with $1,000 every month.  A similar idea of government-issued digital money is being tried now in communist China.  According to the Wall Street Journal, "China's central bank has introduced a homegrown digital currency across four cities as part of a pilot program, marking a milestone on the path toward the first electronic payment system by a major central bank." 

In China, paper cash and digital transactions run through private banks are not under the control and monitoring of government, therefore government wants to "encourage" people to move away from cash and existing digital currencies to currencies that can easily be monitored by government.  The Chinese digital currency is also an attempt to weaken cryptocurrencies like Bitcoin that are free of any government interference because they are conducted by peer-to-peer digital transactions.

Like the Chinese digital currency, Representative Tlaib's bill will enable the Federal Reserve to monitor every financial transaction used with the digital dollar, taking away what little financial privacy we have left.  Federal Reserve digital currencies will dilute the value of private cryptocurrencies that many are turning to as an alternative to rapidly depreciating Federal Reserve notes.

The government's hysterical response to the coronavirus is leading to the biggest expansion of government power since at least the New Deal and World War II.  With few exceptions, most members of Congress are not even paying attention to how much the various relief and bailouts are expanding the national debt.  Even worse, few are expressing any concern over the massive new powers being granted to the Fed, much less calling for immediate passage of the Audit bill.  The growing number of Americans who understand the truth about the Federal Reserve must put pressure on Congress to Audit, then End the Fed.