The Federal Reserve at 100: Time for a Change?



Federal ReserveBy Paul Dupont

There is a new movement afoot in Washington DC: a movement for monetary reform.

This past week in the House, Rep. Kevin Brady (R-TX) introduced the Centennial Monetary Commission Act, a bill which would “establish a commission to examine the United States monetary policy, evaluate alternative monetary regimes, and recommend a course for monetary policy going forward.”

In other words, Congress may finally be taking the first step to reigning in the dysfunctional Federal Reserve policies which continue to hold the country back economically.

In the century since the creation of the Federal Reserve system, this country has seen a great deal of economic and financial instability. Thanks in part to a monetary system which has detached the value of the U.S. dollar from any stable base, the country has suffered through financial bubbles and collapses, lengthy economic downturns, and periods of high inflation, all while the dollar has slowly lost its purchasing value, hurting middle and working class families.

In addition, these Federal Reserve monetary policies have also allowed the federal government to spend its way into a $16 trillion (and counting) hole, risking hopelessly burying future generations of Americans under a mountain of debt.

Recognizing the problems which these policies continue to cause, the Republican Party in 2012 included in its platform a call for a “commission to investigate possible ways to set a fixed value for the dollar.” However, this call need not be a partisan one.

As reportedly outlined in Rep. Brady’s bill, the new commission would be chaired by an equal number of Democrats and Republicans: three Congressional leaders each as well as three members appointed by each party. The commission would also include two non-voting members appointed by the Secretary of the Treasury and the Chair of the Federal Reserve Board of Governors. Thus, any recommendations coming from this commission would of necessity be bipartisan.

Given that this year is the hundredth anniversary of the creation of the Federal Reserve, there would seem to be no better time for our legislators to step back and evaluate the institution’s performance as well as grapple with its failures. The Centennial Monetary Commission Act represents a valuable opportunity for Congress to finally move toward this goal of much-needed monetary reform.

Paul Dupont is a research assistant with American Principles Project who is currently a fellow in the  John Jay Institute program in Philadelphia.

Photo Credit: Michael Daddino via Flickr (CC-By-2.0)

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  • http://www.facebook.com/people/Steve-Smith/597669016 Steve Smith

    Not gonna happen!
    The Brady bill suggests putting together a bunch of politicians to float ideas on restricting the power of the Fed. “The Brady Bunch” for want of a better word. The politicians love spending, no Fed no money.
    It’s like asking alcoholics to vote for prohibition.

  • Peter Palms

    That is correct the Fed is not Federal nor does it have any reserves. It has caused purchasing power of the dollar to decrease b y 64% every generation of 20 Years and by a 100% over a lifetime. This is confiscation and theft by creating money with nothing behind it. It is called fiat, legal counterfeiting permitted to the Fed by Act of Congress.with nothing behind it. It is unconstitutional. The act was passed without a quorum. The fed owns Congress which can spend all it wants outside the budget using QE. All three previous Central banks have collapsed as have all such fractional banking systems in all of history.. It transfers wealth fro0m the poor (savings) to the Rich (interest income on the debt. Inflation is theft. The present Fed will inevitably collapse as well and that is imminent.The American people have lost control of their government. That is what makes this possible. The elected vote for the Fed which supplies unlimited financing to Congress which no longer represent the electorate

  • Peter Palms

    Change is impossible while the Banks own Congress and and provide Congress with unlimited financing. hat is correct the Fed is not Federal nor does it have any reserves. It
    has caused purchasing power of the dollar to decrease b y 64% every
    generation of 20 Years and by a 100% over a lifetime. This is
    confiscation and theft by creating money with nothing behind it. It is
    called fiat, legal counterfeiting permitted to the Fed by Act of
    Congress.with nothing behind it. It is unconstitutional. The act was
    passed without a quorum. The fed owns Congress which can spend all it
    wants outside the budget using QE. All three previous Central banks have
    collapsed as have all such fractional banking systems in all of
    history.. It transfers wealth fro0m the poor (savings) to the Rich
    (interest income on the debt. Inflation is theft. The present Fed will
    inevitably collapse as well and that is imminent.The American people
    have lost control of their government. That is what makes this possible.
    The elected vote for the Fed which supplies unlimited financing to
    Congress which no longer represent the electorate