http://www.house.gov/paul/congrec/co.../cr091002b.htm
Congressman Ron Paul
U.S. House of Representatives
September 10, 2002
ABOLISH THE FEDERAL RESERVE
Mr. Speaker, I rise to introduce legislation to restore financial
stability to America's economy by abolishing the Federal Reserve. I
also ask unanimous consent to insert the attached article by Lew
Rockwell, president of the Ludwig Von Mises Institute, which explains
the benefits of abolishing the Fed and restoring the gold standard,
into the record.
Since the creation of the Federal Reserve, middle and working-class
Americans have been victimized by a boom-and-bust monetary policy. In
addition, most Americans have suffered a steadily eroding purchasing
power because of the Federal Reserve's inflationary policies. This
represents a real, if hidden, tax imposed on the American people.
From the Great Depression, to the stagflation of the seventies, to the
burst of the dotcom bubble last year, every economic downturn suffered
by the country over the last 80 years can be traced to Federal Reserve
policy. The Fed has followed a consistent policy of flooding the
economy with easy money, leading to a misallocation of resources and
an artificial "boom" followed by a recession or depression when the
Fed-created bubble bursts.
With a stable currency, American exporters will no longer be held
hostage to an erratic monetary policy. Stabilizing the currency will
also give Americans new incentives to save as they will no longer have
to fear inflation eroding their savings. Those members concerned about
increasing America's exports or the low rate of savings should be
enthusiastic supporters of this legislation.
Though the Federal Reserve policy harms the average American, it
benefits those in a position to take advantage of the cycles in
monetary policy. The main beneficiaries are those who receive access
to artificially inflated money and/or credit before the inflationary
effects of the policy impact the entire economy. Federal Reserve
policies also benefit big spending politicians who use the inflated
currency created by the Fed to hide the true costs of the
welfare-warfare state. It is time for Congress to put the interests of
the American people ahead of the special interests and their own
appetite for big government.
Abolishing the Federal Reserve will allow Congress to reassert its
constitutional authority over monetary policy. The United States
Constitution grants to Congress the authority to coin money and
regulate the value of the currency. The Constitution does not give
Congress the authority to delegate control over monetary policy to a
central bank. Furthermore, the Constitution certainly does not empower
the federal government to erode the American standard of living via an
inflationary monetary policy.
In fact, Congress' constitutional mandate regarding monetary policy
should only permit currency backed by stable commodities such as
silver and gold to be used as legal tender. Therefore, abolishing the
Federal Reserve and returning to a constitutional system will enable
America to return to the type of monetary system envisioned by our
nation's founders: one where the value of money is consistent because
it is tied to a commodity such as gold. Such a monetary system is the
basis of a true free-market economy.
In conclusion, Mr. Speaker, I urge my colleagues to stand up for
working Americans by putting an end to the manipulation of the money
supply which erodes Americans' standard of living, enlarges big
government, and enriches well-connected elites, by cosponsoring my
legislation to abolish the Federal Reserve.
WHY GOLD?
By Llewellyn H. Rockwell, Jr.
Is a gold standard feasible again? Of course. The dollar could be
redefined in terms of gold. Interest rates would reflect the real
supply and demand for credit. We could shut down the Fed and we would
never need to worry again what the chairman of the Fed wanted. There
was a time when Greenspan was nostalgic for such a system. Investors
of the world have come to embrace this view even as Greenspan has
completely abandoned it.
What keeps the gold standard from becoming a reality again is the love
of big government and war. If we ever fall in love with freedom again,
the gold standard will once more become a hot issue in public debate