The Heritage Foundation's Michel Norbit examines some of the attacks on the audit bill and explains why the claim that an audit would compromise the Federal Reserve's "independence" has no validity:
Besides, the notion of Federal Reserve “independence” borders on pure fiction.
It is true that nobody from Congress or the Executive branch calls Janet Yellen every day to tell her exactly where to set the fed funds target. But that’s pretty much the extent of the Fed’s independence.
There are so many pieces of evidence which prove – and that’s a word I rarely use – the Fed is not really immune to even short-term political pressure that it’s hard know where to start.
First, the Fed is nothing but a creature of Congress – it was created via the Federal Reserve Act in 1913. Originally, the Treasury Secretary served on the Federal Reserve Board. It’s pretty hard to argue the Fed was politically independent under that arrangement, which lasted until the 1930s.
And the Fed is the fiscal agent of the U.S. government. The more U.S. debt the Fed holds, the more it enables deficit spending.
Congress also gave the Fed its (inappropriately named) dual mandate, the directive which requires the Fed to focus on full employment.
In what universe are federal debt, deficit spending, and unemployment non-political issues?
Read the whole article here and sign the petition to your legislators to Audit the Fed.
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