U.S. must change Federal Reserve
Many changes must be made to our central bank, the Federal Reserve.
We must first narrow the role of the Federal Reserve. Currently it has a “dual mandate,” which is to provide maximum employment, stable prices and moderate long-term interest rates. This should be changed so the Federal Reserve focuses solely on interest rates and price stability.
We must also have more transparency regarding what the Federal Reserve does. It operates independently of the federal government, and its decisions do not have to be approved by the president or any branch of the federal government. Regarding the transparency of the Federal Reserve, Rep. Dennis Kucinich, a leading voice for monetary policy reform, said, “the reality is that our monetary system was privatized long ago, and the Federal Reserve is a private institution. If we have given over to a private entity the task and the privilege of handling our monetary system, we can expect that entity to consistently protect its own interests over the interests of the American people.”
Enactment of Rep. Ron Paul’s “Federal Reserve Transparency Act of 2011” would be a crucial first step for more transparency by directing the comptroller general, who is the director of the Government Accountability Office, to conduct a full audit of the Federal Reserve system.
More transparency, combined with the narrowing of the Federal Reserve’s role, will provide a starting point for true monetary policy reform, a more prosperous economy and a sound and stable dollar.