Ron Paul's Misguided Views on the Federal Reserve bank

Ron Paul's Misguided Views on the Federal Reserve bank

Presidential Candidate Ron Paul has become the quirky candidate embraced by the fringe groups. He campaigns as a stop the war libertarian. What rankles me about his position is his view that the Fed should be abolished. Take a listen at the video below:

There is so much to disagree with here. His biggest argument is that because the Fed is an independent institution, it lacks the proper transparency and oversight to properly function. Well, that was the whole idea. The Fed needed to be removed from politics so that Fed Chairmen didn't succumb to political pressure to print money and help politicians stay in office. Independence is essential. George H Bush wanted Greenspan to lower interest rates in 1991 so that he could stay in office. Imagine what would happen if Presidents and Congress had more influence.

They do by the way have influence. Every four years the President chooses a Fed Chairman who must be approved by the Senate. If a Chairman isn't doing well or lacks the public trust, he can be removed after his four year term expires. This is unlike a Supreme Court justice who serves for life.

In the video he also says that the United States has only grown via a $800 billion yearly accounts deficit. This is wrong. The United States enjoys one of the highest rates of productivity growth in the world and this, more than anything has contributed to the country's growth in wealth.

He also makes the point that the wealthy were the main beneficiaries of the Fed's low rate policy from 2000-2007. This ignores the millions of middle and lower class consumers who benefited from lower rates on mortgages, credit cards, etc. The rate of home ownership in the country has soared. While some took on more debt than they could afford, whose fault is this. As a libertarian, Paul should realize that responsibility rests with the individual.

I realize its fun and a bit hip to get on the Ron Paul bandwagon. But remember what happened the last time we didn't have a Federal Reserve - The Great Depression. Things may sometimes get a bit off-kilter with the Fed, but they can sure get a whole lot worse without it.

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

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Comments

  • Amanda P

    October 16, 2007

    Does everyone forget that we had a very long period in this country without a central bank and with a commodity-backed currency. It was called the gold standard and it was replaced because it didn't work. Sorry boys, but those are the facts. The US on the gold standard was hit with chronic unemployment and lots of up and down cycles. There were several depressions in the 1800s that brought a lot of economic pain and misery. Economists (most of whom are not rich and feeding off the supposed trough of the Fed) have repeatedly studied the issue and found no sound reason for returning to a commodity-backed system. You may wish it would work. You may want it to work. You may think it's cool and anti-establishment to say it will work but there is no proof that it will. The only proof that we have is over 100 years on a gold standard that created a lot of misery for everyone except the rich. That's right, there were still plenty of wealthy people and bankers under a commodity-based system - Rockefeller, Carnegie, Chase, Vanderbilt, etc. Nothing changes.

    I'm all for improving the system and making it more fair and equitable. But I need to hear facts and see the proof. If someone came and said let's become Communists I'd laugh in the same way someone wants to bring back the gold standard. Take me forward, not backward.

  • American

    October 17, 2007

    Commie.

    Why do you want a centrally planned economy? That's totally against the idea of "free market".

  • steviee

    October 20, 2007

    Federal Reserve Fraud. Fleecing America. http://www.google.com/search?q=federal+reserve+fraud&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

  • DC

    October 22, 2007

    ANYONE WHO ADVOCATES THE FED IS A PUPPET,THE CENTRAL BANKS OF THE WORLD IS ONE MONOPOLY.HAVE YOU REASEARCHED
    THE DEATHS (ASSASSINATIONS)OF PAST PRESIDENTS???HOW ABOUT jfk proposition 11110 HIS DEATH WARRANT.I CAN'T BELIEVE HOW F------ IGNORANT THE CITIZENS OF THE USA ARE OUR FORE FATHERS WOULD PUT PUPPET POLITIANS AND SOCIALIST PRESIDETIAL CANDIDATES UNDER ARREST FOR TREASON YES TREASON A SADDENED PATRIOT.MY FAMILY MEMBER WAS INVOLVED IN CREATION OF THE BILL OF

  • DC

    October 22, 2007

    WAKE-UP AMANDA P. YOUR SO NAIVE.REASEACH LINCOLNS ECONOMY(GOV. ISSUED PAPER)WHY WAS HE KILLED????HIS CONCERNS WERE THE ENEMY IN FRONT AND THE MONEY MEN BEHIND.LOOK AT MONEY TIGHTNING 1.8 BILLION TO .4BILLION A DECADE LATER.THE FED IS PRIVATELY HELD.OR CAN YOU SHOW US THEIR ANNUAL REPORT???? AMANDA.BESIDES I BET YOU TKINK THE CIVAL WAR WAS ABOUT SLAVERY.LOL

  • DC

    October 22, 2007

    PLEASE DON'T DISCREDIT ME FOR MY GRAMMER ERRORS THESE TOPICS GET US ALL GOING.AMERICA STARTED PAPER CALLED SCRIPS,AND WORKED.HAMILTON WAS A PUPPET,THE 1ST BANK OF THE USA,AND THE 2ND BANK OF THE U.S. AND THE FED.WERE AND ARE STILL CONTROLED BY THE SAME ENTIDY.THE 1ST BANK ABOLISHED MONEY MEN AFTER THEIR 20YR CHARTER ENDED.THE MONEY MEN WERE VERY MAD,AND STARTED THE WAR OF 1812 TO ENDEBT AMERICA SO WE NEEDED THEIR HELP ONCE YOU NEED THEIR HELP YOUR'E A JUNKY.LOOK WHAT HAPPENED TO ENGLAND IN THE EARLY 1800'S.THE MONEY MEN BACKED BOTH SIDES(BRITAN A JUNKY

  • Amanda P

    October 24, 2007

    @DC - these are the same ridiculous assertions that have been out there for years. the money men, code word usually for the Jews btw) have started all of the wars, including the revolutionary war, the war of 1812, the civil war, ww1, ww2, the korean war, the vietnam war, the first iraq war, and now the current iraq war. they are looking to enslave the world, because you are simply not smart enough to escape their clutches. right? isn't that what you are saying? no more beating around the Bush.

    Now let's ignore the fact that without these "money men" the US wouldn't exist. That's right, money men supplied the funds to fight the revolutionary war and hire France. Without French help and the French Armada Washington would have lost the war.

    But let's ignore that for now. Who forces you to go out and get a loan? Who forced you to buy more than you should on your credit card? Who forced you into protecting your social security benefits and your Medicare - the true cause of the country's debt. No one, not the Fed, or the money men, or anyone. If you don't believe in borrowing money, then don't. But I bet everyone on here who has posted a comment has a mortgage, or car loan, or a student loan. The bankers don't put us in debt, we put oursevles in debt. Don't try to blame other people for your problems. If you don't want to borrow don't buy, or save up your money and wait. Getting rid of the Fed isn't going to solve it.

    I'll also say this one more time. We tried a commodity based currency. It was called the gold standard, and it failed. If anyone can show me any real, empirical evidence (not evidence from some pseudo-economist) supporting the benefits of a commodity based system then we can have a discussion. Until then, it's just rhetoric.

    One last thing DC. The Fed does not issue an annual report because it is not a corporation. You can though, access information about the Fed, like all government agencies via their website. If you need additional information you can get it via a Freedom of Information request, once again, the standard way for getting information from FEDERAL AGENCIES.

    http://www.federalreserve.gov/generalinfo/foia/request.cfm






    Let's take this to the next logical conclusion.

  • dc

    October 25, 2007

    amandaPWHO'S ADVOCATING A GOLD STANDARD?? WHO SAID THE JEW MONEY MEN? WITHOUT MONEY LENDING THERE WOULDN'T BE AN ECONOMY.NO EDUCATION FOR LONELY SMART-ASS BRATS LIKE YOU.NOW TAXES SSI ARE CASH-FLOW FOR DEBT SERVICE.IN A SSI PLAN PEOPLE ARE CONTRIBUTING ABOUT 15% OF GROSS INCOME UP TO 80K. THAT IS WHAT NEEDS TO BE UNDER SERIOUS EXAMINATION.THESE YOUNG WORKERS ARE LOSING HUNDREDS OF THOUSANDS EACH AT RETIREMENT.ANYTHING YOU BUY WITH THE EXCEPTION OF GROCERIES IS TAXED AND CASH FOR A LOAN OF SOME SORT.

  • JIM

    October 25, 2007

    AMANDA;ARE YOU LITTLE SLOW???WE DON'T WANT TO HEAR ANYTHING MORE FROM YOU.I'M A REPUBLICAN ALSO BUT YOUR A BABBBBLING IDIOT,WE ALL KNOW HISTORY 101 AND CAUSES&EFFECTS BUT AN IMPERMEABLE MIND IS THE LAST THING ANY ONE NEEDS.

  • ANDY J

    October 25, 2007

    WE (USA) FINANCE EVERY WOE IN THE WORLD,ANYONE AGAINST THE USA FINANCING OURSELVES IS A LITTLE SKEWED.AND MAYBE NOT AS SMART AS THEY THINK THEY ARE??

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