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Now that Congressman Paul's run for the Presidency has ended, this site
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This site is under construction. Please check back again soon! And also check out our educational site on economics:
Congressman Ron Paul's remarks on the House floor on February 3, 2009.
Madame Speaker, I rise to introduce legislation to restore financial stability
to America's economy by abolishing the Federal Reserve. 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
current economic crisis caused by the housing bubble, every economic downturn
suffered by this country over the past century 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 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 freemarket
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.