Sen. Rand Paul: The Fed Is Crippling America

Ron Aldof Sun, 01/10/2016 - 17:15

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"On Jan. 12, Congress is scheduled to vote on the “Audit the Fed” legislation (H.R. 24/S. 264), which, if passed, would bring to an end to the Federal Reserve’s unchecked—and even arguably unconstitutional—power in the financial markets and the economy.

We aren’t the first to be wary of the powers of central banks. Founding Father Thomas Jefferson viewed the powers of central banks as being contrary to the protections of the Constitution. As Jefferson wrote: “I sincerely believe that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

"As of Dec. 17, the Fed is paying 50 basis points on both required and excess reserves. So the Fed, itself, is increasing how much it will pay to “borrow” reserves from the commercial banks. Given the estimated $2.6 trillion in excess reserves, at 50 basis points that means the Fed will be paying commercial banks some $13 billion in annual income. Right now, the Fed is paying the same on required and excess reserves, though that in principle could differ.

As the Fed keeps raising interest rates through this same mechanism, the amount paid to commercial banks will only mushroom. You can forgive analysts for not discussing this; it was not even mentioned in the Fed’s Dec. 16 announcement.

As the Fed pays commercial bankers more in interest payments, there is dollar-for-dollar less for the Treasury; in other words, for a given level of federal expenditures, the deficit is that much higher. Therefore, the U.S. taxpayer is subsidizing commercial banks to not make loans to their customers—or rather bribing them to charge their customers higher interest rates on loans. And, the U.S. taxpayer is going deeper into debt to provide this bank subsidy."

Time: A lot more; http://time.com/4170969/sen-rand-paul-audit-the-fed/

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#IStandWithRandAndLiberty! Let's get back to Liberty and Freedom. Trump is working with the Establishment.

TheTaoistTroll

01/11/2016 - 10:32

After the FED

We need to break up all the big banks. Why; because im a capitalist and we need more competition. Break up each bank into at least 60-100 different entities. I'm also under the idea that there isn't much difference between financial, investment institutions and big banks.

Then it's just a matter of time as the people whom have benefited from these insinuations die off and every generation loses half of their estate to the government. THe only people who should become wealthy are those whom produce, and not those who conspire.

Those who are; are those whom are not.

Donald Trump

01/11/2016 - 14:12

There's a word for using law

There's a word for using law to break up voluntary economic organizations: regulation.

TheTaoistTroll

01/11/2016 - 18:01

Regulation that

was used to create entities that would not be as large and affluent as the are today. Regulation is also used to maintain the status quo. They also use regulation as barriers of entry into market to prevent competition. I'm not sure voluntary is accurately used to describe the WallStreet.

Competition is sin. - John D. Rockerfeller

Those who are; are those whom are not.

ATruepatriot

01/11/2016 - 10:38

Absolutely

Great Statement!

"Jack of all Trades...Master of None" But forever learning more!

Donald Trump

01/11/2016 - 00:13

Fed is a figleaf

The "Fed" has sadly become (has it always been?) a fig leaf for the commercial banks and investment banks that have been operating since well before the Fed was lobbied for and created by those banks.

The banks are the financial backbone of the above-board corporate economy, the state-contractor corps, agribiz, defense, and equally the underground black markets in drugs, illicit oil, terrorism, etc. Law firms play a closely related role.

They played this role in British history and American history long before the Fed.

Why doesn't Rand attack the private financial powers that grew up largely under laizes faire? Is he playing a game: blame the government, distract attention from the real issues? Privatize/loot everything, austerity... sell it to the banks!

Rand is no Putin, he's a shill.

People and thought-schools who claim the Fed is the source of all this instability and cyclicality in markets are creating a convenient "evil government" strawman/figleaf to attack while leaving the real culprits unnamed. Even Rothbard could point to the private networks that created and managed the whole thing, despite himself accepting to a false/simplistic philosophical framework.

How does it benefit the public to attack the Fed when its the private banks and corporations that created the Fed from a laizes faire condition, and who set policy through congress?

If you got rid of the Fed, without getting rid of the private money power that controls congress, wouldn't they just have Rand/other politicians create Fed 2.0 (central bank 3 or 4?)

The function of the Fed is to smooth out il-liquidity during market cycles and to maintain the private banking role in the operations of Treasury, which could be handled without any private banker input.