Friday, November 21, 2014

Audit The Federal Reserve Bill Passes House

By Cornelius Nunev

Some people are not enamored of the Fed, the independent government bureau that determines the nation's financial policy and sets interest rates. The House of Representatives has just approved a stringent bill to audit the Fed, though it isn't likely to go anywhere.

Call to audit the Fed gaining momentum

The Federal reserve controls how much a dollar is worth and the money it takes for a bank it lend mortgages, installment loans and more. It was created in 1913 and impacts daily life regularly with its control of lending and inflation. Many people do not realize how much it impacts their life every single day.

A ton of legislators and citizens have asked that the Federal reserve be audited, which is why a new bill is being considered that would require the Federal reserve to open its book up to the public. It is an "independent government agency" technically meaning that it is part of the government but is a private company still.

Approved in House

A bill has just approved the House of Representatives, according to ABC, that would "open the books" of the Federal reserve, possibly to the GAO or some other bureau. The bill was, naturally, authored and sponsored by Representative Ron Paul of Texas, a constant critic of "the Federal reserve." The bill passed 327 for to 98.

The bureau has been taking care of finances by publishing its balance sheet every week and by getting internal audits complete yearly. Deloitte and Touche was the firm that did the most recent audit, according to CNN. One issue is that it takes way too long to get records from meetings where the bureau decides to increase inflation. It takes three weeks to release meeting minutes and five years for transcripts to come out. The bill is being put together to allow instant access to the policy decisions, particularly those relating to money.

Problem with audit

According to Fed chairman Ben Bernanke, there is no problem with having more transparency in the fed, but he would not be okay with a law that demands an audit, according to Bloomberg. The problem is that it could trigger political corruption and manipulation if the Fed is controlled by Congress.

The bill is unlikely to pass in the U.S. Senate. Bloomberg quoted Representative Barney Frank as saying "no one here expects it to become law."

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