Printing Money Won’t Do It: The Fed Needs Real Change

Printing Money Won’t Do It: The Fed Needs Real Change

Rand Paul is worried.

He’s worried about the economy, and how it impacts Americans. He’s worried about the government’s role in the economy – whether they’re helping or hurting, or whether they should be involved at all.

So naturally, he’s worried about President Obama’s choice to take over the Federal Reserve: Janet Yellen.

To explain why, we have to jump back a few years. For a while now, the Fed has been trying to solve the economy’s poor performance with something called “quantitative easing.” In English, non-financial speak, it means printing more money to help get people spending. So not really solving the problem – just artificially easing it while increasing inflation.

This is a method that current Fed Chair Ben Bernanke has favored during his time as the top dog there. And I’m not sure if you’ve noticed, but it’s not like the economy’s been doing great. Nor has the national debt gotten much better.

Here’s why Paul is worried: Obama’s new choice is essentially Bernanke v 2.0.

As Paul writes in his own Time op-ed, this ‘more-of-the-same’ business is, to use his own word, “madness.”

“In 2013, the Fed has been purchasing – and monetizing the government’s debt – at a rate of $85 billion a month. Just this year, they have added over $800 billion in government debt to their balance sheets. Apparently President Obama’s choice for Fed chairman is just as much an advocate of this policy as her predecessor.”

One of the solutions Paul put forward is some accountability. He proposed a bill – with Democrats, mind you – called the Federal Reserve Transparency Act (more often referred to as the “Audit the Fed” bill). It would add some much-needed transparency to an organization that, as Paul notes, has dealt in secrecy since its inception.

What’s the reason for that? It’s the country’s money they’re dealing with. Why should that be put under less scrutiny than everything else? Like Paul says, it should be put under more scrutiny, especially after the financial troubles the country has dealt with for the last five years.

So Paul wants the Fed to open up the books and allow an independent government audit, to ensure everything is running as smoothly as they claim.

Something different has to be done, because it’s not like the previous strategy has worked all that well. And that’s why Paul is worried – because Yellen might be more of the same.



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