[Congressional Record Volume 155, Number 21 (Tuesday, February 3, 2009)]
[Extensions of Remarks]
[Page E192]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  FEDERAL RESERVE BOARD ABOLITION ACT

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                             HON. RON PAUL

                                of texas

                    in the house of representatives

                       Tuesday, February 3, 2009

  Mr. PAUL. Madam 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 free-market economy.
  In conclusion, Madam 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.

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