[Congressional Record (Bound Edition), Volume 146 (2000), Part 15]
[House]
[Page 22269]
[From the U.S. Government Publishing Office, www.gpo.gov]



 CONGRESS IGNORES ITS CONSTITUTIONAL RESPONSIBILITY REGARDING MONETARY 
                                 POLICY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Texas (Mr. Paul) is recognized for 5 minutes.
  Mr. PAUL. Mr. Speaker, at a frantic pace we anxiously rush to close 
down this Congress with excessive legislation while totally ignoring 
the all-important issue of monetary policy.
  Congress has certainly reneged on its responsibility in this area. We 
continue to grant authority to a central bank that designs monetary 
policy in complete secrecy, inflating the currency at will, thus 
stealing value from the already existing currency through a dilution 
effect.
  The Federal Reserve clings to the silly notion that economic growth 
causes inflation, thus trying to avoid the blame it deserves. The 
Federal Reserve then concludes that an economic slowdown is the 
solution to the problem it created. Those who argue to continue the 
inflationary process are equally in error. As if the economy were an 
airplane, the monetary authorities talk about a soft landing with the 
false hope of painlessly paying for the excesses enjoyed for a decade.
  It should surprise no one that our financial markets are getting more 
volatile every day. Inflating a currency and causing artificially low 
interest rates always leads to malinvestment, overcapacity, excessive 
debt, speculation, and dangerous trade imbalances. We now live in a 
world awash in a sea of fiat currencies, with the dollar, the yen, and 
the Euro leading the way. The inevitable unwinding of the wild 
speculation, as reflected in the derivatives market, is now beginning.
  And what do we do here in the Congress? We continue to ignore our 
constitutional responsibility to maintain a sound dollar. Our monetary 
policy of the last 10 years has produced the largest financial bubble 
in all of history, with the good times paid for by borrowing and an 
illusion of wealth created in a speculative stock market. Our current 
account deficit, now running over $400 billion per year, and our $1.5 
trillion foreign debt, has been instrumental in financing our 
extravagance. Be assured, the piper will be paid. The markets are 
clearly reflecting the excesses of the 1990s.
  Already we hear the pundits arguing over who is to be blamed if the 
markets crash or a recession hits. Some have given the current 
President credit for the good times we have enjoyed. If the crash 
comes, some will place the blame on him as well. If problems hit later, 
the next President will get the blame. But the truth is our Presidents 
deserve neither the credit for the good times nor the blame for the bad 
times.
  The Federal Reserve, which maintains a monopoly control over the 
money supply, credit and interest rates, is indeed the culprit and 
should be held accountable. But the real responsibility falls on the 
Congress, for it is Congress' neglect that permits the central bank to 
debase the dollar at will.

                              {time}  1945

  Destroying the value of a currency is immoral and remains 
unconstitutional. It should be illegal. And only a responsible Congress 
can accomplish that.
  In preparation for the time when we are forced to reform the monetary 
system, we must immediately begin to consider the problems that befall 
a nation that permits systematic currency depreciation as a tool to 
gain short-term economic benefits while ignoring the very dangerous 
long-term consequences to our liberty and prosperity.




                          ____________________