Rand Paul 2010 | U.S. Senate

The recent elections were an important referendum on the liberal economic policies of the Obama administration. The results clearly showed that voters overwhelmingly rejected candidates who supported the $780 billion stimulus program and Obama-Care and that they favored smaller government and less regulation.

Ironically the most controversial governmental institution on the planet was not up for a vote and has never been subject to any real democratic process: The Federal Reserve. Created by Congress in 1913 as an independent regulatory agency, the Fed is administered by a seven-member board of governors (all unelected with 14-year terms) that autonomously decides national monetary policy.

Now it is true that the current chairman, Ben Bernanke, treks up to Capital Hill twice a year to make a policy statement and answer questions from lawmakers. Ultimately, however, the Fed does exactly and precisely whatever it wants to do. And what it has done historically, and what it is currently doing, is stupid and even dangerous and deserves the widest possible exposure and criticism.

In its simplest terms, the Fed is legislatively authorized to manipulate the nation’s money supply in an attempt to maintain “full employment” with reasonable “price stability.” This means the Fed increases the money supply when unemployment rates are high (like now) and lowers it when the economy experiences price inflation.

Read more here.

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