Ron Paul's bill to audit the Fed just passed.

[Vertnut]

Er, are you insane? I was responding to CJ, who mentioned something about budgets and welfare recipients in his response to my question.

Yeah. I know.

[Durantula]

Yeah. I know.

Okay, just want to make sure you were aware that

You mentioned "budgets" and "welfare recipients" in the same sentence. It made about as much sense as your muck did.

was nonsensical.

[jw33]

Anyone want to explain how allowing the asshats in Congress oversight of monetary policy is a good thing for the economy?

Its not like everything is going to magically be perfect, but it is a step in the right direction IMO. It would be nice to know who gets what and why when they decide to drop dollars from the sky.

[Durantula]

Its not like everything is going to magically be perfect, but it is a step in the right direction IMO. It would be nice to know who gets what and why when they decide to drop dollars from the sky.

Yay, a legit response!

Do you believe transparency would be preferable over, say, the political pressure that could be used against the nation's central banking system? What if members of Congress attempt to politicize monetary policy? Remember, this was a problem with the Second Bank of the United States when Biddle and members of Congress curried political favor with one another. Would allowing congressional oversight of monetary policy not begin to blur the distinction between the government and the independent Federal Reserve?

Edit: Regarding the 2nd part of your reply: You might find the answer to "who gets what and why" by reading the GAO's annual audit of the Fed (this audit includes all non-policy aspects of the Fed) as well as the Fed Chairman's bi-annual speech to Congress explaining what the Fed is doing and why.

[jw33]

I think politicizing the central banking system has been going on for some time now and I believe it would be pretty naive to think any different. And by congress pretending to stick their heads in the sand and claim they have nothing to do with it is a joke. Congress spends and the federal reserve facilitates their appetite no matter which party is in power. Everyone in the system is just going along to get along so that one day they can move into the bubble of the week and get theirs. Yes congress is broken and out of control and it is going to take a lot of decent people to ever change that. However it doesn't mean we shouldn't try and the central banking system is probably heading for a serious melt down without some thinning of the herd. The current restrictions on the GAO audits also include anything the FED does with foreign central bank or governments which are some of their larger transactions. It isn't even really about a Obama/Bush/Clinton/whoever popularity contest.

[Durantula]

I don't disagree with you in the context of how you describe the politicization of the banking system between the Congress and the Fed. But I was speaking more towards the FOMC operations...things like setting interest rates, the buying and selling of bonds and securities, and so on. In that regard I don't believe Congress or even the executive branch has any pull but I believe allowing both of these branches access to an audit (which, financially speaking, would be damn near impossible since the Fed creates its own accounting rules, but that's a different story...) would allow them to pressure the FOMC into decisions that would be best for their re-election campaigns rather than what's best for the economy. I think that's a very real prospect. Considering that ridiculous debt ceiling fight last summer and the continuing battle between Republicans and Democrats to create jobs legislation, this doesn't seem like a far-fetched idea if Congress is wielding audit power over the Fed's open market operations. I understand the sentiment behind RP's Audit the Fed mantra, but I don't think it's good economic policy. Rather, it seems disastrous.

Edit: This is why I fear this allows Congress to get too involved with the Fed's operations, straight from the legislation:

(2) CONTENTS.—The report under paragraph
2 (1) shall include a detailed description of the find3
ings and conclusion of the Comptroller General with
4 respect to the audit that is the subject of the report,
5 together with such recommendations for legislative
6 or administrative action as the Comptroller General
7 may determine to be appropriate.

[SMEGMA STENCH]

So why the sudden change?

It actually came time to do it