The Republican Party may add the call for an audit of the Fed to its party platform. Bloomberg.com reports:
Republicans are considering including a plank in their party platform calling for a full audit of the central bank.
Prodded by the failed primary bid of longtime Fed critic Ron Paul — and the grassroots enthusiasm the Texas congressman’s cause inspired among bail-out weary Tea Party activists and small government advocates — Republicans are entertaining a prospect that has long made them and some of their financial supporters cringe.
Paul, in an interview, warned that if Romney’s backers resist the effort, it could result in a politically distracting and messy fight in front of the national media. “It’s good economics and it’s good legislation, but it’s also good politics, because 80 percent of the American people agree with it,” Paul said. If Republican leaders “exclude it, I would think some of my supporters would be annoyed and feel strongly enough to take it to the floor under the rules.”
When Congress established the First Bank of the United States in 1791 at Alexander Hamilton’s recommendation, the Treasury Department was given the power to inspect the bank’s books at any time. Furthermore, while the Treasury oversaw the First Bank of the United States, the House of Representative repeatedly audited Hamilton and the Treasury Department, each time finding nothing wrong.
While it is important for the Federal Reserve to be independent, just as the First Bank of the United States was independent, this powerful government-created institution needs oversight. All publicly-traded corporations are audited by CPAs and federal government agencies are audited by the General Accounting Office. The Federal Reserve should be bound by rules similar to those established for government agencies and public corporation.
If we are to have a government-granted monopoly over money printing (something the Founders would have opposed), it should at least be subject to the principles of checks and balances that our Founding Fathers held so dear. A regular audit of the quasi-government agency known as the Federal Reserve is something the Founders would have supported to prevent the accumulation and misuse of power.
Alexander Hamilton’s Treasury Department had oversight over the First Bank of the United States. Today’s Treasury and Congress should have similar oversight over today’s central bank, which is much more powerful than the national bank of 200 years ago.