In anticipation of the upcoming 100th anniversary of the Federal Reserve on December 23, Representative Kevin Brady (R-Texas, shown), Chairman of the House Joint Economic Committee, decided back in March to offer a bill to create a commission to study the Federal Reserve and its effects on the American economy. He no doubt expected that his bill, H.R. 1176, entitled the “Centennial Monetary Commission Act of 2013,” would gain traction as more and more attention would be drawn to the Fed on its 100th anniversary.
So far, his strategy is working. He initially had 12 co-sponsors and that number is now up to 27. His bill, also dubbed the “Brady Commission,” is getting attention from the conservative media and has been taken on as a major action plan by at least one conservative political action group.
Brady’s bill would “establish a commission to examine U.S. monetary policy, evaluate alternative monetary regimes, and recommend a course for monetary policy going forward.” It would also examine how United States monetary policy since the creation of … the Federal Reserve System in 1913 has affected the performance of the United States economy in terms of output, employment, prices, and financial stability over time … [and] recommend a course of action for United States monetary policy going forward.
This would not be an “audit the Fed” bill but instead a review of the Fed’s monetary actions and responses over the past 100 years with an eye to improving its performance in the future. As Forbes magazine put it:
The Centennial Monetary Commission calls for a bipartisan, bicameral commission. It contemplates an empirical assessment of the outcomes of various monetary policies engaged [in] by the Federal Reserve System.
It is not an exercise in Fed bashing. It is an exercise in objective empiricism.
Forbes noted, however, that if the bill passes and the commission is created, all bets are off:
The gold standard is not, by any means, the focus of the Brady Commission, Nor … is gold excluded from the six enumerated monetary policy options to be closely examined….
The Brady Commission simply will give all contenders, including gold, a fair forum.
Conservative think tanks like Heritage and Cato are lining up to support the bill. Heritage’s economist Norbert Michel said, “It’s time for Congress to formally review the Fed’s monetary policy” while Cato Vice President James Dorn agreed:
It is time to judge the Fed’s 100-year history and to consider the constitutionality of a pure discretionary fiat [paper] money regime….
We should assemble the best monetary minds and have a real debate over the fundamental flaws in the Federal Reserve System.
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