Two Cheers for The Federal Reserve Transparency Act

Richard Cooper has blogged about Congressman Ron Paul's Federal Reserve Transparency Act of 2009 that has been cosponsored by 282 Congressmen and has been introduced into the Senate as S 604. Let us see if the Senate will play ping pong with this useful bill. Cooper links to the text of the bill on the Government Track site.

The bill would amend Section 714 of Title 31 of the United States Code to require that the audit of the Fed be made available to Congress. It reads:

>‘(1) IN GENERAL- The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010...

‘(A) REQUIRED- A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

‘(B) CONTENTS- The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.’.

The Fed ought to be abolished, not audited. Moreover, an audit will fail to reveal information to the public because Congress is incapable of debating monetary issues intelligently and there is no American news media. Hence, debate about monetary policy in 2009 is on too low an intellectual level to influence policy. In the 19th century Americans had elementary school educations and could understand monetary policy perfectly well. Today, with one fourth of the country graduating from college, the most elementary economic concepts are far too difficult for Congress to grasp.

In other words, while the bill won't hurt, it won't improve the education of Congress or the public (since the American news media is dead their education is of no concern). Revealing monetary data to Congressional idiots will not change Congress's idiocratic nature.

However, the bill cannot hurt if made law, and it is a step in the right direction.