Don’t Look Now, But Monetary Policy Just Became a Top Issue in the GOP Primary

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It’s greatly encouraging to see the GOP candidates focus more on one of the largest economic problems facing the United States: the Federal Reserve and monetary policy. On Tuesday night, we witnessed the GOP field address monetary reform as a key to economic fairness and growth in a bigger and more substantial way than ever before. Candidates centered their comments on the problems created by the Federal Reserve’s artificially low interest rates and how it has adversely affected equitable prosperity through rising prices and stagnant wages for working families.

The Federal Reserve’s zero interest rate policy repeatedly came under fire at the Fox Business GOP debate, and several candidates chimed in on the issue substantively:

Rand Paul: “I think the Federal Reserve has made [income inequality] worse. By artificially keeping interest rates below the market rate, average ordinary citizens have a tough time earning interest, have a tough time making money. They’re actually talking now about negative interest. The money as it’s created through quantitative easing or other means tends to start out in the big banks in New York. And because we’re now paying interest for them to keep the money there, much of that money has not filtered out into the economy. So what we’re finding is there is increasing income disparity and income inequality.

“We also find that as the Federal Reserve destroys the value of the currency, what you’re finding is that, if you’re poor, if you make $20,000 a year and you have three or four kids, and you’re trying to get by, as your prices rise or as the value of the dollar shrinks, these are the people that are hurt the worst. Continue Reading

It’s Time to End the Fed’s Money Monopoly

Photo credit: Kurtis Garbutt via Flickr (CC BY 2.0)

History suggests that the only way to rein in the sprawling Federal Reserve is to end its money monopoly and restore the American people’s ability to use gold as a competing currency.

The legislative compromise that created the Fed in 1913 recognized that the power to print money, left unchecked, could corrupt both the government and the economy. Accordingly, the Federal Reserve Act created the Federal Reserve System without a centralized balance sheet, a central monetary-policy committee or even a central office.

The Fed’s regional banks were prohibited from buying government debt and required to maintain a 40% gold reserve against dollars in circulation. Moreover, each of the reserve banks was obligated to redeem dollars for gold at a fixed price in unlimited amounts.

Over the past century, every one of these constraints has been removed. Today the Fed has a centrally managed balance sheet of $4 trillion, and is the largest participant in the market for U.S. government bonds. The dollar is no longer fixed to gold, and the IRS assesses a 28% marginal tax on realized gains when gold is used as currency.

The largest increases in the Fed’s power have occurred at moments of financial stress. Federal Reserve banks first financed the purchase of government bonds during World War I. The gold-reserve requirement was dramatically reduced and a central monetary policy-committee was created during the Great Depression. President Richard Nixon broke the last link to gold to stave off a run on the dollar in 1971.

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How to Unite the Party: Fight the Fed!

The following is adapted from APP Chairman Sean Fieler’s remarks at the American Principles Project’s Practical Federalism Forum in Hooksett, N.H., on Oct. 3.

Photo credit: Kurtis Garbutt via Flickr (CC BY 2.0)

We Americans are in an anti-establishment mood.  We’ve been lied to. We know it and we are determined to put an end to it.  We want elected officials who will tell us the truth.

Now, Democrats interested in the truth.  And there are some, God bless their souls, that have a solution to the lie.

That solution is Bernie Sanders and his message of hope. The socialist dream is just 18 trillion dollars of spending, and we can tax the rich to pay for it.  Well, you’ve got to give them credit for honesty, but that’s not the solution I’m looking for.

We Republicans also want someone who will tell us the truth, but not to tell us about the state of big government and their plan to pay for it.  We want a candidate that is going to be honest about their plan to shrink the size and scope of government and revive the American experiment in limited government and the America dream of prosperity and liberty.

Our Republican primary process, reflects exactly that: a search for a new kind leader that is going to actually change things.

This makes a world of sense.  Just think, for a minute, about the journey that we Republicans have been for over three decades.  We’ve won elections.  We had Reagan, we had Newt, we had the Presidency and the Congress under George W. Continue Reading

On Common Core, Bobby Jindal Leads

The following is adapted from APP Chairman Sean Fieler’s introduction of Gov. Bobby Jindal at the American Principles Project gala on Feb. 5 in Washington D.C.

To the parents from all over the country, from Maryland, New York, Ohio, Louisiana and Indiana that have joined us here today:  you are the reason that we are winning.  And, not just winning, but winning on principle.

And not just any principle, but the principle of human dignity.

For we understand what America’s founders so clearly understood: that we are endowed with rights and dignity not from the state but from our Creator.  If only and only if, we get this foundational principle right will we have a state that serves the people and not the other way around.

From education that respects parents’ role in the instruction of their children, to immigration policy that treats Latino immigrants the way we would want the American immigrants in our own families to have been treated, to honest money that empowers the American people and not just the American government – this one principle underlies all of our APP efforts.

When it comes to education policy, our insistence on the human person as the end of a just society rather than just a means of achieving an elite vision of progress is engendering an outpouring of support from the American people.  Our vision resonates with an American people eager to elevate, not debase, our political debate.

For a healthy desire to shape the next generation, when unduly concentrated in the hands of policy makers, can become something very undesirable.   Continue Reading