Last Thursday, the House Finance Committee, by a vote of 43-26, voted to approve an amendment to finally audit the Federal Reserve.

As Rob and I discussed in an earlier roundtable podcast, the Paul/Grayson amendment is attempting to audit the Fed, which would mean a public disclosure of all its most recent economic activity, especially what it has done with TARP funds.

Ryan Grim at The Huffington Post sums up the importance of this vote very well.

The measure, cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), authorizes the Government Accountability Office to conduct a wide-ranging audit of the Fed’s opaque deals with foreign central banks and major U.S. financial institutions. The Fed has never had a real audit in its history and little is known of what it does with the trillions of dollars at its disposal.

It may seem like a small battle that has been won, but what this vote can possible represent is the slow, but necessary, exposure of the Federal Reserve, which is one of the, if not the most, corrupt government institutions in the US.

Created in 1913, the Federal Reserve is a quasi-private bank with virtually no oversight that has the ability to control the flow of credit (through the manipulation of interest rates). By lowering interest rates, the Fed’s policies create an economy drunk on credit, and many businessess or ventures that would have never been started suddenly start popping up all over the place. When this artificial bubble pops, as it did in 2008 (and in 1929), the painful bust ensues.

This expansion of the monetary supply is essentially inflation, which is a hidden tax, directly harming the poor and middle-class the hardest. In almost 100 years, the Fed-induced inflation has caused our money to lose almost 95% of its value.

The Fed is also a tool of the schemers and central planners that always tend to gravitate towards DC. Without a central bank that can literally create money out of thin air, wars would have to be funded through direct taxation, which might cause many more Americans to grab pitchforks when handed the bill for empire. Welfare, too, becomes much easier to fund when there is no limit to the goodies that can be spread around.

The existence of a centralized bank whose strings are pulled by the government is absolutely incompatible with a free society. Karl Marx once wrote that there are two crucial things to destroying a market based economy: the levying of an income tax and the centralization of credit into state hands. As a firm defender of free markets and the sovereignty of every individual, the very existence of the Fed is an institutionalized evil that I oppose unconditionally.

So it’s no surprise then that all of the influential Beltway types are opposing this amendment. From the war-mongering “conservatives” at the Heritage Foundation to former Wall Street crooks Fed chairmen Alan Greenspan and Paul Volcker, the DC establishment is shaking.

The Paul-Grayson bill, with over 300 trans-ideological co-sponsors in the House, will hopefully be the first of the Federal Reserve’s many corrupt bricks to fall.

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Fore more of Robert’s work, please visit his Libertarian Examiner blog.

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