Ron Paul to Congress: End the Fed

Statement of Congressman Ron Paul
United States House of Representatives

Statement on Federal Reserve Board Abolition Act

February 3, 2009

Madame Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people.

From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts.

With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America’s exports or the low rate of savings should be enthusiastic supporters of this legislation.

Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.

Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.

In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true freemarket economy.

In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans’ standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve.

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  • longshotlouie

    Sean is arguing that if you take away his credit cards and checkbook, he will run out of money.

  • Roger Bush

    While I agree with some of what Senator Ron Paul said about the Federal Reserve, the true way to correct the problem is to abolish the Federal Reserve and for Congress to take their rightful duty as is written in the Constitution, “the power to coin money and regulate the value there of.” The central bank is a private organiation that steal from every American the sum total of what we pay in Federal Income Taxed every year just to cover the interest on the naitonal debt which they charge America. Don’t audit them, ABOLISH THEM!!!


  • Walter Sawyer

    There is a need for change, please help me get this petition on the roll. Please correct anthing wrong, I think it is pretty accrate – add a line if you would like. I need connection in all fifty states………
    Walter Sawyer 772-336-8624

    Where as the United States Government has initiated a Treaty on such destructive proportion and has put millions of their citizens out of work;

    Where as the United States Government is not following the Constitution and allowing the American people to achieve Life, Liberty and the pursue of happiness;

    Where as the United States has endangered our boarders to the South allowing illegal citizens into America, and not funding security procedures;

    Where as the United States Government is allowing foreign trucks to entered into America, inferior to out transportation safety standards;

    Where as the United States Government has the intention of making one country out of the United States, Canada and Mexico;

    I here by call for the removal of the Treaty known as NAFTA/CFTA and place into our Constitution an article which prevents the American Government from entering into such an agreement hence forth and for ever more. .

  • Alicelynn

    In the first place you have contridicted yourself. So now you’re saying the federal reserve raised interest rates 15 times in 2004 to bring down the price of oil? And who was having to pay for that? The american people!! cause we are controlled by the Federal reserve!! But wait that is to make our dollor more valuable like you say? Makes no sence to me if interest rates went up higher, we the people, have to pay it, so wheres the value in it? It Just went up 15 times in 2004! The federal reserve has all our money, why dont they, the billonaires bail anyone out instead of raising our interest rates and having us bail out the mess they created since day one! But they make it sound so pretty and have people with no common sence believe the lies the reserve conspires. Has been like that for generations. Thank God I dont have my head stuck up in hard cement. The trade deficent is bankrupting us? It’s the reserve bankrupting us. This is our point in the first place we are trying to make. The federal reserve makes up their own intreset rates and has control of our money and what and how much we, The American People are to pay! In your own words and I Quote: the federal reserve raised interest rates like 15 times in 2004: Unquote.

  • alicelynn

    If the people demanded it, show me proof dating back in the times of woodrow Wilson, because thats when it all started. He was tricked by the people when congress was on vacation and caught him vunerable. ….Wilson later expressed his regrets. I know how centeral banks were first created, if you read my prior statment ubove, you would have that knowledge yourself. Guess who makes more centeral banks? It comes from the same people who started it all in the very begining. with your money, our money and everyones elses money they got rich on. So then why doesn’t the federal reserve/your so called centeral banks bail out their own? Why do they need the Government to do clean up their mess? And for your information, I have saved my money and have several houses I have bought cash without having to put a red cent in the bank and having then banks make profit from my money. Thats how they did it in the old days. the money you earned was yours and had to pay no taxes on anything or pay a percentageto anyone. We didnt have to worry about losing our land to taxes , whom the federal reserve so brilliantly conspired. Are you not familiar with the Constitutional Rights Amendment? I suggest you read what I stated on top again and read it right. Your ancestors must have been the people who decieved Woodrow wilson and thats why ur so adament on going against what Ron Paul is doing. Hope you have your money in the fdic and they go bankrupt, remember nothing is guaranteed, not even your FDIC.
    Several months ago I heard the name of Representative Ron Paul. I actually saw him in a debate during the primaries and heard him mention something that I have heard no one else in Washington ever complain about, and that was the Federal Reserve Central Bank. Over the months I have carefully listened to his warnings and statements, and honestly, he is one of the few who is willing to actually speak out and tell the truth about what is happening with the bailout and the possible end result of such a “rescue.”

    The entire issue is perhaps the most complex, misunderstood or confusing issue in the modern history of America. Why does the government need to bail out mortgage banking institutions when the CEOs and boards saw what was coming and did nothing about it?

    Here is what I understand – simplified. During the Clinton administration the president wanted families in America, specifically lower income families, to be able to afford a home. By passing legislation they made it easier for a family to get a bank loan on a home at no money down and a low interest rate. This was a commendable idea but there was one catch. The loan was on what was called an ARM. As one man told me, “You got the loan for 2 ½ percent with all of the cost included in the loan itself. However, over a period of time, my own sons loan would go from 2 ½ percent to 8%. The idea that sold him by the lender was, that the value of his home would rise and if needed he could sell the home and make good money in the future. Suddenly, everyone was building new homes with plans to “flip” them or build for a price and make a profit on the sell. Then the unexpected happened. People could not make their house payments and the housing bubble burst.

    These loans and mortgages (ARMS) were sold to investment banks with the idea that as the interest rate rose they would make a good profit on the interest. What it seems few people were paying attention to was the fact that many of the people (into the millions) who took out a home loan did not have the money to repay the loan yet they were still provided a loan by the bank. For example, a person making $35,000 a year may have purchased a home worth $300,000 and as the interest began rising so did the monthly payment. In our community we know of about 5 couples who are in the process of losing their homes because they cannot pay the house payment. One man simply auctioned the goods in the home and told the bank, here is your $400,000 house and the debt that goes with it. As people began walking out of their homes the banks not only saw the home values drop between 3% and in some cities 20%, but they were left with a loan that was defaulted on.

    When the banks began looking at what they had in actual cash and assets verses the number of bad loans in which they were losing money, the bad loans won out. Thus, a “credit crisis” resulted. Recently, a close friend who is in real estate called me and said his banker (in Florida) contacted him with a “super investor offer.” For one million dollars to the bank he could own 400 homes at 10 cents on the dollar! When I was in Nevada on vacation we were staying in a desert hotel and a man recognized me from television. He was a real estate agent for six states. He told me of a 2 ½ million dollar home that the bank was offering at $950,000. Another home with four bedrooms, 2 car garage and a pool built for $850,000 was being offered at $240,000. In the Las Vegas area, over 20,000 homes are in foreclosure. They are being bought up by the Chinese, the Arab oil money and other foreign investors. In fact the banks are going outside of the U.S. to find foreigners to purchase the homes that Americans have built. Perhaps Americans should go back and read the Bible where it says, that if we reject the covenant and turn from God;

    • Sean

      The people demanded monetary reform because there was not enough money and too much credit… I’ve read all of that, i’ve seen zeitgeist and all those conspiracy videos. I know about all the credit crises, and many many more economic failures.. You have to realize that the economy can be brought down like that, and banking practices are VERy Very complex. The federal reserve was created as a safe haven, but it has grown into a neccesary entity since we abandoned protectionism in the seventies. It is not something we can just get rid of. You have only heard one side of this, because it cannot be contested. There is no monetary system that could be ran without a central bank when we have a service based economy. An economy that lacks liberty because of low tarrifs and domestic taxation… Thats what you should be worried about. Thats why we have to keep this monetary system. If we put up trade barriers, than we could get rid of the Federal reserve and go back to sound money.

      • Sean

        Look at that graph. In 1995 the World Trade Organization was created. A huge reason it was created was because we ran out of oil and had to started importing and relying on other countries.. Our trade deficit made the dollar weaker and made oil way too expensive, so the federal reserve raised interest rates like 15 times in 2004 to make the dollar more valuable to bring down the price of oil. They did this to try to lower our trade deficit with lower prices, bc the trade deficit is bankrupting us.

  • Sean

    “The main motivation for the third central banking system came from the Panic of 1907, which renewed demands for banking and currency reform.[2] During the last quarter of the 19th century and the beginning of the 20th century the United States economy went through a series of financial panics.[3] According to proponents of the Federal Reserve System and many economists, the previous national banking system had two main weaknesses: an “inelastic” currency; and a lack of liquidity.[3] The following year Congress enacted the Aldrich-Vreeland Act which provided for an emergency currency and established the National Monetary Commission to study banking and currency reform.” Wiki

  • Nate D

    Please try not debating with Sean. He pulls numbers and percentages out of his ass all the time. He contradicts himself every other post, and will have you running in circles by throwing off topics at you. He is here only to distract everyone from the real problem.

    Thank you for the good post Lynn and once again proving Sean’s outrages claims false. Keep posting and just ignore Sean. As you will soon find out it is impossible and frustrating to get any ideas through the head of this guy.

    • Sean

      Prove it, what is something i contradicted myself with myself?.. that percentage was pulled out of my ass. I imagine more than 90% have more common sense than you to trust banks to hold onto their money without insurance. Why don’t prove me wrong and show me ONE SINGLE shred of proof if you think i’m making false statements.. Untill you prove me wrong, your just an annoying ignorant person.