Ron Paul Announces Subcommittee Hearing on the Federal Reserve’s Impact on Unemployment




Domestic Monetary Policy and Technology Subcommittee Chairman Ron Paul announced today the Subcommittee will meet for a hearing to examine the impact of Federal Reserve policies on job creation and the unemployment rate. The hearing will be held on Wednesday, February 9th at 10 am in room 2128 Rayburn.

Subcommittee Chairman Paul said, “I’m very pleased to hold our first subcommittee hearing in the new Congress on a topic that could not be more critical, namely unemployment. Despite enormous amounts of monetary and credit expansion by the Federal Reserve in recent years, the nation’s unemployment picture remains bleak. While many focus on the impact of fiscal policies on employment, the effect of monetary policy often goes unexamined. In my view we are now experiencing the bust that inevitably results from the misallocation of capital and human resources in a period of artificially cheap credit. It is important to understand the Federal Reserve’s role in creating today’s unemployment crisis, while also highlighting that high unemployment and low economic growth can persist even in the face of tremendous monetary inflation.”

The Federal Reserve has taken unprecedented action to provide liquidity to financial markets and some U.S. corporations; however, unemployment remains above 9 percent. The hearing, entitled Can Monetary Policy Really Create Jobs?, will focus on the Fed’s recent actions, the likelihood those actions will reduce unemployment, and the critical role of the private sector in job creation.

While the Obama administration and Democrats in Congress believe increased government spending will improve the nation’s economy, Republicans on the Financial Services Committee know economic growth depends on providing the private sector, especially small businesses, with the certainty they need to create jobs. The Fed’s policies, as well as the Obama administration’s unsustainable debt and spending, continue to prevent small business owners from growing and hiring because of continued uncertainty over new taxes, higher interest rates, and the expanding role of government in the economy.

On November 3, 2010, the Federal Reserve announced that it planned to purchase $600 billion in long-term Treasuries (dubbed “QE2”). This is the second time since the 2008 financial crisis that the Federal Reserve has engaged in quantitative easing. The latest round of quantitative easing, along with the Fed’s action to bailout financial companies, has added trillions of dollars to the government balance sheet.

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6 Comments:

  1. an analysis of how the $8.4 trillion from the auctions of T-securities becomes profit for the Fed, all off of the books, is posted as RIP OFF BY THE FEDERAL RESERVE at http://www.scribd.com/doc/49040689 and
    http://www.synapticsparks.info/dialog/index.php?topic=32.msg192 if it of interest.

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  2. If Mr. Paul really wanted to grill Bernacke, he would ask where the money received from the “auctions” to the Primary Dealers is entered on the ledgers. If the answer is on the account of the U.S. Treasury as claimed in BS press releases, there is NO WAY to claim such a method can cause inflation. It would be a simple transfer from the public to the government—an identical transaction as a citizen paying taxes. There is NO WAY it could expand the amount of money in circulation; i.e., cause inflation.

    The money from the auctions goes to the account of the Federal Reserve as a purchase of the T-securities owned by the Fed, but that money never shows up on any accounting records. It is pure profit.

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  3. Noncredit money can guarantee rapid growth, full employment, without inflation.
    Biagio Bossone, former executive director of World Bank and IMF, said to Summit G-20: “We propose a noncredit money system, where money creation is separated from lending”.
    Noncredit money as a gift is the only real money. Noncredit money as a gift whose cost is zero can measure and buy real cost and real price. Credit money whose cost is debt cannot measure and buy real costs and real prices. Credit money as a debt transforms real cost and real price in nominal cost and nominal price. Nominal cost (price) = real cost (price) + debt.
    Credit money as a debt is never sufficient. Therefore inflation and economic crisis. Noncredit money as a gift is ever sufficient.
    Noncredit money as a gift is the necessary additional quantity of money in circulation (dM) as a percentage (k) of existing quantity of money in circulation (M). dM = kM ; k = (supply – demand)/demand ; k = 5% e.g.
    If noncredit money is emitted as a gift according to the cited formula, inflation cannot exist. Taxes and debts are annulled for the amount of noncredit money. The consumers pay less and producers get more then today, in the order of credit money. All get the gift from noncredit money. The source of noncredit money is the growth of economic rationality. Noncredit money monetizes progress of mankind. There is both national and world noncredit money. We must create both national and world order of noncredit money.
    Noncredit money demands new system of national account. They are:
    GDP = P ; COST = C ; INCOME = I ; (P/C)P = I ;
    INCOME – COST = NONCREDIT MONEY ;
    INCOME – GDP = SURPLUS OF CONSUMERS ;
    GDP – COST = SURPLUS OF PRODUCERS (profits) ;
    INCOME is incomes from costs plus incomes from noncredit money.

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    • Stojin,

      I question this “gift” money notion for some obvious reasons.
      1. Is there a limit to this gifting?
      2. who is the arbitor of the gifting? Government?
      3. how is the gift money received?
      tax refunds? unsecured (credit free) loans?
      4. You say “emitted” is how money is given out? Please explain more.
      5. the “k = 5%” appears to be a static growth figure. Is this a number equal to population growth, GDP growth or some other factor.
      6. What about Mal-Investments? who suffers the consequence when Government fosters and is directly responsible for bad monetary policy?

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  4. Seriously???

    Does the FED’s really give a flip about unemployment??

    Watch this link

    http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html

    After your blood pressure returns to normal, ask yourself

    Is Unemployment even worth the time

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  5. Get them! And, please, don’t let up….MAke Bernanke squirm like the pathetic fish he is….and then go after Geitner…

    Teach these fools about the beauty of free market capitalism…and if they do not learn, expose them for the mental midgets they really are…

    Soon the country and the world will learn about Ron Paul and freedom…the peaceful, yet inevitably successful revolution is upon us…freedom lovers will prevail…

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