Should the federal reserve be audited?

Discussion in 'Politics, Religion, Social Issues' started by Zombie Acorn, Aug 13, 2009.

  1. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #1
    I received an email about a new site called: http://www.auditthefed.com/

    I am not a big fan of the fed to start with, but I am wondering what everyone's view in PRSI is about this. Should the fed have to give up who they have given money to or at least account for it? I would think that congress at least would want to know where all of this money is going to.

    I personally think that they should have to give up all of their information, I don't like this cloak of secrecy when we should be given transparency as to the goings on of the people who control the life blood of our country.

    This isn't a promotion for the site, but if you agree and sign the petition it will give you your congressmen who have cosponsored the bill and those who have not along with contact info. Right now there are 282 cosponsors in the house and 23 in the senate.
     
  2. thegoldenmackid macrumors 604

    thegoldenmackid

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    #2
    No. This will just be another big waste of money. The question is would the audit produce change, iThink not.

    There are numerous ways to save money much more practically. One has to do with ending a couple of wars.

    Talk is cheap.
     
  3. freeny macrumors 68020

    freeny

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    #3
    While im sure it would be a huge waste of money, i am all for oversight, and the fed is not an exception.
     
  4. Rodimus Prime macrumors G4

    Rodimus Prime

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    #4
    Honestly no because it would be a huge waste of money and it would just turn in to a political matter not one that gave a damn about the truth or what is bes for the country.

    Lets face it congressional oversight in most things turns into political matters with little regard to the truth. They would do it hear and then congress would have power to control politically the direction of the fed which it should not.

    I like the fed be separated from the political matters because they can do more what is right for the country and for for what corrupted Mr. congressman wants for his own power hungry means.
     
  5. Desertrat macrumors newbie

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    #5
    Considering that the interest-rate policies of the Fed over these last several decades have contributed greatly to the present worldwide economic debacle, I fail to see how an audit would be any sort of waste of money.

    Look in the mirror and utter the factual statement, "The Fed has been screwing around with the buying power of MY money," and see if you're still a happy camper.

    By saying that you don't care about an audit, about accountability, is the same as saying, "I don't care if my money buys less and less, year after year."

    Granted, most in Congress don't really care, beyond the politics. But they don't have to worry about buying power; they can raise their pay and perks whenever they wish--and do.

    'Rat
     
  6. designgeek macrumors 65816

    designgeek

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    #6
    Thier balance sheet is available online, that's no audit though. Fractional reserve banking was the biggest mistake of the last century. Obama's budget proves this, no matter what we do we can never catch up, we can get close but we'll keep digging this hole. The system needs to be started over, not audited.
     
  7. kavika411 macrumors 6502a

    kavika411

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    #7
    The phrase "big waste of money" is used a lot in this thread as a reason not to audit the Federal Reserve. I think both sides of the aisle would agree that "big waste of money" has n.e.v.e.r been a reason not to go forward with a government project.
     
  8. designgeek macrumors 65816

    designgeek

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    #8
    ^Raises a valid point.
     
  9. mkrishnan Moderator emeritus

    mkrishnan

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    #9
    I agree with this basic premise also. Third party auditing for companies, NPOs, and even governmental agencies is just a way of life because the security it delivers is worth it. Accounting firms can be abused (and this is a waste of money), and auditing isn't foolproof, but at a basic level the approach of external auditing has provided a lot of the safety and stability that large organizations enjoy today.

    At that level, the cost argument if it's the only reason against auditing is in danger of being akin to buying tens of thousands of dollars in aged wine and refusing to store them in an appropriate cellar because of the cost of building one. Penny wise and pound foolish when the wine goes bad.

    That being said, I'm leery of politically motivated auditing -- that is, not establishing it as a process and a practice but instead sicking auditors on an organization you don't like to try and prove something bad about them. It's called for when there's evidence of wrong-doing, but probably looking seriously at routine auditing for the Fed is better....
     
  10. rhsgolfer33 macrumors 6502a

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    #10
    How can you say that fractional reserve banking was the biggest mistake of the last century? Without fractional reserve banking it would be outrageously expensive for anyone to obtain credit and banks would have a very hard time lending. Put simply, without fractional reserve banking our economy would come to an extreme halt, economic development and expansion would occur extremely slowly, businesses would have an even harder time obtaining credit, and we probably never would have become an economic leader. Wealth creation would be very, very difficult without fractional reserve banking. Even critics, notably von Hayek, have accepted the necessity of fractional reserve banking to quick development and money creation.

    Care to elaborate on how Obama's budget illustrates that we keep digging a hole in relation to the fed? Any budget can be balanced, including Obama's. The deficit isn't due to the fed, blame partisan politics on both sides for that.

    The argument to do away with the fed from my fellow right leaning libertarians has never been a very persuasive one. Most of us claim to support economic growth and business, well the Fed and fractional reserve banking play a major role in facilitating both. Does the system have flaws? Certainly. But I suspect that without it we would have seen deeper and more frequent recessions in the last 60 years, in addition to much, much slower economic growth.

    Should we audit the Fed? Well, for one, we already do. Any additional extremely extensive audit is going to be very costly, quite difficult, and likely won't disclose anything that the general public (or congress for that matter) has any ability to interpret or understand (with American consumer debt and congressional spending the way they are I have severe doubts that anyone other than a select few have any idea how to read a simple income statement). Everyone gets in to a panic whenever there is a downturn; regulate this, abolish this, blah blah blah. I've got news for everyone, controlling (or not controlling for that matter) an economy is not an exact science, as much as everyone wants a smooth upward line when graphing economic growth, it is not ever going to happen, there are always going to be recessions, whether the Fed exists or not.
     
  11. it5five macrumors 65816

    it5five

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    #11
    Would Congress be doing the auditing?

    If so, I vote no. It would immediately become some political issue that would devolve into another petty and ridiculous screaming match that would eventually become distorted and used to drum up fear.
     
  12. rhsgolfer33 macrumors 6502a

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    #12
    That's what I wonder. Who is capable of auditing the Fed? The GAO? Well for one, they already audit the Fed, but I guess most people find those to be inadequate. So clearly we'll need another organization, outside the direct scope of the government to audit the Fed. On of the Big 4 accounting firms perhaps? That would be great, it would create a hell of a lot of jobs, but I doubt most people would find spending billions on an audit of one organization to be appropriate. Man, the pay for us accounting majors going to the Big 4 would skyrocket though, that would be great.:p
     
  13. Desertrat macrumors newbie

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    #13
    From rhsgolfer33: "How can you say that fractional reserve banking was the biggest mistake of the last century? Without fractional reserve banking it would be outrageously expensive for anyone to obtain credit and banks would have a very hard time lending."

    When interest rates are not determined by the marketplace, you wind up with the present economic situation: Rates were set way below market judgement, and the housing bubble came about. This is just the most recent example. Sadly, it's even worse than the previous go-ground of the 1970s.

    Marketplace determinations come from the accumulation of billions of economic decisions by many millions of people. There's no way that a few people can know and understand enough information to make equally informed decisions.

    The primary success of the Federal Reserve Bank system is the destruction of the purchasing power of the dollar. Since 1913, the dollar has lost 95% of its purchasing power.

    Bought any nickel coffee, lately? That's what a "cuppa" cost me, back in my younger years.

    'Rat
     
  14. Queso macrumors G4

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    #14
    At this point I'll point out that the Bank of England is audited annually, although under the current view of the UK prevalent in the US media this is probably just another sign that we're an Orwellian nightmare socialist state where grannies die in the streets...or whatever.
     
  15. pilotError macrumors 68020

    pilotError

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    #15
    Isn't the Federal reserve a non-public entity?

    Does the government have the right to even audit it?
     
  16. mkrishnan Moderator emeritus

    mkrishnan

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    #16
    At least you don't throw the old ladies into the fjords....

    As pointed out above, though, the Fed is audited now. The question is whether more thorough or more independent auditing is necessary. They also maintain independent internal auditing, of course.

    (One might almost wonder if it were not the US that were being irrationally vilified here and not the UK...)

    Anyway, what does the proposed auditing that this new bill proposes cost? I'm not quite convinced it's so dire as rhsgolfer makes it out....
     
  17. Desertrat macrumors newbie

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    #17
    Sorta guessing, I doubt it's an issue of accounting-type auditing. It's more likely to be an examination of correspondence about "deals".

    For instance: It's coming out that a recent bond sale by the Treasury was indeed fully bought, which makes it look as though foreign buyers are still buying US debt. Trouble is, a major portion of the bonds were then quickly sold back to the Fed, monetizing the debt. That sort of chicanery is highly inflationary.

    Further, since we know that Greenspan's and Bernanke's views on interest rates and the uber-low settings are strongly contributory to this present disaster, internal memos of the "What did we know, and when did we know it?" type are of interest.
     
  18. KingYaba macrumors 68040

    KingYaba

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    #18
    Hasn't stopped them in the past. :rolleyes::D Good question, though, I don't know.
     
  19. Desertrat macrumors newbie

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    #19
    And yet another little dot on the curve: In testimony before Congress, Bernanke was asked about the expenditure of a certain $500 billion. His answer? "I don't know."

    Now, maybe a half a trillion tax dollars is chump change to some, but I sorta figure all us little old taxpayers still have a few rights about knowing where our money has gone. Or is, "Aw, probably to AIG and Goldman Sacks..." good enough?

    'Rat
     
  20. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    #20
    Im all for independent auditing and research into government programs.
     
  21. hulugu macrumors 68000

    hulugu

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    #21
    I think that would be my hesitation about auditing the Federal Reserve. It's one of those things that could be worthwhile or become a political circus. In the latter case, it would be a waste of time and money.

    Yes, but that coffee was terrible. ;)
     
  22. NT1440 macrumors G4

    NT1440

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    #22
    I think it would be a mistake to do right now, but at some point it would be wonderful to make sure our money is being used right and to streamline the process for better efficiency.
     
  23. MacNut macrumors Core

    MacNut

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    #23
    In a perfect world, every dollar spent by the government would be tracked so we the people know where the money is spent. As it is now congress tacks on pet projects in the hopes that nobody finds out until after it is spent. Maybe if we followed the buck they would think twice about wasting it.
     
  24. hulugu macrumors 68000

    hulugu

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    #24
    Well, for the most part, that's readily known. Of course, there are secret budgets for agencies like the NSA, but for the most part, you can track how money is spent if you're willing to do so. The hard part is assembling all the information into a cohesive whole.

    However, the Federal Reserve appears to be a different beast.
     
  25. fivepoint macrumors 65816

    fivepoint

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    #25
    In a word... YES. Yes, we should audit the FED.

    [​IMG]
     

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