Congress Can Restore the Integrity of the Dollar

"All government agencies try to maximize power and minimize accountability, but the Federal Reserve is in a league of its own. What began as a quasi-public clearinghouse with the limited function of stopping bank runs has evolved into a monetary-regulatory behemoth. Its sphere of influence has grown despite its failures, of which 40-year-high inflation is the most recent but by no means the worst.

Constitutionally, the Fed answers to Congress. It’s time for legislators to take back the reins. Three bills recently filed by congressional Republicans – the Gold Reserve Transparency Act of 2021, the Price Stability Act of 2022 and a yet-to-be titled act, H.R. 9157, linking the dollar to gold – can bring the Fed to heel. All Republicans and moderate Democrats should consider them carefully. ...

Our de facto experiment with Modern Monetary Theory has subjected millions of Americans to crippling price hikes. While inflation appears to be cooling down, prices are still rising more than three times as fast as the Fed’s official goal. ...

Rep. French Hill’s (R-Ark.) Price Stability Act is a simple reform with far-reaching implications. As the bill’s title suggests, it would strike the “full employment” plank from the Fed’s mandate. The central bank would aim for price stability alone. ...

The other two bills, sponsored by Rep. Alexander Mooney (R-W.V.), would bind the Fed’s hands even tighter. ... Rep. Mooney’s first bill would ascertain just how much gold the federal government, including the Fed, owns. ...

Regular gold audits are an important stepping-stone to the second bill’s goal: redefining the dollar in terms of gold. The text of the bill rightly asserts that the American money supply should be “controlled by the market not the government.” By reintroducing a gold-backed dollar, we can get the Fed out of the business of managing the money supply. ...

The historical record is clear: Gold-backed money is fully capable of delivering short-run stability and long-run prosperity. The Fed can’t. ...

The Fed is the chief culprit behind the enrichment of Wall Street at the expense of Main Street. And with inflation persisting at painful levels, citizens will demand relief from both parties’ politicians. Reining in the Fed has always been good economics; now it’s good politics, too.

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