Is the Fed's Debt-Buying Unconstitutional?
(Fox Business) -- By Elizabeth MacDonald --
Is the Federal Reserve violating the U.S. Constitution’s separation of powers with its new purchases of $600 billion worth of U.S. Treasuries? Is the Fed engaging in an unconstitutional monetization of the U.S. Congress' out of control spending spree that is really a bridge loan to fiscal insanity?...
...Germany, China, Russia and Brazil are attacking the Fed’s move. President Barack Obama is now defending the Fed in his overseas trip to India. Former Republican vice presidential candidate Sarah Palin demanded that the Fed "cease and desist" on its bond purchases. Wall Street experts are now starting to call the Fed's moves an end run around the legislature.
And even Fed chairman Bernanke has criticized such extracurricular activity on the part of central banks in the past.
Watching closely in the wings are the Congressmen who want a full-fledged audit of the Fed, including Rep. Ron Paul (R-Texas), who said he will push to examine the Federal Reserve’s monetary policy decisions if he takes control of the Congressional subcommittee that oversees the central bank, as expected, in January.
Last week, the Federal Reserve announced it plans to buy more U.S. Treasury notes and bonds at a massive clip, $600 billion, between now and the end of June in a bid to spur economic demand, lower the jobless rate and resuscitate a still fragile U.S. economy.
Already, from December 2008 through this past March, the Federal Reserve bought about $1.6 trillion of government debt and mortgage-backed securities to stem the economy’s free fall.
Federal Reserve Act Sanctions Such Purchases
Although Article I of the Constitution specifically gives Congress the power to "borrow," "coin" and "regulate" money, a little understood section of the Federal Reserve Act, section 14(b)(1), does let the Fed buy Treasuries in the open market — and under the Act the central bank can buy foreign debt, too. But that act, put in place in the early part of the 20th century, was meant for smaller bore purchases to help the government build bridges and roads--not the massive intervention planned now...MORE...LINK
Comment by "Chris Moore" on The Pale Male Paradox: How White Men Achieve Most and Are Vilified Worst, by Tobias Langdon - And it’s natural that whiteness would be most vilified precisely because it’s most valuable in maintaining the modern world and western hegemony. One rea...
1 day ago