Speeches And Statements

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

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

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