It is no secret that the Federal Reserve\u2019s unchecked printing press causes recessions and increases income inequality. Allowing the Fed to inflate our money supply will artificially keep interests rates low, but at what cost? Their acts can no longer go unchecked, which is why I am proud to carry forth my father\u2019s original \u2018Audit the Fed\u2019 legislation, which will receive a vote in the Senate in early January.<\/p>\n
In 2009, Senator Cruz drafted a legal brief praising President Obama\u2019s American Recovery and Reinvestment Act, a stimulus bill that increased deficit spending by over $800 billion. In the brief, Senator Cruz argued that the bill\u2019s handouts will \u201cdirectly impact the economy\u201d and \u201cfurther the greater purpose of economic recovery for America,”<\/p>\n
Earlier this month, Cruz then blamed the Great Recession not on the Federal Reserve\u2019s artificial lowering of interest rates, but on its failure to continue pushing them down in a timely manner. Cruz said that the Federal Reserve\u2019s decision to \u201c[shift] to a tighter monetary policy…set the stage for the financial crisis.\u201d<\/p>\n
On the campaign trail, Senator Cruz has further demonstrated his unwillingness to rein in artificial credit expansion by repeatedly calling for the Fed to follow \u201crules-based\u201d monetary policy. This means that he still wants to control the money supply in order to meet the requirements of a mandate or equation.<\/p>\n
I couldn\u2019t disagree more strongly. No true fiscal conservative should ever support the artificial lowering of interest rates\u2014not in 2008, not now, not ever. Doing so is the equivalent of signing a death warrant for our country\u2019s low income earners.<\/p>\n
Former Federal Reserve Governor Kevin Warsh refers to the Fed\u2019s easy-money policies as the reverse Robin Hood effect. \u201cIf you have access to credit\u2014if you\u2019ve got a big balance sheet\u2014the Fed has made you richer,\u201d he said in an interview. \u201cThis is a way to make the well-to-do even more well-to-do.\u201d<\/p>\n
The reason for this is simple: big banks, corporations, and government entities receive the Fed\u2019s newly-created money long before anyone else, and they bid up the prices of goods before the rest of us can get to purchasing them.<\/p>\n