Reigning in the Federal Reserve

Since the inception of the Federal Reserve Bank in 1913, the United States economy has experienced a cycle of “booms and busts,” periods of expansion and periods of contraction. Inconsistent monetary policy on the part of the Fed has led to both record inflation, and at times, dangerous deflation. Though these cycles persist, congress has continuously expanded the Federal Reserve’s authority to combat the very phenomena it created. The Feds current mandate, under the Federal Reserve Act instructs the bank to, “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”[1] The statutes vague language has caused rapid growth in the Federal Reserve’s powers and methods by which they regulate the economy through monetary policy. Congress should reevaluate the Feds mandate and reign in its expanded powers. To do this, Congress should enact legislative changes, mandating a single purpose: stable spending. Furthermore, Congress should restrict quantitative easing and restore accountability by allowing the Government Accountability office to conduct routine audits. Implementing these changes will reduce waste, fraud, and abuse, while creating a stable economy with more opportunity for growth. [1] “Changing the Federal Reserve’s Mandate: An Economic Analysis,” CRS Report (Congressional Research Service, 2013).