With the prospect of the Senate being controlled by Republicans (dependent on the results of the January 5 Georgia runoff elections), left-wing think tank New Consensus co-founder Demond Drummer is proposing Joe Biden use the Federal Reserve to sidestep Congress to “build back better,” reports The Hill.
“The Federal Reserve is America's development bank, so we should use it to develop America,” Drummer said, adding “The Federal Reserve Act really empowers the Federal Reserve system to do anything that it takes to rebuild and stabilize our economy."
“No matter what happens in Georgia whether or not ... future President Biden has a cooperative Senate, there is nothing stopping the Biden-Harris administration from financing its agenda to build back better,” he continued.
Unfortunately, Demond is on to something here. Launching spending directly through the Federal Reserve could be a loophole to big-spending. And it is possible that the Federal Reserve led by Jay Powell with Janet Yellen as Treasury Secretary could go along with such an initiative.
As Murray Rothbard wrote in The Mystery of Banking in 1983:
[U]nder the Monetary Control Act of 1980, the Fed now has unlimited power to buy any asset it wishes and up to any amount—whether it be corporate stocks, bonds, or foreign currency. But until now virtually the only asset the Fed has systematically bought and sold has been U.S. government securities.
The evil Act was signed into law by President Jimmy Carter on March 31, 1980. Now, the AOC socialists want to take advantage of it, to gain more government control over the economy.
This is could be one of the most diabolical schemes to come out of the socialist circling around the Biden administration.
New Consensus is led by the socialists Drummer, Rep. Alexandria Ocasio-Cortez’s (D-N.Y.) former chief of staff Saikat Chakrabarti and Justice Democrats’ co-founder Zack Exley.
-RW
The full title of the act is: The Depository Institutions Deregulation and Monetary Control Act of 1980. The only significant deregulation was the lifting of interest rate limits on savings accounts in response to the rapidly increasing inflation. Rothbard was correct, the Act gave the FED much more power over more financial institutions and empowered the FED to acquire any asset they chose. I analyzed the Act for a class I taught for the American Institute of Banking and warned of the inflationary dangers but few paid any attention. Most bankers focused on the allowance for increased interest rates to depositors and applauded the relief. But the truth was it made banking more monopolistic. Less responsive to the market and banking's potential customers and more responsive to politicians, bureaucrats and special interests. The series of financial crises and recessions the economy has suffered beginning in 1988 is testament to the failure of this Act and the FED in maintaining a sound monetary system. However, it has been quite successful at increasing the power of the FED and the wealth of the politicians, bureaucrats and special interest groups.
ReplyDeleteWow! Thanks for the insight.
DeleteCentral banks are more dangerous to the health of a nation than standing armies. Who said that?
ReplyDeleteAnyway, you know Sidney Powell submitted stuff to GA and MI. The media is ignoring it of course.