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As we attempt to recover from the economic devastation wrought by the pandemic and the government’s authoritarian response to it, restoring a sound monetary policy may not be near the top of lawmakers’ priorities -- but it should be. With record rates of deficit spending and a record-shattering Federal Reserve balance sheet, it should be no surprise that the dollar’s value is at an all time low when compared to the value of gold. None of this is setting the stage for a rapid recovery, or for robust growth thereafter.
So it is very timely that Rep. Warren Davidson (R-Ohio) has launched a Sound Money Caucus in the House last week, which he will lead along with co-Chairman Rep. Andy Barr (R-Ky.) and founding members Reps. Kevin Brady (R-Texas), Ted Budd (R-N.C), and Lee Zeldin (R-N.Y.).
In Rep. Davidson’s words:
“I’m pleased to announce the formation of the Congressional Sound Money Caucus. We already have a great core group of members who are leaders in this area, who understand how important it is for the U.S. dollar to be an enduring store of value and an efficient means of exchange. I look forward to hashing out policy solutions to address the economic distortions of monetary inflation, so that monetary and fiscal policy can help rebuild the middle class, restart the American economy, and get us on a path for sustainable growth.”
A relative handful of lawmakers have kept the flame of sound monetary policy alive since the retirement of the issue’s undisputed greatest champion in Congress, Dr. Ron Paul, in 2012. For example, his son, Senator Rand Paul, and Rep. Thomas Massie have kept the push to “Audit the Fed” alive via the Federal Reserve Transparency Act (S. 148 and H.R. 24), while Rep. Alex Mooney (R-W.V.) has become the sponsor of his bill to re-establish a gold standard for the U.S. dollar (H.R. 2558). Other important monetary policy proposals that FreedomWorks has endorsed have lain dormant for years, such as the elder Paul’s bill to allow for competing currencies (last introduced by former Rep. Paul Broun in 2013 as H.R. 77).
As the Sound Money Caucus grows, hopefully it can serve as an incubator for these sort of reforms and new ones besides, and increase the stature of monetary policy reform as an issue of importance in Congress. The production of money and the extension of government credit is, after all, another of the powers specifically granted to Congress under Article I, Section 10 of the Constitution. These obligations have largely been handed over to the Treasury Department and Federal Reserve, whose decision-makers have no direct accountability to voters.
The sooner lawmakers stop looking to the Federal Reserve to boost our economy, the sooner we can get back to the real problems of gross government overspending and its tax upon our future economic growth. After all, a dollar that continually loses value is an effective tax on all wealth, enabling the federal government to endlessly expand its own credit while diminishing wealth creation and innovation in the future.