The subcommittee, chaired by Rep. Ron Paul (R-Texas), will hear testimony from lawmakers and economists on six proposals that would reform or ultimately abolish the Fed. Paul has been a vocal proponent of eliminating the Fed and will introduce a bill this year that would do away with the central bank.
“More and more people are beginning to understand just how destructive the Federal Reserve’s monetary policy has been,” Paul said. “One hundred years is far too long for Congress to have taken a hands-off approach. The Fed continues to reward Wall Street banks while destroying the dollar’s purchasing power and driving up the cost of living for average Americans. This reckless behavior must come to an end.”
The Fed, established in 1913 following a series of bank runs, sets monetary policy and ensures the continued oversight of financial institutions. Though calls to abolish the Fed have made since the agency’s inception, the 2008 financial collapse has lead to increased vocalization by those who support the measure.
Following the 2008 meltdown, the Fed has attempted to reduce interest rates in an effort to boost the economy. Frank said that the five officials of the Fed’s Federal Open Market Committee, which sets targets for interest rates, should be replaced by four members through a congressional appropriations process.
At present, Paul said, the officials are chosen by regional Fed directors, resulting in a structure where the Fed chairman must go head-to-head with individuals whose interests do not align with the central bank’s mission to promote employment and combat inflation.