In the speech by Dallas Fed president Richard Fisher thatI discussed earlier today, Fisher delivered a stinging rebuke to Ron Paul almost calling the Congressman out by name.
Fisher's contention is that Fed critics are over-emphasizing the importance of monetary policy. His argument is addressed to those who think the Fed should be held accountable for the weakness of our so-called recovery and those who are worried that the Fed is debasing our currency.
"But here is the essential fact I want to emphasize and have you think about today: The Fed could not monetize the debt if the debt were not being created by Congress in the first place.
The Fed does not create government debt; Congress does. Deficits and the unfunded liabilities of Medicare and Social Security are not created by the Federal Reserve; they are the legacy of Congress. The Fed does not earmark taxpayer money for pet projects in local communities that taxpayers themselves would never countenance; only the Congress does that. The Congress and administration play the dominant role in creating the regulatory environment that incentivizes or discourages job creation.
It seems to me that those lawmakers who advocate Ending the Fed might better turn their considerable talents toward ending the fiscal debacle that has for too long run amuck within their own house."
Emphasis added, of course.
As far as I know, there's only one lawmaker well-known for advocating ending the Fed and that's Ron Paul, who wrote a book called "End The Fed."
This, as far as I can tell, is the first time any Fed president has addressed Ron Paul's arguments so directly and spontaneously. (Obviously, not counting answering or dodging questions from Paul himself during monetary policy hearings on Capitol Hill.)
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