Ron Paul agrees with President Donald Trump’s comments about the Federal Reserve.
In a piece on Fox Business, Paul specifically talks about Trump’s recent comments about the Fed not knowing “what it is doing” while maintaining that it is “the most difficult problem” that the U.S. is facing today.
The former congressman described Trump’s concern about the Fed as “commendable”.
He notes the following:
Despite being created to protect the U.S. dollar and prevent economic crises, under its watch, major U.S. recessions have occurred, and Americans’ buying power has declined by a full 95 percent.
On top of that, the Fed has a bad track record of stabilizing prices, which Paul also highlights:
According to data from the Heritage Foundation, Consumer Price Index inflation in the pre-Fed years of 1790-1912 was just 0.22 percent, but between 1913-2013, it skyrocketed to 3.35 percent. So much for its goal of stabilizing prices.
Paul cites how Trump is the first president since Reagan to criticize the Federal Reserve. However, Paul believes that “calling out the central bank’s failures is one thing; acting on instinct by checking its power is quite another.”
But the question remains if Trump is willing to stop the Fed from doing more harm to the American economy. The Federal Reserve is planning to use real-time payments, which according to Paul will ensure “immediate, on-the-spot bank transfers.” The Fed claims that the U.S. needs faster payments “for the conveniences they provide, such as the ability to pay another individual on-the-spot using a mobile phone application” in order to provide “consumers, households, and businesses more flexibility in managing their money.”
Indeed, domestic banking in America is slower than other countries. However, there are several reasons for the Fed to not get involved with real-time payments. According to the Monetary Control Act, which was signed into law in 1980, the Fed can only create its own payment services if “the service is one that other providers alone cannot be expected to provide with reasonable effectiveness, scope, and equity.”
In this regard, the Fed need not step in. Venmo, Mastercard Send, and The Clearing House’s RTP system already have this function covered.
Paul insists that Trump hold the Fed’s “feet to the fire.” He encouraged him to “work with Sen. Rand Paul, R-Ky., and Rep. Thomas Massie, R-Ky., to expedite passage of their Audit the Fed legislation should the Federal Reserve decide to disobey the will of its creator – Congress – by involving itself in real-time payments.”
In Paul’s view, it is Trump that can stop the Fed’s mischief. After all, the Fed has been responsible for “rampant inflation, economic recessions, and even wealth inequality” during the course of a century.
Paul left the final piece of advice for President Trump:
While he doesn’t control monetary policy, the least the president can do is prevent the Fed from running the private marketplace amuck by disobeying orders from Congress, the very body that created it in the first place. Let’s hope he’s up for the task.