The Young Americans for Liberty at USF petition to audit the Fed.

Here at the University of South Florida, we did exactly what Senator Rand Paul asked us to do at CPAC:  Ask our Senators to co-sponsor his bill to audit the Federal Reserve. To begin our campaign to audit the Federal Reserve we wrote a formal letter to our Senator Marco Rubio. It said:

Dear Senator Rubio,

 We are the Young American’s For Liberty at the University of South Florida. We would like to congratulate you on your victory, and wish you great success while in Washington. There is one thing that we would like you to do immediately, and that is please co-sponsor Rand Paul’s bill to audit the Federal Reserve. Senators Jim Demint from South Carolina and David Vitter from Louisiana have both already agreed to co-sponsor the bill. We strongly believe it is both necessary and the right thing to do.

Every active member who comes to meetings signed it, which was about 15 people. We made up individual requests, and just changed it to say that: “I am a student at USF” and in those there was no congratulations. We ran a tabling event and gathered about 40 signatures that day. Some students were very skeptical, and appeared to be turned off by the names on the petition. The president of USF YAL, Byron Longworth, went to the college Republicans and got all 10 of them to sign. The Historian, Mike Hamlin, went to the 912 Group, and gathered another 10 signatures. All of the letters will arrive to his office in Washington D.C. Wish us luck!

The Fed's Increased Efforts to Hide Bailout Records

On Friday, Federal Reserve chairman Ben Bernanke gave a speech claiming that the economy is finally headed on the right track. He stated at the Federal Reserve Bank of Kansas City’s annual economic symposium that "despite this recent slowing, however, it is reasonable to expect some pickup in growth in 2011 and in subsequent years."

Not so fast. It has become apparent that Ben Bernanke’s economic forecasts are rarely ever correct. Here are just a few quotes showing Ben Bernanke’s oblivion to the looming housing crisis from 2005 to 2007:

CNBC announcer Maria Bartiromo, July 2005: We have so many economists coming on our air and saying oh this is a [housing] bubble and it’s going to burst and this is going to be a real issue for the economy. Some say it could even create a recession at some point. What is the worst case scenario?

Ben Bernanke: I guess I don’t buy your premise. It’s a pretty unlikely possibility… I don’t think it’s going to drive the economy too far from its full employment path though…I’m hopeful and I’m confident in fact that the bank regulators will pay close attention to the kind of loans that are being made and making sure underwriting is done right.

END THE FED!

David Frum's Critique Is Far From Sound

In his weekly CNN column, David Frum argues that "Ron Paul's money plan is far from golden," but makes a lot of mistakes in his analysis.

He uses the same tired, old, and refuted Keynesian argument that a free monetary system based on gold currency is too inflexible. He argues the Great Depression happened because the gold standard prevented the government from being able to expand the monetary supply to get us out of the economic recession.

His prescription for avoiding the Great Depression is the Keynesian idea that the Federal Reserve should print up money out of nothing to extend credit to the government (by purchasing Treasury bonds), and that the government could then ramp up spending to stimulate the economy. Frum argues that this could not occur in 1929 because of the gold standard, and the economic contraction slipped into a full-blown depression without government stimulus.

Frum believes, like the defunct Keynes, that a government-sponsored central banking system can ease busts by expanding the money supply, and then take the excess money back out during booms when the growing economy can safely absorb the monetary contraction. This necessarily assumes that you won't have high inflation during an economic recession.