The Federal Reserve
The economical flush down the toilet had the whole nation pointing fingers at each other to whose fault it was, which sooner or later ended up pointing to the Federal Reserve Bank system. The way quantitative easing (QE) was handled by the Federal Reserve planted a seed of doubt in the welfare of the economy, with the almost to be second Great Depression. Convincing articles such as Financial Innovation and the Fed, The Case for Auditing the Federal Reserve Bank Is Obvious, and Fed Under Fire have been written towards this the topic of quantitative easing by influential authors in respect to how the bank decisions should be treated by the majority of the population.
Arnold Kling, a scholar for the Cato Institute, explained that the Federal Reserve has importantly changed the procedures and goals it had for a long time. Kling is pushing for an audit of the Fed to help him gain a clearer picture in understanding why QE is used the way it is. The Federal Reserve has "more than doubled its balance sheet, paid interest to banks on reserves held as deposits with the fed...invested in assets that expose taxpayers to large losses" (Kling). Now, with that much money being on stake, it seems like the best idea would be to manuscript each and every step taken by the Fed. However, there seems to be a lot of opposition towards the audit bill in Congress, so it might be a harder goal to achieve than originally planned. In Kling's article, it states the audit opponents' concern of political pressure influencing the bank, knowing that the larger question at hand is its change from the standard procedures. Government Accountability Office (GAO) is a bodily organization that undertakes investigations for the Congress, the case of auditing being one of them; it has the authority to conduct operations and functions of the Federal Reserve. The Congress also "recently granted the GAO new authority to...
Cited: "Fed Under Fire." Economist. 15 Nov. 2010. 18-21. Academic Search Premier. Web. 2 Jan. 2012.
Kling, Arnold. “The Case for Auditing the Federal Reserve Bank Is Obvious.” USA Today Magazine, Jul 2010: 16. Academic Search Premier. Web. 2 Jan. 2012.
Stern, Gary H. "Financial Innovation And The Fed." Region. June 2007: 2-4. Academic Search Premier. Web. 2 Jan. 2012
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