August 5, 2009
Five Futures for the Audit the Fed Bill
By Jim Babka

Quote of the Day: "The purpose of a government investigatory commission is to place blame where it does the least harm politically." -- Paul Craig Roberts

Subject: Five Futures for the Audit the FED bill

Yesterday we learned that we must be brutally realistic about our situation, while remaining confident of ultimate victory, but without setting our hearts on a specific outcome by a specific date. Otherwise, we'll be vulnerable to depression and defeat.

This is true for our overall effort, and for specific projects too, like Congressman Ron Paul's Audit the FED bill.

Today, as promised, I want to be realistic about the prospects for the Audit the FED bill, by exploring five possible outcomes . . .

Outcome #1: The audit is ignored.

The FED is a complex operation, and the audit will reflect that. There may be no soundbites that the media and the public can understand. The audit report may simply be ignored, and then forgotten.

Outcome #2: The FED gets a passing grade.

We can't guarantee that the audit will tell us what we want, or that the auditors will even focus on the things we think are important. The audit will most likely be conducted by establishment insiders, not by people like us. The result could be the exact opposite of what we expect.

Outcome #3: The audit reports bad things, but nothing is done about it.

We think this is the most likely result. In the 1980s the Grace Commission found massive examples of government waste and fraud, but nothing was ever done about it. Instead, the problem just got worse. People may pay attention to the audit, just as they did the Grace Commission, but that doesn't mean real change will happen.

Outcome #4: The auditors report big problems, and Congress decides to fix the FED.

This may sound like the result we want, but it could be the worst outcome. We want to end the FED, not have Congress micro-manage it.

Imagine what would happen if money creation was a partisan political power. Imagine the consequences if a single branch of government, Congress, could both spend money, and create it.

Have you ever watched a Financial Services Committee hearings on C-Span? It's frightening. I hate the FED, but Lord, please, don't let these people control our money supply!

Outcome #5: The auditors report horrifying things, and Congress decides to close the FED.

This is what we want, but it's the least likely result. This outcome would only happen if there was a huge army pressuring Congress to make it happen. 

That's always the bottom line. Unless you have a huge army you're not going to get what you want.

The audit may give us a lot of ammunition, but we're still going to need an army of activists to keep firing the intellectual bullets. In addition . . .

If we really want to end the inflation tax, and the cycle of booms and busts caused by the Federal Reserve's counterfeiting, then we're going to need a rational plan for ending the FED in an orderly manner. We think the best way to do that is to foster the birth of a free market money system.

Once such a system is in place, competing with Federal Reserve Notes, closing the FED will become much easier. 

Congressman Paul actually provided a plan for doing this, long before he introduced the Audit the FED bill. His plan had three parts . . .

* The 15-word "Honest Money Act" would repeal the 41-word legal tender law, which gives the Federal Reserve a monopoly over the money supply. This would allow you to use forms of money other than Federal Reserve Notes.

* The 104-word "Free Competition in Currency Act" would repeal the 69 words of Title 18 Section 489 of the U.S. Code, which gives the United States government a monopoly over the creation of coins for use as currency.

* The 193-word "Tax-Free Gold Act" would prohibit federal and state taxes on precious metal coins and bullion. This would allow you to make transactions in precious metals without paying a tax each time.
Each of these bills -- collectively, we call them the "Honest Money bills" -- was introduced in the last session of Congress by Representative Ron Paul. They were supposed to be combined into one bill and reintroduced in this session. For some reason that hasn't happened yet, but it needs to happen if we're going to have any realistic chance of ending the FED. 

First, please send a message to your Representative and Senators in support of these bills using's campaign to End the Inflation Tax.

Second, please call Congressman Ron Paul's office and ask when they plan to reintroduce these bills, and if they might consider combining them into one bill. Here's the phone number: (202) 225-2831

Remember . . .

* We must be realistic about our situation, while remaining confident of ultimate victory, but without setting our hearts on a specific outcome by a specific date. Otherwise, we'll be vulnerable to depression and defeat.
* The Audit the FED bill may be a lever we can use, but we'll still need a huge army, and proposals like the aforementioned Honest Money bills, to get what we really want.

Now go forth and pressure Congress, and thank you for being a part of the growing Downsize DC Army.

Jim Babka
President, Inc.

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