US Senator Introduces Bill to Abolish the Federal Reserve

US Senator Mike Lee has introduced legislation to dismantle the Federal Reserve system. 

The proposed “Abolish Act” aims to repeal the 1913 Federal Reserve Act, which established the central banking system in the United States.

Senator Lee, representing Utah, criticized the Federal Reserve, also known as “the Fed,” for overstepping its mandate and failing to control economic variables such as inflation and public debt. The bill has gained support from Representative Thomas Massie of Kentucky in the House of Representatives.

Senator Lee’s critique of the Federal Reserve

Senator Lee has accused the Federal Reserve of economic manipulation and failing to meet its mandate. In a statement, Lee said that the Federal Reserve has repeatedly failed to achieve its mandate and become an economic manipulator that has directly contributed to the financial instability many Americans face today. This statement echoes the sentiments of Ron Paul, a former Texas Congressman who called for ending the Fed in his 2009 book. Ron Paul’s son, Rand Paul, a current Republican senator from Kentucky, is reportedly a close ally of Lee.

Representative Massie also criticized the Federal Reserve, blaming it for the economic suffering caused by high inflation. He stated that during COVID, the Fed created trillions of dollars out of thin air and loaned them to the Treasury Department to enable unprecedented deficit spending. By monetizing the debt, the Fed devalued the dollar and enabled free money policies that caused today’s high inflation.

Federal Reserve under increased scrutiny

The Federal Reserve, tasked with managing inflation and unemployment, faces growing scrutiny from lawmakers over its handling of interest rates to control prices. Data from the US Labor Department shows that year-on-year inflation fell slightly to 3.4% in April from 3.5% a year earlier. This marks the first decline in the year-over-year figure for 2024, yet inflation remains above the Fed’s 2% target. The prices of goods and services are still higher than pre-pandemic levels, and the central bank has been raising interest rates aggressively since 2022 to curb rising prices.

Senator Lee proposes dissolving the Federal Reserve’s board of governors, retaining only the chairman to ensure a smooth transition, manage employee benefits, and handle assets and debts. The proceeds from asset liquidation would eventually be transferred to the Treasury Department.

Response to the Federal Reserve’s policies

The Federal Reserve’s actions during the COVID-19 pandemic, particularly its creation of trillions of dollars and loans to the Treasury Department, have been a focal point of criticism. Lawmakers like Senator Lee and Representative Massie argue that these policies have led to significant economic challenges, including high inflation and devaluation of the dollar.

Senator Lee’s proposed legislation is a response to what he sees as the Federal Reserve’s failure to manage the economy effectively. The “Abolish Act” seeks to dismantle the institution and transfer its responsibilities to other government entities. This proposal has sparked a debate about the role of the Federal Reserve and its impact on the economy.

The “Abolish Act” introduction highlights some lawmakers’ growing dissatisfaction with the Federal Reserve’s policies. The bill’s supporters believe ending the Fed is necessary to restore economic stability and address the issues caused by its actions during the pandemic.

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