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An earlier and extended version of this essay was published in the New York Sun.
The Federal Reserve is a fundamental problem for the constitutional order of the American Republic. How can the central bank unilaterally impose permanent inflation on the country without legislative debate or approval?
The nature of money and the stability of its value is an essential political and social question. William Jennings Bryan famously proclaimed, “You shall not crucify mankind upon a cross of gold!” On the other hand, we may proclaim, “You shall not drown mankind in a flood of paper money!” Who gets to choose between inflationist money and sound money?
Not the Fed by itself. Regulating the value of the money and deciding whether it should be sound and stable, or perpetually depreciating, and if so, at what rate, are profoundly important questions of a legislative nature requiring the action of Congress.
Congress can legislatively cancel the 2% inflation target announced by the Fed until the Congress has approved that or some other guidance. I would recommend stable prices as the guiding principle.
Our elected representatives need to control the powerful and dangerous Fed by using the checks and balances of our constitutional republic.
