My Letter In Support of HR 1207 to Congressman Perriello

Congressman Perriello,

I am contacting you in regards to HR 1207, the Federal Reserve Transparency Act. I would like to encourage you, in the interest of your constituents, to lend your support to this legislation. As a Catholic who cares about the poor, I urge you to consider the harmful effects of inflation. By creating more money out of thin air, the Federal Reserve debases the US dollar. This inflation leads to higher prices for consumer goods, which makes life much more difficult on the poor. In fact, a common characteristic of societies with runaway inflation is that the middle class gets wiped out first. Often over-looked, it is reasonable to assert that the growing gap in wealth between the middle-class and the wealthy can be attributed to the Federal Reserve and their inflationary policies. 

Inflation is immoral on many levels. First, it is quite obviously counterfeiting, which is a fraudulent act for you and me, but legitimized by the US government when the Federal Reserve wishes to do it. As a Catholic, I believe that morals are not relative. They are absolute and apply to everyone the same including the government and Mr. Bernanke. Second, inflation benefits the wealthy and politically well connected (including the Federal Reserve and the bankers themselves) at the expense of the middle class and the poor. The new money first goes to the politically well connected before overall prices increase. By the time the new money reaches the hands of the poor, the price inflation has taken hold and it becomes less affordable to live at the same standard of living. Third, inflation, which is associated with lowering the Fed Funds interest rate, is responsible for the business cycle. The Federal Reserve sets the price of money through the Fed Funds rate, which does not allow entrepreneurs to determine the correct level of currently available savings and capital accumulation. Malinvestment results creating the boom. By the time it is realized that not enough resources are available to finish these projects, there is a bust and the malinvestments must be liquidated (witness what is happening today). People like Murray Rothbard and other Austrian economists explain all this in great detail. The boom-bust business cycle is harmful to everyone, and again, it is much more detrimental to the poor. 

Worst of all, our representatives in Congress do not even currently possess the legal authority to audit the Federal Reserve. In my personal opinion, I believe individuals, including the poor, would be much better off if the Federal Reserve were abolished and sound, Constitutional money was reinstated. But it is especially outrageous that our elected officials have no control over such a powerful organization. At the very least, it must be admitted that the Federal Reserve has an enormous impact on the everyday lives of your constituents. It is your responsibility then to represent us by at least trying to find out what the Federal Reserve is doing and perhaps voice your constituents’ opinions in order to guide policy. Please contact me with any questions you might have concerning my statements. I can easily recommend many excellent sources of literature that explain the Federal Reserve’s role in the business cycle. Ron Paul has written extensively on the ill effects of inflation on the poor.