US Lawmaker Introduces Bill To Fade Off Federal Reserve

United States Senator Mike Lee is pushing to abolish the Federal Reserve. He just showcased his seriousness by introducing the Abolition Act.

The Federal Reserve Bags Criticisms

The legislation is targeting the dissolution of the Board of Governors of the Federal Reserve System and the institution itself. It would also repeal the 1913 Federal Reserve Act, which established the System. Representative Thomas Massie (R-KY) is charged with leading the companion bill in the House of Representatives.

Criticizing the Fed, Sen. Lee stated that the bank has failed in discharging its responsibility. Rather, the bank contributed to financial instability that has befallen many Americans in recent times, per the senator’s statement. 

“The Federal Reserve has overstepped and repeatedly failed to achieve its mandate and become an economic manipulator that has directly contributed to the financial instability many Americans face today,” said Sen. Lee. 

He is therefore focused on salvaging the situation by introducing the Abolition Act. “This legislation aims to protect our economic future by dismantling a system that enables unchecked government spending, the monetization of federal debt that fuels it, and widespread economic disruption. It’s time to end the Fed.”

The Massive Loan to Treasury Department

Rep. Massie supported Lee’s stance, citing that frequent inflation has successfully impacted negatively on several Americans.

For more context, Massie recalled the action taken by the Federal Reserve in 2020 when the Covid-19 pandemic hit the world. The Federal Reserve allegedly generated trillions of dollars out of nowhere. Notably, it ended up giving this funds to the Treasury Department as a loan.

This ‘generous’ move was aimed at enabling unprecedented deficit spending but was also a means for the Fed to monetize the fund (debt). Unfortunately, the move triggered the devaluation of the U.S. dollar and facilitated free money policies. These have played a major role in the high inflation that the country is currently facing. 

Noteworthy, the Federal Reserve is meeting on June 12 and anticipation is building already in the financial sector. While some financial experts have stated that there would be no rate cut from the Fed this year, many investors are still expecting rate cuts from the bank. Their  expectation is fueled by data indicating moderating U.S. inflation and a weaker jobs market.

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