Let us be the first to endorse the Centennial Monetary Commission Act, which has just been introduced in the Congress. It is being advanced not by one of the so-called marginal figures but by the chairman of the Joint Economic Committee, Kevin Brady. The measure would establish a serious, bipartisan committee on monetary reform as we begin the second century under a Federal Reserve System that, in recent decades, has had an increasingly illogical dual mandate and is churning out money that is convertible by law into nothing but more fiat money.
Mr. Brady is emerging as an important figure in the monetary debate. He has not endorsed a gold standard, per se. Nor has he signed on to some of the more radical measures, such as Ron Paul’s Free Competition in Currency Act, which would end the whole system of legal tender and open the way for privately issued money to compete with government scrip. Instead, Mr. Brady has been pressing a measure called the Sound Dollar Act, which he has just reintroduced. It would, among other things, end the Fed’s dual mandate to both stabilize prices and boost employment.
Mr. Brady’s Centennial Monetary Commission Act, which is also known as H.R. 1176, is a parallel measure that would establish a commission “to examine the United States monetary policy, evaluate alternative monetary regimes and recommend a course for monetary policy going forward.” It is not a repeat of the United States Gold Commission, which was established at the start of President Reagan’s first term. That was an important body, to be sure, but it was stacked with advocates of fiat money and is today remembered primarily for its dissent, written by Congressman Ron Paul and another commission member, Lewis Lehrman, calling for a restoration of gold-based money.
Mr. Brady’s bill would establish a much more balanced and bipartisan commission, without a predisposition for or against a gold — or any other — standard. It offers a chance not only to light the way to the repair a broken monetary system but also to illuminate the danger that our reliance on fiat money is itself the cause of our long economic travail. This alone is important. Congress is consuming itself with the fiscal debate at a time when a growing number of our best economists and political leaders are coming to the view that the real problem is the fiat nature of the dollar.
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Regular readers of these columns will note that the Sun has been impatient with the idea of commissions. They are all too often a place to bury a movement for reform. What we like about Mr. Brady’s commission is, among other things, that it is tied to the centennial of the Federal Reserve. Once in a century is not too often to take a look at questions this serious. Our politicians seem to have forgotten that the enumerated power to coin money and regulate its value was delegated in the Constitution not to a central bank or the president but to the Congress, which is also the body to which the parchment granted the related power to borrow money on the credit of the United States. The one thing the recent record shows above all else is that the impetus to reform will not come from the Federal Reserve itself. It is the Congress that will have to step up, and it looks like Mr. Brady has given it the chance.