Some of the less-informed members of the Tea Party movement have argued that our current economic arrangement constitutes taxation without representation. They’re right, but not in the way they think.
Little known to the average taxpayer, the Fed is a public-private entity that not only issues the nation’s currency, but sets interest rate policy and has supervisory authority over the banking system.Its private owners, who are anything but neutral, number the largest banking and finance institutions in the country, the so-called Too Big to Fail banks.
Along with Treasury, the Fed has been instrumental in what SIGTARP Chief Barofsky has estimated has been $23 trillion of bailouts, loans, backstops and guarantees, since the financial crisis struck two years ago. To put that number in perspective, it represents almost twice the US GDP and 40% of World GDP. It also represents $75,000 for every man, woman, and child in the US.
Although not all of that money has been created or spent, much has, which means the US taxpayer now carries the responsibility for paying it back. Oddly, one might even say immorally, the Fed goes out of its way to prevent even the democratically elected representatives of the people from seeing the inner workings of that entity. The Fed—with help from the Obama White House—has lobbied to block access to information about what the taxpayer has bought, though the taxpayer is still required to pay for it, either directly in taxes or through inflation and a depreciating currency. If this is not the definition of “Taxation without Representation,” I do not know what is.
Our state’s senators, Richard Burr and Kay Hagan, went along with a minimal audit requirement, and that’s OK for a start. But we need more. Much, much more.