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Economists Attack Fed in Ron Paul's Panel


Economists took their turns encouraging and attacking the policies of money supply managers of the U.S. Federal Reserve System on Wednesday, as the nation faces 9 percent unemployment, slow economic growth and rising federal debt and deficits.

Rep. Ron Paul, the Chair of Domestic Monetary Policy and Technology subcommittee in the House Committee on Financial Services has been a long-time critic of the Fed. He has previously called for legislation the first-ever audit of the institution to allow for more transparency in its operations.

The proposal has met with resistance by Fed Chief Ben Bernanke who said in a rare question and answer session last week that the central bank's decision-making should be independent of "short-term political considerations" that would eventually lead to a Congressional evaluation about whether the Fed was making the right decisions. He called the system's independence "a fundamental bedrock principal of central banking."

Wednesday's hearing was entitled "Can Monetary Policy Create Jobs?"

The Fed - whose decision-making board of seven members has been appointed by U.S. presidents and confirmed by the Senate over the years - has bought $2.3 trillion in assets from banks and other financial institutions over the past three years. The policy, known as quantitative easing, has made purchases of U.S. Treasuries and mortgage backed securities in two rounds so far - soon after the latest financial crisis began, and late last year.


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