A hearing that is sure to spark a lot of controversy and debate will be held today at 10 am EDT, by the Domestic Monetary Policy Subcommittee, chaired by presidential candidate Ron Paul. As noted, "The hearing will explore the fundamental role that U.S. government debt plays in the monetary system; the use of Treasury debt by the Federal Reserve in conducting monetary policy; and the troubling reliance of Congress on the Fed to print money to facilitate deficit spending." Alas, there will be no Fed members testifying at the hearing, instead we will hear from Dr. Richard Ebeling, Professor of Economics, Northwood University, Bert Ely, Ely & Company, Inc., and Dr. Matthew J. Slaughter, Associate Dean, Tuck School of Business, Dartmouth College.
As usual Ron Paul's statement cuts right to the chase:
“The national debt has exploded by more than 60 percent over the past four years, and it looks like Congress will be asked to approve another $2 trillion increase for the next year,” Subcommittee Chairman Paul stated. “On top of trillions of dollars in bailouts, the American people will not stand for this continuing fiscal profligacy. This is why it is so important to understand the relationship between monetary policy and the national debt. Foreign governments cannot continue to purchase unlimited amounts of U.S. debt. If the federal government cannot cut spending and bring the budget back into balance, the Fed undoubtedly will be forced to simply monetize trillions of dollars in Treasury debt, which is nothing more than a stealth form of default. That devaluation of the dollar will lead to such high inflation that QE2 and its effects will look like a drop in the bucket in comparison.”
The webcast should be available at the link below: