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Sen. Rand Paul, R-Ky., said in an interview Tuesday that he would support eliminating the Federal Reserve System—provided the federal government stops deficit spending and adopts a balanced budget.
Paul, a fiscal hawk and the son of former U.S. Rep. Ron Paul—an outspoken critic of the Fed—doesn’t see that condition being met anytime soon. “I see the opposite,” he said, noting that many Republicans who once expressed concern over deficits during the Biden administration now “seem to care less about deficits under Trump.”
“I frankly think if Congress weren’t running deficits you could do without a Fed,” Paul said. He added that some sort of “clearinghouse” would still be necessary, suggesting that the free market would eventually “fill that space.”
Paul argued that interest rates should be governed by market forces rather than the central bank. “Interest rates are a universal price,” he said, calling them “the most prolific price in all of the economy.”
He criticized bipartisan calls for the Fed to cut rates, likening them to demanding lower meat prices from the president. “Most people would say that’s nonsensical,” Paul said. “But for some reason even conservatives sort of lose their mind when it comes to interest rates.”
“What we want is a Federal Reserve that’s less involved with manipulating interest rates,” he added.
Calling the Fed “likely no more powerful and secretive organization in all of government,” Paul is backing legislation that would require the Comptroller General of the United States to audit the Federal Reserve’s board of governors and regional banks.
He is also sponsoring the “End the Fed’s Big Bank Bailout Act,” which has drawn support from Sen. Bernie Sanders, I-Vt. The bill states: “No Federal Reserve Bank may pay earnings on balances maintained at a Federal Reserve Bank by or on behalf of a depository institution.”
