Missouri's 7th District, U.S. House of Representatives




Congressional Issues 2006
The Limits of Monetary Policy

In the next Two Years, Congress should:

  Long-term Goals:
  • uphold its constitutional duty to maintain the purchasing power of the dollar by enacting legislation that makes long-run price stability the primary objective of Federal Reserve monetary policy;
  • recognize that the Fed cannot fine-tune the real economy but can achieve monetary stability by following a rule that confines nominal growth of gross domestic product to a noninflationary path;
  • recognize that all prices should naturally be going down, and hold the Fed accountable for achieving zero expected inflation over a reasonable time frame;
  • pass the Honest Money Act.
  • abolish the Exchange Stabilization Fund, since the Fed’s role is to achieve zero inflation, not to stabilize the foreign exchange value of the dollar by intervening in the foreign exchange market; and
  • offer no resistance to the emergence of digital currency and other substitutes for Federal Reserve notes, so that free-market forces can help shape the future of monetary institutions.
A Guide to Digital Cash Articles

The Limits of Monetary Policy 

An Overview

The Revolution: A Manifesto by Ron Paul, ch. 6 (audiobook)
Gold, Peace, and Prosperity (.pdf) by Ron Paul; also available in mp3 audio
"Money, Banking, and the Federal Reserve" (documentary, via Google Video)
What Has Government Done to Our Money? by Murray N. Rothbard
The Case for a 100 Percent Gold Dollar by Murray N. Rothbard; a new edition of What Has Government Done to Our Money containing      this work can be purchased here. (The two are also available on mp3 audio here.)
The Case for Gold by Ron Paul and Lewis Lehrman
The Gold Standard: Perspectives in the Austrian School, ed. Llewellyn H. Rockwell, Jr. (online in .pdf here)
A History of Money and Banking in the United States from the Colonial Period to World War II by Murray N. Rothbard;
     online here (.pdf)
The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin
"The Myth of the 'Independent' Fed" by Thomas J. DiLorenzo
"Did Greenspan Deserve Support for Another Term?" (.pdf) by Joseph T. Salerno (mp3 audio)
"The Path to Sound Money" (mp3 audio) by George Reisman
"The Economics of Inflation" (mp3 audio) by George Reisman
The Case Against the Fed by Murray N. Rothbard (online here; free audiobook here)
The Business Cycle

What makes the economy experience periodic booms and busts? Contrary to what Karl Marx claimed, these are not an inevitable feature of a market economy. Economist F.A. Hayek won the Nobel Prize in economics for showing how central banking (the Federal Reserve System in the American case) and its manipulation of the interest rate initiates unsustainable booms that lead inevitably to a bust. This is known as the Austrian theory of the business (or trade) cycle, and it's the subject of this section.
The Austrian Theory of the Trade Cycle and Other Essays (online here; free audiobook here). The ideal place to start on this subject.      This short book consists of short essays on Austrian business cycle theory. No prior knowledge is necessary.
"Business Cycle Primer" by Llewellyn H. Rockwell, Jr.
"Sound Money and the Business Cycle" by John P. Cochran
"Who Predicted the Bubble? Who Predicted the Crash?" (.pdf) by Mark Thornton
"Mises vs. Fisher on Money, Method, and Prediction: The Case of the Great Depression" (.pdf) by Mark Thornton
"Predicting Booms and Busts" (mp3 audio) by Mark Thornton
Banking and the Business Cycle (mp3 audio) by Joseph T. Salerno
America's Great Depression, 5th ed. (online in here, and in .pdf here) by Murray N. Rothbard
What About Deflation?

Because the possibility of "deflation" is so often raised as an objection to a commodity standard, we include a separate section of articles and lectures refuting this specific claim. Much of the material in this section is for the advanced student.
"Deflation and Depression: Where's the Link?" by Joseph T. Salerno
"Apoplithorismosphobia" (.pdf) by Mark Thornton. (Thornton coined the term to refer to the fear of deflation.) Thornton speaks on this      topic in this mp3 file
"An Austrian Taxonomy of Deflation — With Applications to the U.S." (.pdf) by Joseph T. Salerno
"Deflation and Japan Revisited" (.pdf) by Richard C.B. Johnsson
     Audio (in mp3 audio):
"On Deflation" by Joseph T. Salerno
"The Economics of Deflation" by Jörg Guido Hülsmann
"Deflation and Liberty" by Jörg Guido Hülsmann
"The Gold Standard in Theory and in Myth" by Joseph T. Salerno


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