Contrary to the above, the GAO already has the power, and uses it, to audit the Fed. If you don't believe me, take a look at some of the actual audits. What GAO doesn't have is the power to audit monetary policy decisions. And if and when it does, political pressure on the Fed will lead to soft interest rates, stepped-up favoritism for interest groups and ultimately a blizzard of inflationary cash. And then the Ron Paul types will have the nerve to say "we told you so, we need a gold standard," notwithstanding their own central role in causing the problem.
House Financial Services Chairman Rep. Barney Frank, Massachusetts Democrat, said he expects former GOP presidential candidate Ron Paul's legislation to audit the Fed to pass out of his committee in October as part of a larger regulatory package.
Rep. Paul's, Texas Republican, bill if added to Mr. Frank's other proposed reforms could give a boost to a financial regulation package the Obama Administration wanted to pass last spring. The Fed bill has 282 co-sponsors, including every Republican member of the House and a considerable number of Democrats. The Senate's lead sponsor of the bill is Sen. Bernard Sanders, a Vermont independent and self-described socialist.
Today, the Government Accountability Office has no power to audit the Federal Reserve. Mr. Paul's bill would empower the government watchdog to do so and make their findings available to the public.
And note this nonsense from Barney Frank:
Finally we will subject them to a complete audit. I have been working with Ron Paul, who is the main sponsor of that bill. He agrees that we don't want to have the audit appear as if influences monetary policy as that would be inflationary.That is pure political CYA. The only purpose to giving the GAO "complete" audit powers is to influence monetary policy.
UPDATE: The "Daily Paul" takes notice, though I don't see an actual counterargument. MORE: I encourage Ron Paul supporters to read my earlier posts on whether the Fed is private, and on pure-strain gold.