Dear Patriot,

House Financial Services Chair Maxine Waters (D-CA) and Senator
Elizabeth Warren (D-MA) have introduced the Federal Reserve
Racial and Economic Equity Act. This legislation directs the
Federal Reserve to eliminate racial disparities in income,
employment, wealth, and access to credit.

Eliminating racial disparities in access to credit is code for
forcing banks and other financial institutions to approve loans
based on the applicants' race, instead of based on their income
and credit history. Overlooking poor credit history or income
below what would normally be required to qualify for a loan
results in individuals ending up with ruinous debt. These
individuals will end up losing their homes, cars, or businesses
because banks disregarded sound lending practices in an effort to
show they are meeting race-based requirements.

Forcing banks to make loans based on political considerations
damages the economy by misallocating resources. This reduces
economic growth and inflicts more pain on lower-income Americans.

The Carter-era Community Reinvestment Act has already shown what
happens when the government forces banks to give loans to
unqualified borrowers. This law played a significant role in the
housing boom and subsequent economic meltdown. The Federal
Reserve Racial and Economic Equity Act will be the Community
Reinvestment Act on steroids.

This legislation also requires the Fed to shape monetary policy
with an eye toward eliminating racial disparities. This adds a
third mandate to the Fed's current "dual mandate" of
promoting a stable dollar and full employment.

Federal Reserve Chair Jerome Powell has already publicly
committed to using racial disparities as an excuse to continue
the Fed's current policy of perpetual money creation. Since
inflation occurs whenever the Fed creates new money, Powell and
his supporters want a policy of never-ending inflation.

Supporters of this scheme say that inflation raises wages and
creates new job opportunities for those at the bottom of the
economic ladder. However, these wage gains are illusory, as wages
rarely, if ever, increase as much as prices. So, workers' real
standard of living declines even as their nominal income
increases. By contrast, those at the top of the income ladder
tend to benefit from inflation as they receive the new money -
and thus an increase in purchasing power - before the Fed's
actions cause a general rise in the price level. The damage done
by inflation is hidden and regressive, which is part of why the
inflation tax is the most insidious of all taxes.

When the Fed creates new money, it distorts the market signals
sent by interest rates, which are the price of money. This leads
to a bubble. Many people who find well-paying jobs in bubble
industries will lose those jobs when the bubble inevitably
bursts. Many of these workers, and others, will struggle because
of debt they incurred because they listened to
"experts" who said the boom would never end.

The Federal Reserve's manipulation of the money supply lowers the
dollar's value, creates a boom-and-bust business cycle,
facilitates the rise of the welfare-warfare state, and enriches
the elites, while impoverishing people in the middle and lower
classes. Progressives who want to advance the well-being of
people in the middle and lower classes should stop attacking free
markets and join libertarians in seeking to restore a sound
monetary policy.

The first step is to let the people know the full truth about the
central bank by passing the Audit the Fed bill. Once the truth
about the Fed is exposed, a critical mass of people will join the
liberty movement and force Congress to end the Fed's money
monopoly.

Support Campaign for Liberty
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Respect for the Constitution, the rule of law, individual
liberty, sound money, and a constitutional foreign policy
constitute the foundation of the Campaign for Liberty.


Because of Campaign For Liberty's tax-exempt status under IRC
Sec. 501(C)(4) and its state and federal legislative activities,
contributions are not tax deductible as charitable contributions
(IRC § 170) or as business deductions (IRC §
162(e)(1)).

www.CampaignForLiberty.org





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