CORYN and BRADY: The Federal Reserve needs a 100-year checkup

[Geee]

Washington Times:

Maintaining the purchasing power of the dollar is critical to a strong U.S. economy and to the economic well-being of middle-class American families. The Constitution grants Congress power over our nation’s currency. One hundred years ago, Congress assigned this responsibility to the Federal Reserve. The Fed’s centennial anniversary, reached last month, marks an appropriate time for a constructive and bipartisan review of America’s central bank’s performance over its first century and the proper role for the Fed in the future.

 

History proves that a sound and stable dollar is the best foundation for robust economic growth. Absent stability, price inflation steals from the pocketbooks of American families, punishes savers and increases uncertainty. This weakens business investment, job creation and real income growth for families, especially for those working to climb the economic ladder.

 

Even if consumer price inflation remains tame, asset-price inflation can create unsustainable bubbles that devastate the American and global economy when they burst. On the flip side, deflation can be equally destructive, leading to debt defaults, bankruptcies and financialmeltdowns.

 

Unfortunately, the purchasing power of the U.S. dollar over time has been anything but stable. A dollar in 1967 is equivalent to barely 14 cents today.