On Wednesday, the Federal Reserve announced that it was raising interest rates for the first time in seven years. Surprisingly, longtime critic of zero interest rates Senator Rand Paul skipped the expected sigh of relief, instead expanding his criticism of the Federal Reserve’s role in setting the value of money:
“Is it a good thing or a bad thing to raise the interest rate?” Paul asked. “Well, I’m kind of agnostic on it. It’s kind of like if you ask me: All right, should the Politburo raise the price of bread or lower the price of bread? I like both prices, but the real question should be: Should the government be involved with setting prices? What amazes me about the Federal Reserve setting interest rates is that almost to a person, conservative economists in our country will say, wage and price controls are a mistake.”
The Soviet references seem a little overboard, but it’s good to hear Senator Paul bring up the important question of whether the federal government should be in charge of setting the price of anything, much less the value of the dollar. Rand Paul has been a big advocate in Congress of reform packages like the Centennial Monetary Commission, which passed the House last month as part of the FORM Act. As 2016 heats up, I’m looking forward to Senator Paul continuing to lead a national discussion on the future of U.S. monetary policy.
Nick Arnold is a researcher for the American Principles Project.