Rep. Thomas Massie Reintroduces Bill to Abolish the Federal Reserve
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This week, Rep. Thomas Massie (R-KY) reintroduced HR 1846, the Federal Reserve Abolition Act, which would end the central bank and repeal the Federal Reserve Act of 1913.
A New Attempt to Abolish the Fed
Massie’s bill proposes a one-year transition period to dissolve the Board of Governors and the 12 regional Federal Reserve Banks. During this period, the Federal Reserve Chairman would oversee the liquidation of assets and the settlement of liabilities to ensure an orderly dissolution. Proceeds from the liquidation would go to the U.S. Treasury, while remaining liabilities, including employee benefits, would be assumed by the federal government.
After 18 months, the Treasury Department and the Office of Management and Budget would have to report to Congress on their progress on implementing the law. Massie, along with Sen. Mike Lee (R-UT), who introduced a similar bill in the Senate (S. 869), blames the Federal Reserve for the inflation.
"The American people have suffered severe inflation, and the Federal Reserve must be held accountable," Massie said. "During COVID, the Federal Reserve created trillions of dollars out of thin air and lent them to the Treasury to finance massive deficit spending. By monetizing public debt, the Federal Reserve has undermined the value of the dollar and promoted unfettered monetary policies, leading to high inflation."
The Root Cause of Inflation
“The creation of money out of public debt is a coordinated effort between the Federal Reserve, the Treasury, Congress, big banks, and Wall Street,” Massie said. “This process has caused retirees to see their savings evaporate, while these inflationary policies have benefited only the wealthy and well-connected. If we really want to control inflation, the most effective way is to end the Federal Reserve.”
Critics of the Federal Reserve have long argued that the central bank operates with unchecked power, manipulating interest rates and the money supply to benefit a few at the expense of ordinary people. Massie emphasized that the creation of money out of debt not only enriches banks and Wall Street, but also erodes the purchasing power of savings, especially for retirees.
Sen. Mike Lee also shared this view, saying, “Not only has the Federal Reserve failed in its mission, it has become a tool of economic manipulation, directly contributing to the financial instability that many Americans face today.”
The Long-Term Movement to Abolish the Fed
The idea of abolishing the Federal Reserve is not new. It was first proposed by former Rep. Ron Paul (R-TX) in 1999 and then last proposed in 2013. Massie’s bill represents a revival of this movement, suggesting that after more than a century of existence, the US central bank has failed to meet the expectations of the people, and many are reconsidering its necessity in the wake of multiple economic crises.
With the current Republican-controlled Congress and a president who supports bold reforms, the bill’s chances of passing are not far-fetched. If passed, HR 1846 could fundamentally reshape the US financial system. Whether or not the bill becomes law, it has reignited a long-standing debate about the power of central banks and the will of the people, and the country’s economic future will surely face many challenges in the coming months.