Congressional letter to Bernanke...
Dear Chairman Bernanke:
In testimony before the House Budget Committee, you called on Congress to "begin planning now for the restoration of fiscal balance." We support your call to action and ask the Federal Reserve to back that policy by terminating your recent practice of purchasing Treasury securities.
We know that the Congress should cut spending to reduce borrowing. We are committed to that goal. We also know that the Fed's current policy of creating dollars for use in covering U.S. debts is a new and highly risky policy that threatens to debase the dollar. Currently, the Treasury's Bureau of Public Debt is borrowing over $160 billion a week to finance our deficit. Lenders to the U.S. government are expressing growing reluctance to buy more U.S. debt. Credit rating agencies are ready to cut Britian's AAA rating - the U.S. may be next.
Creating dollars to cover debts gives markets a short term boost at the expense of debasing the dollar and triggering inflation. To date, the Federal Reserve has already created over $130 billion to cover $35 billion of long-term debt and over $100 billion of short-term securities.
Key policy makers among U.S. creditors, especially in China and Japan, increasingly doubt the wisdom of this new policy. Most investors now see that the United States has embarked on a policy of dollar inflation in a short-sighted attempt to repay old debts with newly-created dollars.
By fully repaying revolutionary war debts incurred by the United States, President Washington granted his country the gift of confidence in the "full faith and credit" of the U.S. government. Unless we put a stop to the new policy of creating money to cover debts, we will steal our future and end the founding father's gift of financial integrity.
We urge you to rapidly end this new policy of buying U.S. debt with newly created dollars.
Sincerely,
Mark Kirk
Member of Congress
Leonard Lance
Member of Congress
Erik Paulsen
Member of Congress
Dan Burton
Member of Congress
