Ron Paul: Bernanke's defense of Fed a 'hoax'

Fed Chairman Ben Bernanke's warning that further regulation would "impair" the economy is a "hoax," according to Rep. Ron Paul (R-Texas).

Responding to Bernanke's op-ed in The Washington Post this past weekend, in which the Federal Reserve chairman said that Paul's bill to audit the Fed would harm the U.S. economy, the Texas congressman accused Bernanke of dodging responsibility for his role in causing the recession.

"He claims that they're rescuing, and making things better. But he takes no responsibility for causing all the problems," Paul said during an appearance on the Fox Business Network.

"So I think it's a hoax for him to talk about financial stability," the libertarian Republican added. "I mean, how could it get much worse?"

Paul's bill to audit the monetary institution, which has drawn over 300 supporters in Congress, along with Senate Banking Committee Chairman Chris Dodd's (D-Conn.) proposal to strip the Fed of some key regulatory power prompted Bernanke to take to the pages of the Post to defend the Fed's work on the economy.

"A number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions," Bernanke wrote in a thinly veiled shot at the Paul and Dodd proposals. "These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States."

Paul, a 2008 Republican presidential candidate, called the op-ed's sentiments "predictable."

"This is a predictable result of setting up the Federal Reserve in the first place," he said. "Finally, the bubble burst and the big financial crisis is here, and they can't inflate their way out of it."

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