Morning Must-Read: Robert Litan: What ‘Audit the Fed’ Really Means–and Threatens

…had when they called the inheritance tax the ‘death tax.’ Or how opponents of the president’s health-care law gathered political strength… calling a medical reimbursements panel the ‘death panel.’ And so it is with Washington’s latest craze, the movement spearheaded by Sen. Rand Paul to ‘audit the Fed,’ an effort launched by the senator’s father, Ron Paul…. The Fed’s financial statements have long been audited by professionals, but Sen. Paul’s bill is not about that… [it’s about the] Government Accountability Office… giv[ing] Congress annual reports on monetary policy functions….

The economists employed by the GAO are no match for the economists at the Fed. It is not within their domain of expertise…. It’s fine for Congress to regularly ask the Fed… to report…. But why create… a ‘shadow Fed’ elsewhere within the government?… If backers of the ‘audit the Fed’ movement want to get rid of the agency, they should say so, and let that debate begin. If it does, central banks will win…. If ending the Fed is not the objective… economic evidence makes clear that truly independent central banks keep inflation lower…