Rand Paul supports the prospect of abolishing the Fed, with a major proviso

Sen. Rand Paul, R-Ky., explained to Fox News Digital during an interview on Tuesday that he would support abolishing the Federal Reserve System, with the key proviso that the country stop engaging in deficit spending, and instead, run a balanced budget.

But the fiscal hawk and son of former U.S. Rep. Ron Paul, a famous Federal Reserve critic, says he does not anticipate that will happen.

“I see the opposite,” he said, indicating that many in the GOP who previously cared “about deficits under Biden, seem to care less about deficits under Trump.” 

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“I frankly think if Congress weren’t running deficits you could do without a Fed,” he said. 

Though he added that there would need to be a “clearinghouse” system, indicating that with the Fed out of the picture, the market would need to be allowed to “fill that space” over time.

Paul believes that the free market — supply and demand — should dictate interest rates.

“Interest rates are a universal price,” he explained, opining that they are likely “the most prolific price in all of the economy.”

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The last time the Federal Open Market Committee decided to decrease the target range for the federal funds rate was back in December, and President Donald Trump has been stridently calling for the Fed to move on rate cuts.

But Paul compared rate-cut demands to insisting that meat is too expensive, and Trump should lower its price — the senator pointed out that most people would view such a call as “nonsensical” as it pertains to consumer goods, “but for some reason even conservatives sort of lose their mind when it comes to interest rates,” he said.

The senator noted that he thinks “really what we want is a Federal Reserve that’s less involved with manipulating interest rates.”

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Paul, who opined that there is likely “no more powerful and secretive organization in all of government,” is pushing a bill to audit the Fed.

The proposed legislation, which is also backed by some of Paul’s GOP colleagues, calls for the Comptroller General of the U.S. to audit the board of governors of the Federal Reserve System and the Federal Reserve banks. 

He is also pushing a measure, which has been cosponsored by left-wing Sen. Bernie Sanders, I-Vt., titled the “End the Fed’s Big Bank Bailout Act,” which includes language stipulating, “No Federal Reserve Bank may pay earnings on balances maintained at a Federal Reserve Bank by or on behalf of a depository institution.”