Mr. Speaker, how long is Congress going to sit idly by while the Federal Reserve destroys the value of the U.S. dollar? On Friday, May 7, our dollar was worth only one twelve-hundredth of an ounce of gold. That means that the dollar has lost more than three-quarters of its value in just 9 years, since 2001.
Let's not kid ourselves and think the value of our dollars in terms of gold doesn't matter. Where gold prices go, other prices follow. We are either going to see the dollar price of gold fall or we are in for a blast of inflation that will crush the middle class and lead to yet another recession.
If you think that this can't happen, let me remind you that is exactly what happened in the 1970s and the early 1980s. Do we want to go back to the 1970s? Do we want to have double-digit inflation followed by double-digit unemployment? Well, that will happen unless we stabilize the U.S. dollar.
And let's not kid ourselves and think that because the dollar is rising against the euro, all is well in America. The euro and the dollar are both headed off the financial cliff. The euro is just jumping first. Mr. Speaker, how can we expect to have a stable economy or a stable financial market without a stable currency? The dollar is involved in every single transaction we do. If it moves around, it takes everything with it. We have seen in the past 2 years just how high the cost of an unstable dollar can be.
Robert Mundell, the Nobel Prize-winning economist and adviser to President Reagan, says that it was the Federal Reserve that caused the real estate bubble and bust. He says that the Fed is responsible for the economic crisis we are in today. That makes sense. It takes a lot of power to do this much damage, and there is no economic power greater than money.
Here's what happens, and people are not stupid: When the price of gold heads up, people sense that inflation is on the way. The way you protect yourself from inflation is to buy real assets with borrowed money. The longer the inflation goes on, the more leverage builds up and the bigger the ultimate crash. Well, we got the bubble in real assets in 2001 to 2007 and the crash came in 2008. Do we want another one? Isn't 9.9 percent unemployment high enough?
Mr. Speaker, I have right here a pocket Constitution that many Members carry around with them. When all else fails, we ought to read the Constitution. It says in article I, section 8, Congress shall have the power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.
What this means is that Congress is supposed to set the value of the dollar. It is the constitutional duty of Congress to regulate the value of our money. But Congress ignores its legal obligation and does not regulate the value of money. What Congress does, it gives the Fed the responsibility to regulate interest rates. But the Constitution does not give the Fed or any other government agency the power to regulate interest rates.
There's a lot of talk about how important it is that the Federal Reserve should be independent. Well, Mr. Speaker, I don't believe that any part of the government should be independent of the Constitution. All the Fed's vaunted independence has produced is two boom-bust cycles in 10 years, the second one worse than the first.
Mr. Speaker, there is wisdom in the Constitution. That is why I have introduced H.R. 835, which is called the Dollar Bill Act. This bill would fulfill Congress' constitutional responsibility to define the value of the dollar. By doing so, we can stabilize the value of the dollar and stabilize the American economy.