This is the Cato Daily Podcast for Tuesday, April 21st, 2015.

I'm Caleb Brown.

Just what powers does the Government Accountability Office have

to look into how the Federal Reserve conducts its business, and what powers should it have?

At a recent Cato Institute event on the Federal Reserve, I spoke with David Walker, former Comptroller General of the GAO, about the challenges to a more coherent and transparent

monetary system.

At the center of the question of whether or not the GAO ought to have additional authority to audit the Federal Reserve, you put Congress

and the President.

So what is the basic problem there?

Well the Fed is an independent agency within the federal government.

And ironically though it's not consolidated with the financial statements of the US

government which we can come back to if you want.

But the Fed's role has expanded over time, and it's engaged in some unprecedented extraordinary

measures in particular since 2008 because of the

financial crisis in large part because it was the only game in town.

The Congress and the President have not been able to work effectively together

to try to deal with fiscal and other challenges that exist.

And as a result, given the Federal Reserve's dual mandate, which not only is concerned with maintaining reasonable price stability, modest levels of inflation, reasonable long-term interest rates in order to be able to promote economic growth and therefore hopefully generate additional employment opportunities.

Since the 1980s it's had an express responsibility or second mandate to be concerned with

unemployment and obviously unemployment has been high in recent years.

Frankly it's higher than the government tells you because of the way they keep score and almost

of the unprecedentedly low labor force participation rates as well as under-employment that exist.

...