Ron Paul conflates two things (1) short-term Fed lending designed to ensure liquidity in the banking sector, and (2) the socialization of private debt that took

Ron Paul conflates two things (1) short-term Fed lending designed to ensure liquidity in the banking sector, and (2) the socialization of private debt that took place through the bailouts. The Federal Reserve's major function is adjusting the money supply to balance employment and inflation. Yes, it expanded the money supply quickly in response to a collapse in credit in the private market. This is not a problem. It can remove liquidity from the markets just as quickly when and if inflation returns. The second issue (saddling the government with large amounts of private debt) is a real problem, because it involves the redistribution of wealth. That has nothing to do with whether Central Banks should follow inflation targeting. Here as elsewhere, Ron Paul is marking an argument about whether banks or miners should control the money supply by making a moral claim about the unsustainability and unfairness of public debt (issue two).