Strip the Fed's Dual Mandate, Unleash Free Banking
Project 2025 proposes eliminating the Federal Reserve's full-employment mandate, replacing it with a single-minded focus on price stability, and explores a return to the gold standard or a 'free banking' system — a radical deregulation that would hand monetary policy to private banks. None of these proposals have been enacted as of this writing.
The Federal Reserve's dual mandate — maximum employment and stable prices — is the product of a hard-won democratic compromise, forged after the Great Depression and codified in the 1977 Federal Reserve Reform Act. Project 2025 proposes to shred that bargain, forcing the Fed to treat unemployment as the price of fighting inflation. That is not 'sound money'; it is a structural shift that would treat joblessness as an acceptable cost of stable prices.
The chapter's flirtation with 'free banking' and a gold standard is even more dangerous. Free banking would remove any public check on the supply of money and credit, effectively handing control of the monetary system to private banks — the very institutions whose speculative excesses triggered the 2008 crash and the 2023 regional-banking panic. A return to the gold standard would lash the U.S. economy to a rigid commodity, making it impossible for the government to respond to recessions, financial crises, or climate disasters. These are not serious monetary reforms; they are ideological fantasies that would replicate the boom-bust cycles of the Gilded Age.
A progressive alternative is straightforward: keep the dual mandate, but hold the Fed accountable to it equally. Enforce the 1977 Act's requirement that monetary policy support both goals, and appoint policymakers who view full employment as a moral commitment, not a bargaining chip. Empower the Fed to use its emergency lending authority to direct credit toward green investment, affordable housing, and small-business lending — not just to bail out megabanks. And create a public payments system to guarantee that every American has access to a free, secure digital bank account at the Fed, without the surveillance dystopia of a private-sector digital currency. That is what a democratic monetary policy looks like.
The humanitarian alternative
Codify the dual mandate into permanent statute with an explicit 'maximum employment first' priority: the Fed must not raise interest rates unless the prime-age employment-to-population ratio is above its pre-Great Recession peak. Reject any gold-standard commission. Instead, direct Treasury to study a modern monetary policy framework that uses fiscal coordination with the Fed to achieve full employment without inflation. Maintain and strengthen FinCEN and IRS enforcement capacity, not cut it.
Original source — excerpted
project2025 Project 2025 ch. 22: Department of the Treasury (pp 693-696)"— 660 — Mandate for Leadership: The Conservative Promise Moreover, the International Trade Administration—which “is centrally placed to craft and implement U.S. trade policy”—should counter “the malign influence of China and other U.S. adversaries” and strongly “defend against trade violations.” In Chapter 22, William L. Walton, Stephen Moore, and David R. Burton note that under the Biden Administration, the Treasury Department has failed to achieve any of the agency’s core objectives. Under the leadership of Secretary Janet Yellen, Treasury has placed “equity” and “climate change” among its top five pri - orities. The next Administration must act decisively to curtail activities that fall outside of Treasury’s mandate and primary mission. Treasury must refocus on its core mission of promoting economic growth, prosperity, and economic stability. The authors add that “Treasury should make balancing the federal budget a mis - sion-critical objective.” The authors propose legislation to reform the tax code, writing, Tax policy has a powerful impact on the economy. The Treasury Department should develop and promote tax reform legislation that will promote prosperity. To acc…"