Global economist David Malpass explains for Forbes readers why the Federal Reserve’s recent activity flies in the face of the Founders’ notion of a limited constitutional government.

ONE OF THE MOST important functions of constitutional government is to limit the government’s power and guide it in useful directions, not for self-aggrandizement. Another is to facilitate sound money, which is at the core of free markets and property rights, central tenets of the rule of law and the ability of a country to attract investment.

This is why the current monetary and regulatory regimes’ wild excesses are so egregious. The first article of the U.S. Constitution vests in Congress the power “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” Thus, as they created the nation’s laws, the Founding Fathers believed that sound money was as important a foundation for economic growth and law as the length of the foot or the weight of the ounce is for consistency in measurement, and that Congress should be responsible for it. …

… This historical background is relevant as we enter the seventh year of an uncontrolled government expansion. To force interest rates toward zero, the government has imposed thousands of regulations controlling the amount of credit and guiding it toward large borrowers, especially government itself, at the expense of small borrowers and savers.

Global fines levied on the financial system by government agents have reached $200 billion and will probably climb much higher. Without clear authorization the government, through the Federal Reserve, has incurred $2.6 trillion in uncollateralized, interest-paying liabilities to banks in order to fund the Fed’s purchases of high-priced government debt.

The Magna Carta explicitly limited the burden of current debt on future generations. That’s protection we’ve lost as the government blithely passes the burden of trillions of dollars of debt, compound interest and hard-to-maintain assets from one generation to the next.