U.S. Representative Ron Paul

The Bailout Surge

Posted by: Ron Paul (November 24, 2008, 11:46 AM)

This week the bailout of the Big Three automakers was under heavy consideration in Congress’s lame duck session.  I have always opposed government bailouts of private organizations.  Back in 1979 Congress had hearings about bailing out Chrysler and I was on record pointing out that these types of policies are foolish and very damaging to the long term economic health of our country.  They still are.

There was also renewed pressure this week to bailout homeowners and send another round of stimulus checks to “Main Street” to balance out all the handouts to big business.  It seems that eventually the entire economy is going to be blanketed over with Federal Reserve notes.  Most in Washington are completely oblivious as to why this model of money creation and spending is so dangerous.

We must remember that governments do not produce anything.  Their only resources come from producers in the economy through such means as inflation and taxation.   The government has an obligation to be good stewards of these resources.  In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones.  By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use.  An essential element of a healthy free market, is that both success and failure must be permitted to happen when they are earned.  But instead with a bailout, the rewards are reversed – the proceeds from successful entities are given to failing ones.  How this is supposed to be good for our economy is beyond me.

With each bailout we hear rhetoric that this is the mother of all bailouts.  This will fix the problem once and for all, and that this is absolutely necessary to avert disaster.  This sense of panic squeezes astonishing amounts of dollars out of reluctant but hopeful legislators, who hate the position they are being put in, but are relieved that it will be the last time.  It is never the last time, and again and again we are faced with the same scenarios and the same fears.  We are already in the bailout business for such a staggering amount that admitting it was wrong in the first place would be too embarrassing.  So the commitment to this course of action is only irrationally escalated, in the hopes that somehow, someway eventually it will work and those in power won’t have to admit they were wrong.

It won’t work.  It can’t work.  We need to cut our losses and get back on course.  There is too much at stake for too many people to continue down this road.  The bailouts thus far to AIG, Bear Stearns, Fannie and Freddie, and TARP funds amount to around $1.5 trillion. Considering our GDP is $14 trillion, and our Federal budget is already $3 trillion, this additional amount will significantly eat into our future lifestyles.  That amounts to an extra $5,000 that every person in the country needs to somehow produce just to keep up.  It is obvious to most Americans that we need to reject corporate cronyism, and allow the natural regulations and incentives of the free market to pick the winners and losers in our economy, not the whims of bureaucrats and politicians.

Posted in Monetary Policy | 77 Comments | Permalink

Restricting Freedoms and Choices

Posted by: Ron Paul (November 17, 2008, 12:54 PM)

As the financial sector continues its tailspin despite efforts to bail out Wall Street, among the few gainers in recent stock trading have been those companies looking for a new “shot in the arm” with government funding from the next administration.  

With its strident rhetoric toward reestablishing the so called “pro-choice” agenda, the incoming administration has threatened a whole host of policies that would not only reduce restrictions on abortion, but would actually force people who wish to avoid participating in the procedure to support it.

As a physician who has delivered over 4,000 babies I am very disturbed by the continued efforts of those on the left to establish absolute rights to abortion.  However, even more distressing is the notion that taxpayers should be forced to subsidize life-ending procedures such as abortion and embryonic stem cell research.

In addition to the news that those who will benefit from federally-funded stem cell research have seen an uptick in their financial position as a result of the election, comes news from the United States Conference of Catholic Bishops that many health care facilities under the auspices of the Roman Catholic Church may be shut down as a result of the so-called “Freedom of Choice Act” for refusal to perform abortions.

Not only does this Act seem to have growing support in Congress, the President-elect and his Administration have indicated support for this legislation.  Since many people cast their votes in a way that they believed would help to improve and increase availability of health care, this is an ironic twist.

Of course, the government takeover of health care began a long time ago, but we should be wary of how far that takeover will go if more private providers are forced out of the marketplace.  If enacted, The Freedom of Choice Act and the potential for increased federal funding of embryonic stem cell research will go to show that the incoming Congress and Administration are far more dedicated to a government takeover than they are to affordable and available health care.  Moreover, these approaches show no real concern at all for the free choices of taxpayers and health care providers who wish to be free from giving assistance to immoral activities.

These facts should also serve to remind social conservatives that they are better to leave the legislative remedies for important social issues at the level where they constitutionally belong, namely at the discretion of state and local officials.  The centralization of power that seemed so attractive to many conservatives just a few years ago no longer seems pleasant at all in light of a more liberal-minded majority in both Houses of Congress and the White House.

This should be a good lesson for future conservative majorities, namely that the centralization of power never results in anything more than the most temporary of “gains” for those who are committed to traditional moral principles, and the power one administration consolidates for itself must inevitably be handed over to the next administration, which will use that increased power for its own agenda.

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Posted in Civil Liberties | 106 Comments | Permalink

Hopes for the Future

Posted by: Ron Paul (November 10, 2008, 02:55 PM)

With the election behind us, our country turns hopeful eyes to the future.  I have a few hopes of my own. 

I congratulate our first African-American president-elect.  Martin Luther King, Jr. certainly would be proud to see this day.  We are stronger for embracing diversity, and I am hopeful that we can continue working through the tensions and wrongs of the past and become a more just and colorblind society.  I hope this new administration will help bring us together, and not further divide us.  I have always found that freedom is the best way to break down barriers.  A free society emphasizes the importance of individuals, and not because they are part of a certain group.  That’s the only way equal justice can be achieved.

We will face more tough economic problems during this new administration.  In fact, the worst is yet to come.  A vast amount of problematic mortgages have not begun to reset their variable interest rates and go into default.   We already have unprecedented deficits, spending is out of control, and more big industries are coming to government with their hands out.  My hope is that this administration will handle this economic crisis better than the interventionists and big government spenders of the 1930’s, the bureaucrats that prolonged the Depression.  I hope that new government programs and spiderwebs of red tape do not pop up to interfere with American productivity, and that we can quickly get our financial footing again.  We have to understand that an economic correction needs to take place and the only way out of the coming recession is to go through it.  Efforts to avoid it can only prolong it.  I hope we can somehow find our way back to sound money and reject corporate cronyism.

We cannot address our budget problems at home without changing our disastrous foreign policy abroad.  I am hopeful that the new administration can take on the mantle of peace and diplomacy in foreign policy that many Americans feel they were promised.  Many other nations also have this hope, which exudes from their congratulatory sentiments offered after the election.  They hope that national sovereignty will be respected.  They hope that through diplomacy violence and war can be averted.  I hope so too.  One thing is unquestionable: our aggressive foreign policy of the past has been costly, in blood and in treasure.  Our treasure is running out, and fewer volunteers are stepping up to enable that foreign policy.  So for these reasons, if we are to continue to have an all-volunteer military, and see prosperity again in the future, I have every reason to hope our foreign policy will change.  In order for it to remain the same, mandatory military service would have to return, as well as accelerated theft through debt and inflation to pay for it.  I have a hard time imagining popular support for these policies, simply for the sake of war and conquest, when we clearly want peace.

I have many hopes for the future in this time of transition.  But I have seen this country face many forks in the road, and sadly take the wrong one too many times.  We have heard a lot of talk, and it remains to be seen what actions and specific policies that talk will translate into.  So while I may be hopeful, I remain deeply concerned about our future.

 

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Posted in Civil Liberties, Foreign Policy, Monetary Policy | 87 Comments | Permalink

The Moral Hazard of Regulation

Posted by: Ron Paul (November 03, 2008, 02:51 PM)

Since the bailout bill passed, I have been frequently disturbed to hear “experts” wrongly blaming the free market for our recent economic problems and calling for more regulation.  In fact, further regulation can only make things worse.

 

It is important to understand that regulators are not omniscient.  It is not feasible for them to anticipate every possible thing that could go wrong with whatever industry or activity they are regulating.  They are making their best guesses when formulating rules.  It is often difficult for those being regulated to understand the many complex rules they are expected to follow.  Very wealthy corporations hire attorneys who may discover a myriad of loopholes to exploit and render the spirit of the regulations null and void.  For this reason, heavy regulation favors big business against those small businesses who cannot afford high-priced attorneys.

 

The other problem is the trust that people blindly put in regulations, and the moral hazard this creates.  Too many people trust government regulators so completely that they abdicate their own common sense to these government bureaucrats.  They trust that if something violates no law, it must be safe.  How many scams have “It’s perfectly legal” as a hypnotic selling point, luring in the gullible?  Many people did not understand the financial house of cards that are derivatives, but since they were legal and promised a great return, people invested.   It is much the same in any area rife with government involvement.  Many feel that just because their children are getting good grades at a government school, they are getting a good education.  After all, they are passing the government-mandated litmus test.  But, this does not guarantee educational excellence.  Neither is it always the case that a child who does NOT achieve good marks in school is going to be unsuccessful in life.  Is your drinking water safe, just because the government says it is?  Is the internet going to magically become safer for your children if the government approves regulations on it?  I would caution any parent against believing this would be the case.  Nothing should take the place of your own common sense and due diligence.

 

These principles explain why the free market works so much better than a centrally planned economy.  With central planning, everything shifts from one’s own judgment about safety, wisdom and relative benefits of a behavior, to the discretion of government bureaucrats.  The question then becomes “what can I get away with,” and there will always be advantages for those who can afford lawyers to find the loopholes.  The result then is that bad behavior, that would quickly fail under the free market, is propped up, protected and perpetuated, and sometimes good behavior is actually discouraged. 

 

Regulation can actually benefit big business and corporate greed, while simultaneously killing small businesses that are the backbone of our now faltering economy.  This is why I get so upset every time someone claims regulation can resolve the crisis that we are in.  Rather, it will only exacerbate it.

 

 

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Posted in Civil Liberties, Monetary Policy | 83 Comments | Permalink

Spending the Economy into Oblivion

Posted by: Ron Paul (October 27, 2008, 12:50 PM)

With news this week that Congress is poised to consider a new stimulus package, I am forced to again ask a question that seems silly in Washington:  How will we pay for this?

While a few Members of Congress have raised the issue, it certainly was not the primary concern of the House Budget Committee when they interviewed Ben Bernanke on Monday.  And, when they did direct this question to the Chairman of the Federal Reserve, his answer was the standard rhetoric about how Congress needed to make tough choices.  Needless to say, not many specifics were discussed.

One of the most liberal members of the House, Barney Frank, has at least volunteered something of a suggestion: “We can let Iraq take care of itself.”  This, of course, goes in the right direction, but hardly far enough.

We need to declare the facts and their obvious consequences.  The deficit of the United States is now spiraling out of control, and the recent bailout package has only made it worse.  Our crushing federal debt is one key reason behind our current economic turbulence.

As Congress begins to consider the third “stimulus package” of the year, we need to realize it is time to start setting priorities.  Priority number one should be cutting spending in foreign countries. This does not simply mean Iraq, but everywhere.

The next stimulus package is likely to include money for infrastructure.  While these investments are, constitutionally speaking, supposed to be made by state and local governments, it is not likely that Congress will suddenly begin to pay heed to the document we are all sworn to uphold.  Still, we need to acknowledge the fact that the current Congress and Administration are rushing the nation toward bankruptcy.

This being the case, we could hope they would at least come to their senses regarding our debt and foreign spending sprees.  Our nation’s foreign-held debt is at record highs and moving ever higher.  Continuing to borrow money from Red China and others in order to pay “dues” to the United Nations and run “Plan Colombia” makes no sense at all.

Our whole carrot-and-stick approach to foreign policy makes no sense.  The US government simultaneously gives money to Israel, and to Egypt.  We send AIDS money to Africa while AIDS clinics in America shut down.  “Millennium challenge” funding goes to countries which enact “market based reforms” as we push our own country further and further into a centrally planned economy.

Economic recovery will only come through financial prudence, savings and getting back to producing things of value again.  But it seems to be a foregone conclusion that we are about to enact another government initiative to “stimulate the economy.”   Instead, there should be some serious talk about cutting all of these foreign giveaway programs.  But, alas and again, we should not hold our breath.  Congress is still not close to being serious about ending its addiction to debt and spending, and is again faced with the deadly temptation to attempt to spend us out of a recession.  We should not forget that in the 1930’s those types of efforts gave us the Great Depression. 

 

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Posted in Foreign Policy, Monetary Policy | 117 Comments | Permalink

Too Big to Fail?

Posted by: Ron Paul (October 20, 2008, 01:27 PM)

In the midst of highly unpopular bailouts of Wall Street, many justifications have been given about why Washington feels the need to act.  Some claim that capitalism and the free market are to blame, but we have not had capitalism.  If you compare our financial capital to our aggregate debt, this would be obvious.  In the same way, we have not had a truly free market.  The monetary manipulations of the Federal Reserve, a complex tax code, the many “oversight” agencies and their mountains of regulations show that we are far removed from a free market economy.

Another unsatisfying argument is that certain entities have to be bailed out because of their economic importance.   Supposedly, some entities can be so big, so important, that no matter what they do, citizens must perpetually sustain them. 

Even limited government has a basic duty to defend against force and fraud.  Some argue that force is somehow permissible just because the entity engaging in it is "economically significant."  But one could use this reasoning to prop up slavery.  It could be deemed unfortunate but economically beneficial, and indeed these arguments have been used historically to deprive people of their liberty.  But slavery should never be tolerated regardless of any economic benefit, just as systemic fraud should not be tolerated.  Some banks on Wall Street should fail.  Fannie and Freddie should fail.  They are perpetrating fraud against the people.  Yet, government insists on rewarding behavior which should instead be investigated, prosecuted, and punished.

There has been much evidence of fraud at Fannie and Freddie, but when one man, Franklin Raines, defrauded the organization out of millions of dollars through illegal accounting tricks, and ends up agreeing to pay back just a fraction, one could argue that it was well worth it to him.  Fannie went on to only get more deeply involved in subprime mortgages after this investigation.  Several organizations are suffering right now precisely because the free market is trying to work and punish mismanagement, if only the government would get out of the way and let it.  Perhaps banks are not lending to each other because they know that complicated accounting standards, created in part to defend against confiscatory tax policy, enables false fiscal pictures to be presented, which erodes trust.  But this is not a time for the government to step in with more burdensome and complicated regulations, or more foolish liquidity injections.  This is a time for some banks to fail, and remaining banks to deal honestly and transparently once again.  More regulations will only result in more lies.

Just as economies that turned away from slave labor had a transition period, our economy would transition as well, but in the end, if we turned to honest, sound money and a truly free market, we would end up with a more just society, founded on truthfulness and decency, not subject to the violence of force or the whims of fraudulent institutions.  Unfortunately, it seems we are headed into a new era of slavery, however, where all taxpayers will be forced to render to the Fed and big banking interests the bulk of the fruits of their labor, possibly through higher taxes but definitely through the eroding force of inflation.

 

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Posted in Monetary Policy | 110 Comments | Permalink

Capitalism Without Capital?

Posted by: Ron Paul (October 14, 2008, 12:27 PM)

It has been long understood that our federal government is going deeper into debt, consistently raising the debt ceiling and demonstrating no fiscal restraint.  In recent years, debt ceiling increases have been placed in “must pass” legislation as a means to guarantee that Republicans as well as Democrats would vote for them when Congress was under Republican control.

 

We also know our nation’s “negative savings rate” reflects the habits of private citizens, showing those habits to be not tremendously different than the habits of the public sector.  Yet, the signs of decline are becoming ever more apparent.  So apparent, in fact, that it seems unlikely that bailouts or other gimmicks will have even short term success.  More inflation, and creating moral hazard by bailing out egregious offenders, is a recipe for disaster.  These activities can seem to provide some short term relief, but it seems we are now at a significant crisis point, where monetary policy gimmicks don’t provide the band-aids they did in the past.

 

Not only is our nation on the verge of bankruptcy, but so are its people and private institutions. We are now repeatedly hearing about businesses “needing to access the credit market to make payroll.”  This is an unmistakable sign of more dire consequences ahead for the economy.  If businesses must borrow just to make payroll, this is evidence of a severe undercapitalization that cannot be sustained, even for the short run.

 

Couple these facts with items such as the explosion of the “pay day loan” industry and the unmasking of the false sense of economic well-being is nearly complete.  These pay day loan companies use preferred access to easy credit to inject cash into the hands of the working poor.  They are nearly always set up in lower-income neighborhoods.  These people, who are struggling to buy food and pay rent, get addicted to the credit drug.  Their standard of living is only further depressed by the interest payments on these loans that make them profitable to their providers.  Thus, the recipients are left even less capable of paying for items such as food and housing in the long run, without using this credit again and again.

 

These people are often the very ones being paid by businesses who “borrow to make payroll.”  This is the dark underbelly of the fiat money, borrow and spend economy this nation has been building.  As the government takes over more and more functions of the economy many see the rise of socialism as an antidote to this failure of “capitalism”.  However, the fact remains that our economy has been increasingly running on debt, not capital.  Capitalism does not exist without capital and debt is not, has never been and will never be a form of capital.   Only now are we seeing the more dire implications of an economy without capital. 

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Posted in Monetary Policy | 158 Comments | Permalink

The Do-Something Congress

Posted by: Ron Paul (October 06, 2008, 12:41 PM)

 It has not been a good week for the Republic.  It took quite a bit of trampling of the Constitution, but the bailout bill passed, as I suspected it would.

 

The bailout failed the first time it was brought to the House.  Undaunted, the Senate pressed on by attaching the bailout as an amendment to another House passed bill that was pending in the Senate.  The new bailout version had new taxes, so according to the Constitution it should not have originated in the Senate. 

 

The rallying cry heard all over the Hill the past two weeks was that Congress must act.  Our economy is facing a meltdown.  Would this bill fix it?  Nobody could really explain how it would.  In fact, few demonstrated any real understanding of credit markets, of derivatives, of credit default swaps or mortgage-backed securities.  If they did, they would have known better than to vote for this bill.  All they knew was that this administration was saying some frightening things, and asking for a lot of money.  And when has Congress ever been able to come up with a better solution to a problem than to throw more of your money at it?  So that is what Congress did, enacting a financial PATRIOT Act in the process.

 

In its embarrassment at being called a "Do-Nothing Congress" the 110^th Congress took decisive action and did SOMETHING.  No matter that it was the wrong thing.  In fact, it wasn't until the Senate had a chance to load it up with even MORE spending, when it was finally inflationary and horrible enough, at $850 billion instead of a mere $700 billion, that it passed – and with a comfortable margin, in spite of constituent calls still coming in overwhelmingly against it.  57 members switched their vote!

 

The market went down anyway.  Our nation is now just that much more in the hole.  You will pay your part of this mess through inflation, and very likely hyperinflation.

 

Sometimes doing nothing is much better than thrashing about aimlessly.  When one is caught in quicksand, for example, or when one doesn't understand economics and finds oneself in the position Congress was in for the past two weeks, with decades of irresponsible monetary policy coming to a head.  Why should we trust the same people who said just a few months ago that the economy was perfectly sound?  The same people who just knew there were weapons of mass destruction?  The same people that crammed the PATRIOT Act down our throats?  Why not consult the people who had the foresight and understanding to see this coming?  They would have recommended such logical actions as repealing the Community Reinvestment Act, which forces banks to make bad loans, or allowing the market to set interest rates instead of the Federal Reserve system.  How about abolishing the Federal Reserve altogether?  There are many things that could have been done, but don’t expect Congress take a course of action that comes from a place of understanding and competence when they could just spend money.

 

This bailout will be the legacy of the 110^th "Do-Something" Congress, along with record low approval ratings.  Here's hoping the 111^th Congress will be a "Do the Right Thing" Congress, and will focus on repealing and abolishing what is wrong with government instead of reinforcing it.

 

 

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Posted in Monetary Policy | 308 Comments | Permalink

Lipstick on a Bailout

Posted by: Ron Paul (September 29, 2008, 11:38 AM)

This time last week, the biggest bailout in the history of the world seemed to be a fait accompli.  Last weekend, the Fed Chairman and the Secretary of the Treasury had harsh words of doom and gloom for Congressional leaders, with the rest of the administration parroting along, and by last Monday it seemed both parties were about to fall in line and vote our Republic away by socializing the banking industry through this bailout. 

 

Foolish business behavior was about to be rewarded, and propped up a little longer, the bubble blown a little bigger, and our coming Depression made that much greater, but then something happened on the way to the House floor.

 

Citizens made their voices heard. 

 

The real story behind the story in Congress this week was the thousands of calls and emails sent to Representatives, clogging up inboxes and even slowing down the House internet system.  Slowly, like the Titanic turning around, sentiments on the Hill shifted, and we heard Congressmen capitulating and changing their tune a little, desperately trying to find ways to salvage the bailout without completely enraging their constituencies.

 

Now we hear about taxpayer protections, about golden parachutes, and about other nuances that hardly cover up the fact that we would be creating more money out of thin air and further devaluing the dollar!  The problem is not HOW the government is spending this money; it’s the fact that the government is spending this money.  We don’t have it.  We are already nearly $10 trillion in debt, not including unfunded liabilities.  We already spend about $1 trillion a year we don’t have on our overseas empire.  Now nearly $1 trillion more is somehow supposed to magically appear and solve all our problems!  No – creating more money might delay the inevitable for some well-connected banks on Wall Street, but in a few weeks we will find ourselves right back in this same position, but much poorer.

 

The unfortunate thing is that we’ve already spent at least $700 billion on other bailouts that did not solve the problem.  And while all this negotiation was taking place, the auto industry was quietly bailed out, with no controversy, no discussion, to the tune of $25 billion.

 

Inevitably, it appears Congress will call their constituents’ bluff and the bailout will pass, because that is the habit Wall Street and Washington have fallen into.  People are right to be concerned about our financial future.  I’ve been talking for 30 some years about reasons we need to be concerned and change our ways.  We find ourselves now in a position of no good options, and no silver bullets.  But the worst thing we can do is to compound our problems by intensifying the mistakes of the past.  We do have tough economic times ahead, no doubt, no matter what we do, even if we do nothing.  The question, is will we have the courage to take our medicine now and get it over with, or will we prolong the misery for many years to come?  I’m less and less optimistic about the answer to that question.

 

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Posted in Monetary Policy | 179 Comments | Permalink

Predictions vs. Reality in Iraq

Posted by: Ron Paul (September 22, 2008, 02:12 PM)

On September 10, 2002  I asked 35 questions regarding war with Iraq. The war resolution passed on October 16, 2002.  Now today, as some of my colleagues try to reestablish credentials regarding spending restraint, I want to call attention to my 18th question from six years ago:

“Are we willing to bear the economic burden of a 100 billion dollar war against Iraq, with oil prices expected to skyrocket and further rattle an already shaky American economy?  How about an estimated 30 year occupation of Iraq that some have deemed necessary to "build democracy" there?”

Many scoffed at my “radical” predictions at the time, regarding them as hyperbole.  Six years later, I am forced to admit that I was wrong.  My “radical” predictions were in fact, not “radical” enough. 

I warned of a draining 30-year occupation.  Now, politicians glibly talk about a 100-year occupation as if it is no big deal.  On cost, according to estimates from the Congressional Research Service, we have already burned through around $550 billion in Iraq, at a rate of about $2 billion per week.  Economist Joseph Stiglitz’s estimates are even higher, at $12 billion a month.  It is a total price tag quickly heading into the trillions, if we don’t stop bombing and rebuilding bridges in Iraq that lead us nowhere but bankruptcy!  Bridges in this country are crumbling along with our economy, while some howl about earmarks.  Earmarks are a drop in the bucket compared to war and occupation.

Yes, I was wrong about Iraq.  I knew it would be bad.  I didn’t know it would be this bad.

The American people deserve better.  Being asked to endorse such a farce is beyond insulting.  Clearly, the rosy predictions of the neo-Conservatives from before the war are not coming true.  Far from it!  With a straight face, one official estimated the TOTAL cost of reconstruction in Iraq would be just $1.7 billion.  Turns out that we spend more than that in ONE WEEK.  Our friends are not pitching in to cover the cost.  Expenses are not being covered by oil from a grateful and liberated Iraqi people.  Rather, big corporate interests are benefitting, the price of oil has more than quadrupled, and the American economy is on its knees and sinking fast.

No one predicted the exact course of this war before it started.  But to continue to listen to the foreign policy advice of those that were the MOST offbase will only lead to more foreign policy disasters.  We need to keep this in mind as we think about Russia, Iran, Cuba and other countries.  Keep in mind - the doomsday predictions on the Iraq War from six years ago, sound like a cakewalk today.  While what leaders in the administration had predicted, reads like a fairytale.  Ask yourself, when listening to the same foreign policy “experts” explaining situations around the world and suggesting policy positions: In light of the facts of today, and the predictions of yesterday, how expert have they shown themselves to be? 

Passing HR 2605 to sunset authorization for the use of force in Iraq is the first step to stopping this bloody war, and the consequent bleeding of our treasuries.  Serious fiscal conservatives will support it, as will those who have been paying attention to foreign policy predictions and reality.

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Posted in Foreign Policy | 148 Comments | Permalink

In Government We Trust? Part 3

Posted by: Ron Paul (September 15, 2008, 12:29 PM)

I’ve discussed just a few benefits of sound money in the last two weeks, and contrasted them to the perils of fiat currency.  Sound money keeps government spending in check, keeps trade fair and honest, which reduces the temptations, and many underlying causes, for governments to wage wars.  It also gives you the peace of mind of knowing that your savings will be able to sustain you in your retirement.

 

So if sound money is such a good thing, what is stopping people from simply trading with each other in gold and silver?  Why are you still being paid in fiat dollars, and why can’t you pay for gas in gold?  The answer is that the government has enacted policies that provide considerable stumbling blocks to such transactions.

 

One of the main stumbling blocks is Federal legal tender laws, which state that government-controlled fiat currency MUST be accepted for many kinds of monetary transactions.  In light of this, Gresham’s Law takes effect.  Gresham’s Law states that bad money drives out good money.  Meaning, if someone is forced to accept your bad money, it is to your advantage to pass it off, like a hot potato, in exchange for something of value.  Any good money you have, you will hoard.  Eventually, real money is driven out of circulation and under people’s mattresses, so to speak.  In the absence of legal tender laws, people are free to accept the medium of exchange of their choice, and are likely to insist on payment in something of real value.

 

Related to legal tender laws, contracts in gold are not enforced.  Meaning if two parties agree to exchange goods or services for gold, and end up in a dispute, the courts will simply settle the dispute in Federal Reserve notes.*  Governments should do very little, in my estimation, but it should enforce contracts and property rights through the courts.  But in this instance it shirks this basic duty, when it comes to gold, as one way to keep control of our economy and the medium of exchange.  One is also expected to pay sales tax on the purchase of gold.  This is as ludicrous as if you paid sales tax at the bank when you converted dollars into quarters!  The IRS also expects you to pay capital gains tax on gold, which is so backwards, since gains on gold really represent decline in the value of the dollar!

 

Legal tender laws should be repealed at the Federal level.  Congress has the Constitutional duty to protect the integrity of our money.  However, since it has passed this duty off, and the Federal Reserve has only debased our currency, Congress should no longer force Americans to do business in dollars if they would prefer to transact in gold, or silver, or cigarettes or seashells, for that matter.  Free people should be free to associate and do business in ways that benefit them.  Instead they are forced to use the unstable dollar to their own detriment, and the benefit the government.

 

*Clarification:  Some astute readers took issue with this sentence.  Because of space limitations for the weekly column, I was not able to elaborate on this further.  While gold clauses have been legally enforceable since the late 1970's the fact remains that disputes over gold clauses might well be resolved in court with a dollar figure calculated in terms of Federal Reserve Notes.  In the recently decided case of 216 Jamaica Ave v. S&R Playhouse, which reversed a district court decision, the court upheld the enforceability of a gold clause, but sent the case back to the district court to decide what obligations the gold clause imposed on the defendant.  It is not inconceivable that this will result in a decision that the value of the "gold coin" referred to could be valued by the court in terms of Federal Reserve Notes, not in terms of ounces of gold.  Furthermore, given the federal government's actions against Robert Kahre (the Nevada businessman who paid his employees at the legal tender face value of gold bullion coins) it is obvious that the government is still waging a war on gold.  Whether either of these cases establishes a precedent remains to be seen.  Additionally, because 31 USC 5103 establishes Federal Reserve Notes as legal tender, it would likely take a court challenge to determine whether a gold clause or legal tender law takes precedence.

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Posted in Monetary Policy | 115 Comments | Permalink

In Government We Trust? Part 2

Posted by: Ron Paul (September 08, 2008, 11:56 AM)

Last week I discussed how sound money contributes to peaceful relationships around the world.  It is not gold, in and of itself that excites me, but the many benefits of sound money.  Another benefit is financial security.

 

Can sound money give you financial security?  There is something very comforting in knowing that what you earn today will retain its purchasing power in the years to come.  Indeed, the same silver dime that bought a loaf of bread in the 1960's can still buy a loaf of bread with its precious metal content – which is worth about $1.00 today.  An ounce of gold has always been about evenly exchangeable for a finely tailored men's suit, which these days is roughly $800.  And in these days of fluctuating gas prices, when priced in gold, oil has been stable.  Meanwhile, since the creation of the Federal Reserve, the fiat dollar has lost 94 percent of its purchasing power.  The erosion of purchasing power rapidly accelerated when it was completely uncoupled from gold in 1971.  This sort of fluctuation in the medium of exchange creates a lot of uncertainty in the marketplace and necessitates that you either take extraordinary defensive maneuvers, or face financial ruin.  Trusting in government for financial security in retirement is not a safe option.  Indeed, a recent study by the Consumer Bankruptcy Project shows that bankruptcies among those 75 and older has more than quadrupled since 1991.  This represents wealth and savings that have been eroded by inflation, and trust in entitlement promises that were more fantasy than reality.  Even with the pittance that social security pays to seniors, it is bankrupt and bringing the economy to its knees.  It is no wonder that many in the younger generations want no part of it, and they should not be forced into a failed system.

 

On the other hand, holding physical gold can defend against aggressive government monetary policies that threaten to inflate away the value of your life savings.  During the hyperinflation in post WWI Germany, what used to be a comfortable nest egg was suddenly the value of a postage stamp.  If one held just a portion of their savings in precious metals, the crisis was greatly softened.   Gold will never be worth nothing, even if the exact price fluctuates.  There is a famous photograph, however, of a German woman during this time period burning piles of tightly bound banknotes to keep warm.

 

Imagine if the money you earned had honest, stable value, or even appreciated like an investment!  No such special measures, like converting dollars to gold, would be required to ensure that your savings would sustain you in your golden years.  That is the way it could be and is supposed to be.  However, the government's thirst for power will not be easily, or cheaply, quenched.  Fiat currency is one tool governments have to extract wealth quietly from the working class.  It is time for the people to wake up to this ruse and look to the Constitution to restore sound currency.

 

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Posted in Monetary Policy | 71 Comments | Permalink

In Government We Trust? Part 1

Posted by: Ron Paul (August 31, 2008, 12:26 PM)

Many who agree with me on a lot of other issues, do not understand my enthusiasm for gold and sound money or why I spend so much time studying and talking about monetary policy.  It's true that I talk about money differently than most, but the fact is sound money offers many benefits.  For example – peace.

 

Can sound money really bring about peace?  Actually, it plays a big part in peaceful international relationships.  Money based on commodities, rather than paper, is not subject to government manipulation, and is a key component to free and honest trade.  History shows that if countries engage in trade with each other, their governments tend to find ways to get along for the same reason you do not kill your customers at your place of business, even if they occasionally annoy you.  If someone outright cheats you, however, you may engage in “war” by taking them to court, for example, and the relationship will sour.  Governments and central banks with unfettered power to manipulate currency also have the ability to cheat their creditors.  One way they do this is to simply create enough currency to pay off debts.  This devalues the currency and “cheats” the recipient out of what they are owed.  It would not be fair if you watered down your product the way our government waters down its currency, so it is not hard to understand, in these simplified terms, why loose monetary policy contributes so much to ill will and war around the world.

 

Sound money, on the other hand, simply is what it is.  Removing governmental power to manipulate money, removes the temptation for government to spend, print and cheat.  Sound money ensures that our government’s spending priorities would be brought into sharp focus and reduced to only what we can afford.

 

Sound money also limits the ability to wage wars of aggression.  Imagine how much more careful Washington would have to be about starting a war if they did not have this financial sleight of hand at their disposal!  Fiat currency allows government do expensive things they should not be doing while paying the bills with cheap money.  The Federal Reserve has lately been auctioning off large amounts of treasury bills as a way to finance the wars in Iraq and Afghanistan, and our crushing entitlement burden.  The resulting devaluation of the dollar is quickly eroding our image as a good trading partner in the world.  As a consequence, there is therefore more talk of economic isolation and war. 

 

This vicious cycle of spending, fighting and inflating is not what Americans want.  It is what the government wants, and it has had to deceive the citizens into allowing and supporting it.  Sound money curbs the government’s ability to engage in these shenanigans and reduces the wars we fight to only truly defensive ones, for which Americans are more than willing to stand and fight.  So in these ways, sound money is very conducive to peace.

 

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Posted in Monetary Policy | 177 Comments | Permalink

Freedom is Golden

Posted by: Ron Paul (August 25, 2008, 12:01 PM)

As the Olympics wind down, I am amazed at how things change every four years.  Many Americans were glued to their televisions to watch the excitement from Beijing, and also heard announcers wax nostalgic with memories of times when the Soviet Union was the USA's biggest competitor for Olympic gold.  There was a time when it was unthinkable that a government as powerful as that of the Soviet Union's could possibly crumble, yet crumble it did.  The irony is that the strength of the Soviet government was also its weakness, as no country, no economic system can remain strong under the crushing burden that is central planning.

 

Central Planning is sold to a hopeful people as a way to solve societal problems, to right wrongs, and bring about perfect justice and equality.  Central Planning promises you everything you are entitled to.  As a bonus, goods and services produced by others are added to the list of commodities that everyone has a "right" to.  Suddenly everyone is entitled to healthcare, housing, education, food, et cetera.  It might sound nice that the state will magically provide all these wonderful things, but these rosy promises mask a dehumanizing, ugly reality.  The other side of these entitlements is that now the doctor, the builder, the teacher, the farmer are slaves to the all-powerful state.  No longer do they serve patients, students, or customers.  They work in complete obedience to the state, their only customer.

 

Central planning will tell you that you are entitled to many things.  Liberty tells you that you are entitled to life, liberty and the pursuit of happiness; to whatever you earn, and nothing that you don't.  While it may seem harsh to some, we must look to basic economic truths and to history to see which model is cruel and which model is kind.

 

The truth is that central planning cannot provide for economic success like freedom can.  Central planning makes promises it cannot possibly keep.  We live in a world of unlimited wants and limited resources.  If you put a massive and powerful government in charge of distributing those resources, it is not a surprise that government and those in bed with government are first in line for those resources.  The poor and the middle class – the most hopeful and trusting – are hurt the most, as the state always underestimates their needs and overestimates their ability to pay taxes and absorb inflation.

 

The Soviet Union's collapse is a dramatic example of the failure of central planning. Americans celebrated this collapse, not only because it meant less competition for Olympic gold, but it provided hope that with the end of the Cold War, our policy makers could drastically reduce overseas commitments and out of control military budgets.  Most especially, we celebrated because with the collapse of Soviet communism it was apparent that liberty, not central planning, is stronger.   Freedom empowers the individual.  Central planning dehumanizes the masses.  There may always be a struggle for power and government, but for this reason, freedom will always win out in the end.  And as we celebrate the accomplishments of our individual athletes in Beijing this year, we must continue to go for the gold here at home, and keep the flames of liberty burning bright.

 

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Posted in Civil Liberties | 87 Comments | Permalink

How Foreign Policy Affects Gas Prices

Posted by: Ron Paul (August 18, 2008, 11:58 AM)

We've heard how the value of the dollar affects gas prices – and indeed the price of everything.  I was pleased that my request for a hearing on such was granted by the Financial Services committee and we were able to hear some very informative testimony.  Certainly domestic policies, regarding off-shore oil drilling bans, ethanol mandates, refining capacity, and CAFE standards are interventionist and harmful enough in the energy market.

 

But how does foreign policy affect gas prices?  One important factor is that oil on the world market has been priced in dollars exclusively since 1973.  Only two leaders have gone against this arrangement - Saddam Hussein in 2000 and more recently Mahmoud Ahmadinejad with the recently opened Iranian Oil Bourse which trades in non-dollar currencies.  But since oil is otherwise exclusively traded in dollars, this means that oil producers have vast amounts of assets held in dollars.  Especially since the War on Terror and the PATRIOT Act, many oil-producing nations and banks are concerned the US government may freeze assets based on flimsy pretexts.  This fear contributes to dollar weakness, and therefore also high oil prices.

 

Recently I and other members of Congress spoke out against H Con Res 362 and exposed this seemingly innocuous bill for what it really is – a call for a blockade and a build up to war with Iran.  Thankfully it has not come to the floor for a vote as I had fully expected it would.  But to even propose legislation like this, and get an alarming 261 cosponsors, makes the oil markets jittery and encourages more capital flight from the dollar.  We only isolate ourselves on the world stage with actions and attitudes like this.  After all, how can it be wise for the rest of the world to bank on America, when we tend to freeze assets and blockade entire countries for no good reason?

 

Another major factor is our intervention in international military conflicts.  These conflicts are often much more complicated, and have more to do with oil than our own leaders are willing to acknowledge.  Too often the side we support points our weapons right back at us down the road.  The best policy is always free trade with all and entangling alliances with none, but instead we isolate ourselves by picking sides and making enemies out of our friends or potential friends.  In the recent conflict with Russia and Georgia, it appears that once again the administration is going to pick sides and send taxpayer money, when we are in a deep recession here at home.  There is no good reason for us to put a dog in every fight around the world.

 

The contributing factors in the price of oil are complicated and legion.  The fact is, it is an immensely valuable resource, and, as our demand for this resource is great, our relationships with world leaders who control it should be handled with reason and intelligence.  However, our interventionist mindset when it comes to foreign policy never ceases to get us into sticky situations, for which we pay a premium at the gas pump.

 

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Posted in Foreign Policy | 95 Comments | Permalink

What's in a Bill Name?

Posted by: Ron Paul (August 11, 2008, 11:56 AM)

Recently Congress passed the American Housing Rescue and Foreclosure Prevention Act., also known as the Housing Bill.  Its passage was lauded by many who are legitimately concerned about foreclosures and the housing market in our country's economy.  I was asked how I could vote against a bill to help American homeowners, but I found this bill to have more to do with helping big banks than helping average Americans.

 

The answer is that there is more to any bill than its name or the headlines surrounding it.  If one only paid attention to bill titles, one could happily vote for almost any bill put to a vote on the floor.  Titles do not tell the complete story of a bill's provisions, and many titles are downright deceptive and come close to emotional blackmail of legislators.  But we cannot afford to be fooled by fancy titles.  The housing bill could perhaps be more aptly named The Big Banking Bailout at Taxpayer Expense Act as large sections of it were written by big banking lobbyists according to Evans and Novak reporter Tim Carney's Capitol Hill sources.  At least that title would be honest.

 

Also, many of these magnanimous sounding foreign aid bills and so-called human rights resolutions have counterproductive and hypocritical language tucked into the fine print. The recent bill on China was a good example.  This resolution calls on China to hold meetings with the Dalai Lama without preconditions, when that is something our own government will not do with Iran.  How our government has the authority to tell China what to do it beyond me, especially when we demand something so hypocritical.  On foreign aid bills and legislation that on the surface seems very charitable, upon closer examination we find strings attached and a lot of manipulation of the marketplace.  Many times, these bills purport to help the destitute, but actually help multinational corporations or prop up dictators that might otherwise be deposed by their people.

 

The other point to take into consideration on legislation and House resolutions is that intentions are not enough.  It is not enough to want to solve a problem with legislation, and name a bill to that effect.  The crafters of the legislation need to demonstrate a clear and honest understanding of the problem, in order to put forward a realistic strategy to solving it.  Too many times, I just don't see that.  Instead I see more taxes, more restrictions, more violations of the Constitution, and more unintended consequences.

 

One shouldn't judge legislation based on titles, good intentions, or what someone says the bill will do.  Imagine if all the legislation in the history of this country actually did what the title of the bills proclaimed they would do.  How very different this country would be!  There would be no poverty, no drugs, no crime.  In fact if it was that easy, Congress by now would have probably repealed the law of gravity, and supply and demand as well, and replaced them with unlimited wealth and given all Americans the power of flight.  What a fanciful world our legislators live in at times!

 

Though I am at times accused of being mean-spirited regarding the many bills I vote against, I don't so much think of my vote as against the legislation, as much as FOR the Constitution, according to my duties as a Congressman.

 

 

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Posted in Unspecified | 121 Comments | Permalink

Washington's Intervention Addiction

Posted by: Ron Paul (August 04, 2008, 01:31 PM)

 One problem with politicians is that when problems they create come to a head, they typically feel this irresistible urge to DO something, rather than to UN-do something, or to simply back off to avoid exacerbating the situation. Too often, that which they end up doing has very little connection to the cause of the crisis, but plays well in the press and superficially makes everyone feel better.  Bills that are rushed through Congress under duress are never studied enough, providing too tempting an opportunity to quietly slip in unrelated provisions that erode freedoms in ways that would never pass as a stand-alone bill.  We famously saw this with the PATRIOT Act, but Washington learned nothing from that.

 

The current housing crisis and the corresponding big government fix are another prime example.  First of all, the so-called solution will actually make the problem worse.  The problem stems from easy credit and a rush to flood the housing and mortgage markets with money. Relaxed or non-existent lending standards led many into mortgages and houses they could not afford.  As more foreclosures hit, the lending institutions will continue collapsing like dominoes under the weight of all the bad paper they underwrote.  Some are reacting and reintroducing lending standards.  Thus the number of buyers in the market for homes is beginning to shrink back to its natural size, and hyper-inflated prices are falling back down to earth.  In these ways, the market is trying to correct itself in the wake of the mistakes government intervention encouraged them to make through easy credit.  However, this correction is causing pain, especially to Wall Street investors and those who bought homes at the top of the market bubble, never expecting it to crash, always assuming they would easily be able to refinance. 

 

Some mistakenly identify the falling home prices as the disease instead of merely a symptom – which they plan to fix with more easy credit and more liquidity to push more unqualified buyers back into the market for homes they still cannot afford.  This is akin to the drug addict identifying withdrawal symptoms as his problem and searching for another fix as his solution.  The cycle continues and the problems compound themselves.  The addiction deepens.

 

Addicts are told the first step to recovery is to admit their problem.  To cure this addiction to intervention we have to honestly admit the problem and once and for all, kick the habit.  That will involve some pain, without a doubt.  There is no easy, painless solution to the mess the disastrous economic interventions of the past have wrought.  The question is – do we allow some lending institutions to collapse, or do we allow the dollar to collapse?  To extend the metaphor, do we endure the temporary discomfort of withdrawal, or do we continue on until there is a fatal overdose?  We can delay the agony, but only for a little while, and then we will all end up paying the price for the mistakes of a few.

 

With the final passage of the Housing Bailout Bill quietly on a Saturday in the Senate, and the President’s signature, our government has unfortunately chosen the latter…

 

 

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Posted in Monetary Policy | 73 Comments | Permalink

The Dangers of Neo-Conservative Economic Policies

Posted by: Ron Paul (July 28, 2008, 01:08 PM)

The dangers inherent in the foreign policy advocated by the neo-conservatives are well known.  While many Americans have become increasingly aware of those dangers, far less attention has been focused on the dangers of neo-conservative economic policies.  This issue is of critical importance right now, because many are mistakenly pointing their fingers at the free market as the culprit behind our current economic plight.

 

There are only a few in elected office who have any real loyalty to free markets and limited government.  The agenda of neo-conservatives in the economy calls for a very active central government.  Indeed, while there are some neo-conservatives who continue to use the rhetoric of limited government, and who oppose increases in the federal income tax as a way to maintain the political benefits that apply to those who talk about free markets, it is now the neo-conservatives who promote fiat monetary policies even more than those on the liberal left.

 

While I have been a strong proponent of cutting taxes on all Americans, and therefore supported the tax reductions offered by President Bush, the neo-cons argue that tax rate reduction alone is the key to “getting the government out of the way” of economic growth.  Moreover, they invariably argue for tax reductions targeted toward the wealthy, and toward multinational corporations.

 

Over the years, I have offered several tax plans designed to assist hard working middle-class Americans to pay for their needs, whether these needs be health-care related, educational or to pay the costs of fuel.  A few years back when I introduced one such bill, a prominent Republican approached me on the House Floor and asked, half in anger and half in amazement “why did you do that?”  Shortly after that, the committee chairman at the time, also a Republican, sent out a release strongly attacking my tax cut bill.

 

So, while the liberal economic agenda includes more taxes and spending, the neo-con economic program simply looks to target some tax cuts to preferred groups, but ignore the economic big picture.  The neo-con economic agenda is to “borrow and spend” and it is that agenda, even more than the tax and spend ways of many liberals, that has cast us in economic peril at this time.

 

Simply, on spending, the neo-cons and the liberals share views, just as they share similar views on foreign policy.  While each side tries to claim the mantle of change, reality is that more of the same is not change.

 

The fiat monetary policy we now follow is the most significant factor contributing to our economic peril, and it is central to the neo-con agenda.  As we hear new calls to empower the Federal Reserve Board, we should be aware that underlying all neo-conservative policies is the idea of monetary inflation.  Inflation is the technique used to pay for the regulatory-state and the costs of policing the world.

 

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Posted in Monetary Policy | 100 Comments | Permalink

Faith-Based Currency

Posted by: Ron Paul (July 21, 2008, 12:13 PM)

The Latin term “fiat” roughly translates to “there shall be”.  When we refer to fiat money, we are referring to money that exists because the government declares it into existence.  It is not based on production or earnings, and not backed by any commodity.  It is solely based on trusting the government.  Fiat money is exchanged in the economy as long as there is faith in the government that issues it.

 

Some are blaming the recent shakeup in the markets to “whining” or financial fear-mongering, which misses the whole point.  History has shown that fiat money, or “faith-based currency” always fails, because when governments claim this power, they always behave irresponsibly.

 

When government has the ability to create and spend all the money it wants, priorities shift, and the concept of budgeting, as most Americans know it, loses all meaning.  Hand a teenager a credit card, and tell him there is no limit and no accountability for what he spends, and the effect would be the same.  You see, this problem is not unique to our government.  It is a predictable outcome based on human nature, and we’ve seen variations of what we are experiencing now happen over and over throughout history.  I didn’t have a crystal ball or a fortune teller when I predicted this 3, 7, or even 30 years ago.  Actions have logical consequences.  The government becomes the reckless teenager with the credit card, and in the end, the taxpaying citizens get the bill.  What happens after that is never pretty.

 

This is why our founding fathers considered, but decidedly rejected the creation of a national central bank.  They understood that governments, even the best of governments, cannot control spending.  Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees.  Every dollar created and spent by government makes the dollars in your pocket worth less and less.   Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.

 

Hard currencies, on the other hand, force governments to remain in check, strictly limited to the revenues they can raise from the country’s economic health.  This is also an incentive for government to stay out of the way of productivity.  The hyper-regulation in today’s economy demonstrates that this is no longer the case.  What does it matter if the economy is crippled and the tax-base eroded, if government can create whatever dollars they need to keep the special interests happy?

 

We have been building economic castles on the sand, and the tide is coming in.  The answer is not to bring in more sand, but to move to more solid foundation.

 

So yes, it is true that many are complaining about our economic trouble, but our economic trouble is not caused by their complaining.  Many are being forced to wake up to the predictable troubles associated with faith-based currency.  As more people notice the hardships, more will lose faith.

 

We are long overdue for a course correction and I can only hope that this awakening translates to a solid approach to currency reform.

 

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Posted in Monetary Policy | 135 Comments | Permalink

Getting Out of Iraq

Posted by: Ron Paul (July 14, 2008, 12:48 PM)

What will it take to get our troops out of Iraq?   The roughly 70 percent of Americans who are firmly against the war often ask this question.  Those in power are reluctant to give conditions, but when they do and those conditions are met, the goal post is quietly moved.

 

Voters were promised, passionately and vehemently, that the new Congress would bring our troops home.  Many were explicitly elected in 2006 under that banner.  But our troops are still overseas, funding has been increased even beyond the administration's wish list, and troop withdrawal has been negotiated away.

 

When things are going badly in Iraq, they say we must stay until the situation improves.  When things improve, they tell us we must stay because our gains cannot be jeopardized.

 

We are told that we must establish a functioning democracy there, and train Iraqi armed forces so they can keep order in our absence.  Iraq now has a Constitution, an elected parliament, and hundreds of thousands of security forces.  The problem now is that their troops are supposedly not trained quite well enough, and that could take many more years.  Defining an adequate training level for Iraqi troops is highly nebulous and its anyone's guess when or how that criteria could be satisfied. 

 

The latest outrage came last week.  For years we heard the administration claim over and over that the Iraqi government wants us there, and is begging us to stay.  On the other hand, all they had to do was ask and we would respect their wishes and leave.  That also has now happened.  Al-Maliki perhaps took his cue from his challenger, al-Sadr, who has been clamouring for us to leave for years.  Popular opinion in Iraq now mirrors that in the United States, with about 70percent of Iraqis wishing us to leave.

 

At the end of the year, our Status of Forces Agreement expires.  Without a new agreement and understanding with the Iraqi government regarding our presence there, we officially become occupiers.

 

Eventually our troops will leave Iraq.  The overwhelming will of the people, in both countries, can't seem to get them out.  Things going well can't get them out.  Things going badly can't get them out.  Iraqis telling us to leave can't get them out.  Perhaps not even the UN can get them out.  My hope is that it does not take the complete collapse of our financial system, but if we don't leave under any other circumstances, economic chaos is inevitable, and will make it impossible to fund the war, even through debt and inflation.

 

We have been financing this war through inflation, and attempting to paper over reality with misleading economic indicators.  The government has changed the methodology of calculating things like CPI and GDP to hide the bad news.  They won't even publish M3, the total money supply statistic anymore.  But reality is hitting the American people at gas pumps and grocery stores, sending more Americans into foreclosure and unemployment lines.  More are hurting while Washington keeps forgetting its promises.  Eventually, this will all come to a head.

Perhaps an even greater fear is that even if our financial trouble doesn't get our troops out of Iraq, moving them over to fight a new war in Iran, will.  Washington should be crystal clear on this very important point – just getting the troops out of Iraq means nothing.  Bringing them HOME means everything, and that is what the people in both countries demand.

 

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Posted in Foreign Policy | 122 Comments | Permalink

Real Change

Posted by: Ron Paul (July 07, 2008, 12:06 PM)

One reason people are unhappy with the way politics and governments operate is that people who run for office are known to “say one thing and do another.”  Thus, we have the call for “change.”  Candidates for high office make frequent use of that word.  Even our House Republican Conference’s recently released slogan highlights that word.

 

Yet, bringing about change is easier said than done.  The American people are aware that government is broken and must be fixed.  They will demand more than lip service as our problems become more severe.

 

Change, then, cannot simply be a word.  It must be the right program, one that gets us out of this mess, not one that just accelerates us down the same treacherous path.  With our economy facing a perilous situation, the need to bring fiscal reform to our government is the cornerstone of the kind of change that is needed.  Real budgetary and monetary reform would signify a true change of direction, instead of merely a change of speed toward the economic cliff we are approaching.

 

Americans realize that their own financial situation is perilous.  The nation as a whole is deeply in debt, having mortgaged the future of our children and grandchildren.  When politicians talk about what they plan to do for future generations, they ought to begin by stating how they will remove the huge debt burden, not how they will find more ways to spend more money they don’t have.

 

In order to allow Americans to pay for their needs, whether for healthcare, education, or basics like food and gasoline, we need to change tax and monetary policies so the American people control more of their own money.  That money needs to stay in the economy, and out of the government money pit.

 

This means we must curb the voracious spending appetite of our federal government.  We need to rein in international commitments, especially the very expensive costs of maintaining a worldwide military presence, as a key first step to restructuring our budget and economy in a fashion that will allow Americans to provide for themselves.

 

We need to take a view of government that better reflects our own experience, as well as the wisdom of our nation’s founders.  There are very few constitutionally authorized federal powers, and returning daily government to this wisdom is real change.

 

Working toward a less intrusive, less expensive federal government focused on defending against overt actions of force and fraud, is the means to bringing about real change.  As we hear the repeated claims of those who wish to cast themselves as agents of change, we will do well to recall that more federal meddling is not a change in direction at all, but just “more of the same.”  We should be repealing programs, not proposing costly new bureaucracies.

 

Change, real change, the only kind of change that will quench the thirst of the American people for a new direction and provide us with the prosperity and security necessary to preserve our Republic as a beacon of liberty, requires bold initiatives designed to move our country away from economic peril by putting faith in free citizens instead of in Washington.

 

 

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Posted in Monetary Policy | 137 Comments | Permalink

Personal Freedoms and the Internet

Posted by: Ron Paul (June 30, 2008, 01:44 PM)

The most basic principle to being a free American is the notion that we as individuals are responsible for our own lives and decisions.  We do not have the right to rob our neighbors to make up for our mistakes, neither does our neighbor have any right to tell us how to live, so long as we aren’t infringing on their rights.   Freedom to make bad decisions is inherent in the freedom to make good ones.  If we are only free to make good decisions, we are not really free.

 

Socialist ideologies blur this line between self reliance and government control because the mistakes of the individual are spread to everyone else.  Thus the government becomes very interested in your decisions and way of life, with the justification that you could make a mistake others will have to pay for.  The end result is, of course, that everyone loses privacy and control over their own lives.  Whether they realize it or not, they are no longer truly free.

 

This week in Congress brought some examples from both sides of the aisle on these issues of freedom and personal responsibility.  We talked about online gambling quite a bit with the markup of some legislation dealing with the Unlawful Internet Gambling Enforcement Act.  Now, I am not someone who enjoys throwing money away, but I am someone who understands issues of freedom and self-ownership.  As such, I strongly support the right of free people to do with their hard-earned money as they please.  Gambling is ultimately a matter of personal choice, and some people find it entertaining.  As long as I am not forced to underwrite their losses, it is none of my business what gamblers do with their time and money.

 

There are those that feel online gambling is morally wrong and financially irresponsible, which I do not argue with, but they also feel that because of this, the government should step in and prevent or punish people for taking part in these activities.  This attitude is anathema to the ideas of liberty.

 

However, most of the same anti-gambling crowd sang an entirely different tune when we discussed giving away free birth control in schools.  All of a sudden, they did not want others making decisions about their lifestyles and families, while the other side felt the need to interfere.  It is interesting that the same group that feels parents have the absolute right and ability to control how and when their kids get birth control, are powerless to monitor their internet activity and must enlist government regulatory assistance to protect against gambling or predators.  Which is it?  Are parents the ones to parent, or not?  Both sides switch their positions based on the subject at hand, but the philosophy of liberty is elegantly simple and consistent. 

 

I can assure you of this – once the government gains a foothold into regulating the internet, even for benevolent reasons, the wonders of the free internet will soon be a thing of the past.  Parents, with modern day technology, are quite capable of monitoring their children’s internet activity.  The internet must remain a government-free zone to maintain its integrity and usefulness to modern society, and that is something for which I will continue to fight. 

 

Posted in Civil Liberties | 121 Comments | Permalink

A Major Victory for Texas

Posted by: Ron Paul (June 23, 2008, 11:44 AM)

June 23, 2008

I am pleased to report that last week we received notice that the Texas Department of Transportation will recommend the I-69 Project be developed using existing highway facilities instead of the proposed massive new Trans Texas Corridor/NAFTA Superhighway.  According to the Texas Transportation Commissioner, consideration is no longer being given to new corridors and other proposals for a new highway footprint for this project.  A major looming threat to property rights and national sovereignty is removed with this encouraging announcement.

Public outcry was cited as the main reason for this decision.  I was very impressed to learn that the TxDOT received nearly 28,000 public comments on this matter, and that some 12,000 Texans attended the 47 public hearings held earlier this year.  They could not ignore this tsunami of strong public opinion against the proposed plans.  I was especially proud of how informed my constituents became on the subject, and how eloquently and respectfully they spoke and conducted themselves, considering how upsetting the plans were for our communities in Texas .

This is a major victory for the people of Texas , and a reminder of what we can accomplish with civic involvement.  The informed and active citizen truly is a force to be reckoned with, as we have seen with the defeat of this proposal.  We must keep fighting the good fight, and remain ever diligent against the encroachments of big government.  We must do this if we wish to maintain our traditional standard of living in this country.  As tempting as it may be to simply live our lives with no regard to government, apathy will inevitably be punished by ever more government intrusion.  That is what this fight was all about.  We can win if we stick together.

However, now is not the time to rest on our laurels.  The bittersweet aspect of this victory is that we had to fight at all.  We took time away from family and friends, doing other things, to attend these meetings, inform others, write letters, post signs and submit our complaints, and we should not have had to.  Government should let us be, if we are peaceful citizens, harming no one.  In a perfect world, government could be trusted to act in the best interests of the people without overwhelming pressure of this kind.  This is not a perfect world.  Constant pressure is needed to keep government in check, and we succeeded this time.  But this will not be the last time citizen efforts and involvement will be required.  We still face many unreasonable encroachments of big government today, from confiscatory, economy-strangling taxation to creeping disregard of the right of habeas corpus and other Constitutional rights, to thousands of nuisance bureaucratic regulations interfering with our every day lives.  We have drifted far from what the founding fathers envisioned for this nation.  Last week was just one victory towards getting back on the right path.  We must continue to hold politicians’ feet to the Constitutional fire.  If I had to guess, they will probably try to implement the NAFTA Superhighway again sometime in the future.

It is a never-ending battle, but it must be fought, and can be won.  I am proud to stand with my constituents in this fight, and in the other fights we have ahead of us.

Posted in Unspecified | 10 Comments | Permalink

Iraq or the Economy?

Posted by: Ron Paul (June 19, 2008, 01:48 PM)

June 16, 2008

What is the importance of the war in Iraq relative to other current issues?  This is a question I am often asked, especially as Americans continue to become increasingly aware that something is very wrong with the economy.   The difficulty with the way the question is often asked relates to the perception that we are somehow able to divide such issues, or to isolate the cost of war into arbitrarily defined areas such as national security or international relations.   War is an all-encompassing governmental activity.  The impact of war on our ability to defend ourselves from future attack, and upon America ’s standing in the world, is only a mere fraction of the total overall effect that war has on our nation and the policies of its government.

The cost of this particular war is enormous, and therefore its of great importance.  There is no single issue that is more important at this particular time.   The war has, of course, made us less safe as a nation and damaged our credibility with allies and hostile nations alike.  Moreover, years of growing deficits have been spurred on by the high price tag of war, and the decision to pay that price primarily by supplemental spending rather than traditional “on-budget” accounting.

War takes what would otherwise be productive economic capacity and transfers both that capacity, and the wealth it would generate in normal, peaceful, times into far less economically viable activities.  It also impacts budget priorities in ways that are detrimental to our nation.  I have often pointed to the fact that we are building bridges in Iraq while they are collapsing in the United States .

All war, but most particularly war funded by monetary inflation, bleeds a country in multiple ways.  Obviously, many of the young people who are in the military literally give their blood, and sometimes their lives, fighting in wars of this type.  Meanwhile, those who do not fight the war, but fund it, are forced to pay both the immediate costs, as well as seeing their long term purchasing power erode, as the twin pillars of debt and inflation are foisted upon the backs of current taxpayers and future generations.  Neither conspiracy nor coincidence explains steep increases in the price of gas as the war drags on.  No, this is simply a reality of the inflationary policies that, among other things, make this war possible.

As people are continually asked to choose whether our nation’s teetering economy or the failed foreign policy of the past several decades is most important as we look forward, it is well for those of us who understand that these two issues are closely linked, to continue to explain this fact to our fellow citizens.  To fix the problem requires a proper diagnosis.

Posted in Foreign Policy, Monetary Policy | 4 Comments | Permalink

Rising Energy Prices and the Falling Dollar

Posted by: Ron Paul (June 19, 2008, 01:47 PM)

June 9, 2008

Oil prices are on the minds of many Americans as gas hits $4 a gallon, and continues to surge.  How high can prices go?  How can we solve these problems?  What, or who, is to blame?

 

Part of the answer lies in understanding bubbles and monetary inflation, but especially the Federal Reserve System.  The Federal Reserve is charged with controlling inflation through interest rate manipulation, however, many fail to realize that creating money, and therefore inflation, is really its only tool.  When the Federal Reserve inflates the dollar as drastically as it has in the past few decades, the first users of the newly created money go in search of investments for their dollars.  They must invest this money quickly and aggressively before it loses value.  This causes certain sectors to expand beyond what would naturally occur in the free market.  Eventually the sector overheats and the bubble bursts.  Overinvestment in dotcoms eventually led to a collapse of the NASDAQ.  Next we had the housing bubble, and now we are seeing the price of oil being bid up in the creation of another new bubble.  Investors are now looking to commodities like oil, for stability and growth as they pull capital out of real estate.  This increased demand for investment vehicles related to oil contributes to driving up the price of the actual product.

 

If the Fed continues with its bubble blowing policies of the past, the new commodities bubble will continue to grow, gas prices will continue to go up, as the value of your dollars go down.  We will see an overinvestment in these commodities as solutions are desperately sought for a supply shortage, which is only part of the problem.  Make no mistake, though, this is not the free market at work.  Government manipulations have added levels of complication and unintended consequences to the marketplace.

 

This is not the time for members of Congress to take political potshots at each other, or to imagine that the free market is somehow to blame.  This is the time to understand and fix problems.  That begins with making sure the decision makers have a firm grasp on the causes of the problems and possible effects of their decisions.  This is absolutely crucial if we want to get it right this time.  That is why I am in the process of calling for hearings on Capitol Hill on how the falling value of the dollar affects energy prices.

 

Governments need to get out of the way and let the people get back to work so that we can get our economy back on stable footing.  Our destructive regulatory environment, confiscatory tax policies, and managed, rather than free trade have chased many businesses overseas.  The bottom line is average Americans are being seriously hurt by these flawed policies, and they are not getting good information about the true dynamics at work.  The important thing now is to get the diagnosis absolutely correct so we can administer the appropriate treatment and move on to a healthier economic future. To do this it is absolutely necessary to address the subjects of central banking and fiat money.

Posted in Monetary Policy | 4 Comments | Permalink

Sowing More Big Government with the Farm Bill

Posted by: Ron Paul (June 19, 2008, 01:45 PM)

June 1, 2008

Recently Congress sent the latest Farm Bill to the president.  The bill features brand new federal programs, expansion of existing subsidies, more food stamps and more foreign food aid.  This bill hits the taxpayer hard, while at the same time ensuring food prices will remain elevated.  The president vetoed the bill, citing concerns over its costs and subsidies for the wealthy in a time of high food prices and record farm income.  Nevertheless, this over-reaching, government-expanding Farm Bill will soon be law.  

The truth is most farmers simply want honest pay for honest work.  However, if the government is providing competing farms with advantages, and one wants to remain a farmer, one must seek a proportional advantage from government.  It is a difficult position for the farmer.  Some are better at qualifying for taxpayers’ largesse than others as evidenced by the fact that more than 60 percent of the subsidies go to just 10 percent of recipients, edging out the small family farm.  This entire system is unfair and demoralizing.  It disproportionately benefits big agribusiness at the expense of struggling family farms.

Third world countries also lose with these continued government manipulations.  Agricultural subsidies lead to overproduction, which leads to foreign food aid as a form of dumping.   By “dumping” government-created agricultural surpluses, agrarian economies are artificially kept in a constant state of economic depression.  The would-be third world farmer cannot compete with “free” grain, thus he and his countrymen remain perpetual beggars rather than competitive producers.  Also, by keeping food prices high, we keep more of our own citizens dependent on government food stamps, instead of paying fair market prices for food.

Free trade helps farmers and consumers much more than this convoluted system of subsidies, surpluses and central planning.  Newly opened markets would create increased demand for what we produce.  There is absolutely no reason we trade with China , yet not with Cuba .  With energy and transportation prices as high as they are, opening up trade with a country as close as Cuba just makes sense.  The recent power shift from Fidel Castro to his brother Raul, and the somewhat positive steps he has taken, provides an opportunity to lift the embargo.  

Removing unreasonable, confiscatory tax policies would also make good farm policy.  We need to permanently repeal the estate tax, which would again take a devastating 55 percent out of family farms upon death of an owner.  This tax will force the sale of many family farms, and further huge corporate agriculture.

Those who believe federal farm programs benefit independent farmers, should take note that after 70 years of this type of government intervention, small farms continue to struggle while large corporate farms control an ever-increasing share of the agricultural market.  Subsidies for agribusiness should be stopped and the free market should be allowed to work.  With commodity and food prices on the rise, Congress had an opportunity to scale down government controls and taxpayer funding of agriculture.  Instead, despite the warning sent by an 18 percent opproval rating, Congress stubbornly opted for more of the same.

Posted in Unspecified | 5 Comments | Permalink

A Salute to Veterans

Posted by: Ron Paul (June 19, 2008, 01:43 PM)

May 25th, 2008

Most of my efforts on Capitol Hill are focused on reducing the federal government’s size and scope, but I make an exception for a very important group of people.  Our nation’s men and women in uniform commit a selfless act of patriotism when they take up arms in defense of our country.  As a veteran myself, I salute all those currently serving, or who have served in our armed forces.  Our nation owes them a debt of gratitude for their sacrifices, their courage, their time away from friends and family, and the dangers they undertake.  This Memorial Day we honor our soldiers and vets, we remember those who never came home, or who have since passed on.  Above all, we acknowledge our respect for all who have served in the military.

Congress has considered several bills this past week that would affect veterans.  Many of the measures are very positive.  I applaud efforts to shore up health care for veterans, and make sure that veterans know about the services available to them.  I strongly support improving educational opportunities for veterans.  I also believe a pay raise is well-deserved, and long overdue for our men and women in uniform.  These benefits constitute their pay for serving our country. 

What I do not support is inserting immoral, unconstitutional provisions into veterans’ bills.  For example, HR 6081 the Heroes Earnings Assistance and Relief Tax Act, in addition to providing important tax benefits for soldiers, sends the IRS after civilians who move overseas.  This method of funding is actually a slap in the face to our soldiers who vow to keep us free.  Afterall, how free are we, if we are not really free to leave?   Congress should not use the military as an excuse to behave tyrannically.

I was pleased with several of the veterans bills passed this past week, but more needs to be done.  There are many other bills that should be passed dealing with veterans health care, how we treat disabled vets, and forgiving debts to the United States of fallen soldiers.  We need to keep in mind younger generations who will someday face the choice of whether or not to enlist.  They are watching to see how well we keep our promises.  As it stands, our military is being rapidly depleted and exhausted by the continued, unconstitutional wars being fought in Iraq and Afghanistan .  This problem must be addressed. 

This Memorial Day, I thank all our soldiers who have fought so bravely for our country.  I will continue to work hard in Congress to ensure they are treated with dignity, and receive the compensations they have been promised and deserve.  They have given their best for this nation, and we should respond in kind.

Posted in Unspecified | 1 Comments | Permalink

The Economy: Another Casualty of War

Posted by: Ron Paul (May 19, 2008, 04:37 PM)

This week, as the American economy continued to suffer the effects of big government, the House attempted to pass two multibillion dollar "emergency" spending bills, one for continued spending on the war in Iraq , and one increasing spending on domestic and international welfare programs.  The plan was to pass these two bills and then send them to the president as one package.  Even though the House failed to pass the war spending bill, opponents of the war should not be fooled into believing this vote signals a long term change in policy.  At the end of the day, those favoring continued military occupation of Iraq will receive every penny they are requesting and more as long as they agree to dramatically increase domestic and international welfare spending as well. 

 

The continued War in Iraq and the constant state of emergency has allowed Congress to use these so-called "emergency" bills as a vehicle to dramatically increase spending across the board--including spending that does not meet even the most generous definition of emergency.  For example, the spending proposals currently being considered by Congress provide $210 million to the Census Bureau and $4 million for the Bureau of Alcohol, Tobacco, and Firearms.  $4.6 billion is requested for the closing of military bases, but not any of the more than 700 bases overseas – but bases here at home!  Another $387 million would go to various international organizations and $850 million more just in international food aid - all this when food prices are skyrocketing here and American families are having a hard time making ends meet.  Because this spending will be part of "emergency" measures, it will not count against debt ceilings, or any spending limits set by Congressional budget resolutions, and does not have to be offset in any way.

 

Explosive growth of government is just another tragedy of this war.  The "bipartisan" compromises made in Washington are at the expense of the taxpayer, not in the interest of fiscal responsibility, or peace.  The taxpayer loses and government grows.

 

The bottom line is that our dollar is falling, the economy is in rough shape, and government spending is wildly out of control.  Congress argues over relatively minor details, instead of dramatically changing our flawed foreign policy.  We need to bring our troops home, not only from Iraq and Afghanistan , but from South Korea , Germany , and the other 138 countries where we have troops stationed.  Our foreign policy of interventionism is not only offensive to others, inviting further terrorist attacks, but it is ruining our economy as we tax, borrow and print the money to pay the bills of our empire.  The economy and ultimately the American people suffer because Washington is refusing to adopt more sensible and constitutional policies.

 

Squabbling between those who favor increased welfare and those who favor increased warfare has giving the American people a temporary reprieve from having to bear the burden of yet another dramatic increase in government this week. However, as early as next week a compromise could be reached that expands both government warfare and welfare. As congressional approval ratings drop to 18 percent according to a recent Gallup poll, the American people are telegraphing that Congress is taking the country in the wrong direction.  Our government must stop bankrupting the country so that we can get back on track to a peaceful, prosperous future.

Posted in Unspecified | 2 Comments | Permalink

Big Government Responsible for Housing Bubble

Posted by: Ron Paul (May 19, 2008, 04:36 PM)

The House passed two bills attempting to rehabilitate the housing and mortgage market this week.  There doesn't seem to be any shortage of criticism and blame for the bad decisions, and rightly so.  Lenders and banks do share much of the blame for the overheated market.  Lending standards were relaxed, or even abandoned altogether, creating an exaggerated pool of homebuyers that led to ballooning home prices that many, especially real estate investors, expected to continue forever.  Now that the bubble has burst, the losses are staggering. 

However, many in Washington fail to realize it was government intervention that brought on the current economic malaise in the first place.  The Federal Reserve’s artificially low interest rates created the loose, easy credit that ignited a voracious appetite in the banks for borrowers.  People made these lending and buying decisions based on market conditions that were wildly manipulated by government.  But part of sound financial management should be recognizing untenable or falsified economic conditions and adjusting risk accordingly.  Many banks failed to do that and are now looking to taxpayers to pick up the pieces.  This is wrong-headed and unfair, but Congress is attempting to do it anyway.

These housing bills address the crisis in exactly the wrong way, by seeking to hide the problem with more disastrous government bail-outs and interventions.  One measure, HR 5830 the Federal Housing Administration (FHA) Housing Stabilization and Homeowner Retention Act would allow the FHA to guarantee as much as $300 billion worth of refinanced home loans for those facing threat of foreclosure.  HR 5818 the Neighborhood Stabilization Act, would provide $15 billion in loans and grants to localities to purchase and renovate foreclosed homes with the object of then selling or renting out those homes.  Thankfully, President Bush has vowed to veto both of these bills.  It is neither morally right nor fiscally wise to socialize private losses in this way.

The solution is for government to stop micromanaging the economy and let the market adjust, as painful as that will be for some.  We should not force taxpayers, including renters and more frugal homeowners, to switch places with the speculators and take on those same risks that bankrupted them.  It is a terrible idea to spread the financial crisis any wider or deeper than it already is, and to prolong the agony years into the future.  Socializing the losses now will only create more unintended consequences that will give new excuses for further government interventions in the future. This is how government grows - by claiming to correct the mistakes it earlier created, all the while constantly shaking down the taxpayer.  The market needs a chance to correct itself, and Congress needs to avoid making the situation worse by pretending to ride to the rescue.

Posted in Unspecified | 3 Comments | Permalink

Big Government Responsible for High Gas Prices

Posted by: Ron Paul (May 19, 2008, 04:35 PM)

In the past few months, American workers, consumers, and businesses have experienced a sudden and dramatic rise in gasoline prices. In some parts of the country, gasoline costs as much as $4 per gallon. Some politicians claim that the way to reduce gas prices is by expanding the government’s power to regulate prices and control the supply of gasoline.  For example, the House of Representatives has even passed legislation subjecting gas stations owners to criminal penalties if they charge more than a federal bureaucrat deems appropriate. Proponents of these measures must have forgotten the 1970s, when government controls on the oil industry resulted in gas lines and shortages. It was only after President Reagan lifted federal price controls that the gas lines disappeared.

Instead of imposing further restraints on the market, Congress should consider reforming the federal policies that raise gas prices. For example, federal and state taxes can account for as much as a third of what consumers’ pay at the pump. The Federal Government’s boom-and-bust monetary policy also makes consumers vulnerable to inflation and to constant fluctuations in the prices of essential goods such as oil. It is no coincidence that oil prices first became an issue shortly after President Nixon unilaterally severed the dollar’s last link to gold.

Basic economics says that when government restricts the supply of a good, the price will increase. Yet Congress continues to reject simple measures that could increase the supply of oil. For example, Congress refuses to allow reasonable, environmentally sensitive, offshore drilling. Congress also refuses to remove the numerous regulatory hurdles that add to the prohibitively expensive task of constructing new refineries. Building a new refinery requires billions of dollars in capital investment. It can take several years just to obtain the necessary federal permits. Even after the permits are obtained, construction of a refinery may still be delayed or even halted by frivolous lawsuits.  It is no wonder that there has not been a new refinery constructed in the United States since 1976.

Last year, in order to provide the American people with relief from high oil prices, I introduced the Affordable Gas Price Act (HR 2415). This legislation protects the American people from gas price spikes by suspending the federal gas tax whenever the national average gas price exceeds $3.00 per gallon. The Affordable Gas Price Act also expands the supply of gasoline by repealing the federal moratorium on offshore drilling, including in the ANWR reserve in Alaska . HR 2415 also provides tax incentives and protection from nuisance lawsuits for those seeking to build new refineries. Finally, HR 2415 authorizes a federal study on the link between our nation’s monetary policy and the price of oil.

The free market can meet the American people’s demand for a reliable supply of gasoline as long as government does not distort the market through excessive taxation and regulation. Therefore, Congress should lower prices gas prices by pursuing an agenda of low taxes, regulatory relief, and sound money by passing legislation such as my Affordable Gas Act.

Posted in Unspecified | 1 Comments | Permalink

Politicizing Pain

Posted by: Ron Paul (May 19, 2008, 04:34 PM)

K.K. Forss does not claim medical marijuana solves all his problems.  His pain from a ruptured disc in his neck is debilitating.  He is unable to go to work or to the First Baptist Church he used to attend because of the pain and muscle spasms.  Taxpayers through Medicare spend over $18,000 a year on his various medications.  Half of those drugs are strong narcotics.  The other half address the various side-effects brought on by the first half, such as nausea, heartburn, heart palpitations, difficulty sleeping, and muscle spasms. 

No, marijuana would not completely address all his pain, but it made a tremendous difference in the quality of his life when he tried it for over a year.  It helped him regain 38 pounds he had lost.  It calmed his muscle spasms and helped him sleep. In short, it alleviated many side effects and greatly reduced his need for other expensive medications.  Mr. Forss estimates that being allowed to use medical marijuana would save taxpayers at least $12,000 a year in medications he would no longer need.  He would also be able to work occasionally and attend some church services.

Scientists at the University of California at Davis recently completed a study that backs up Mr. Forss’s experience, finding that cannabis demonstrates significant relief of neuropathic pain.  Many in government call for more studies while people like K.K. Forss suffer.  More studies will not change what many patients already know, and that is for some, medical marijuana helps their pain.  But over-reaching government gets in the way.

K.K. Forss lived in constant fear of federal and state officials so he eventually stopped taking medical marijuana and switched to his more rigorous and expensive pill regimen.  Presently, twelve states have passed legislation allowing marijuana, under certain conditions, to be prescribed legally by doctors for patients who could benefit from it.  K.K. Forss lives in Minnesota, where it is not yet legal.  However, even if it is legalized by the state, Mr. Forss will still have plenty to fear from the Federal government, as cannabis dispensaries and clinics that operate under these state laws are still under fire from the Drug Enforcement Administration. 

In other words, the federal government sees fit to use our tax dollars to raid state sanctioned healthcare clinics, to imprison and fine patients and operators, in order to compel people like Mr. Forss to be bedridden and overmedicated at great taxpayer expense every single day.

The Federal government should recognize that states have the authority to decide these issues.  This affords all states the opportunity to see which policies are most beneficial. As a Congressman and a physician, I strongly advocate that healthcare decisions should be made by doctors and patients, not politicians or federal agents, which is why I am an original co-sponsor of the recently introduced “Medical Marijuana Patient Protection Act” which would bar the Federal government from intervening in such doctor/patient relationships that violate no state law.

The bottom line is that K.K. Forss should be treated as a free American.  Mr. Forss is one of many who would like to use marijuana medicinally because it helps him.  Politicians and bureaucrats have no right to interfere.

Posted in Unspecified | 3 Comments | Permalink

The Double Trouble of Taxation

Posted by: Ron Paul (April 21, 2008, 04:37 PM)

Posted in Unspecified | 4 Comments | Permalink

No Sunlight on the Omnibus

Posted by: Ron Paul (March 27, 2008, 02:11 PM)

One Christmas tradition Congress could do without is the broken process of passing the annual Omnibus Spending Bill, which we recently did right before the holiday recess.

Every December Congress fights and argues over spending and never seems to be able to pass the necessary appropriations until the very last minute.  There is panic and threats of government shut downs and reduction in essential services.  And they always threaten the essential services, as if there is no waste they could possibly eliminate instead.  This past December, right on cue the administration warned about dire civilian defense department layoffs if the money didn't come soon.

And so at the very last minute the Omnibus was rushed through in a whirlwind, just in time to save the day.  Members of Congress had less than 24 hours to read the nearly 3,500 page bill before a vote was taken.  The bill was supposedly much too important to waste time reading it.

I feel differently.  I feel the important bills are the ones we should take especial care to closely examine.

However, we are led to believe that if the Omnibus bill failed, horrible things would have happened.  But the situation is a setup that ensures our government spending balloons every year just as the elites and special interests dictate.  The vast majority of Members of Congress don't actually know what the money is being spent on until after passage and by then it is too late.

To address this flawed and corruptible process I have proposed a very simple change called the Sunlight Rule, which mandates that bills be presented to Congress and staff for review in their final form no less than 10 days before they come to the floor for a vote.  This would allow the representatives of the American people time to read the bills before having to make a decision on them.  Every now and then you hear criticisms of congressmen and women for not reading the bills.  That is a problem, however in cases like the Omnibus spending bills, a few hours is not nearly enough time to comb through and evaluate the hundreds of pages they contain.  The rules do not currently specify any amount of time that must be allotted for Congress to read or deliberate any legislation before a vote.  That needs to change.

Congress should read the bills.  But to do that requires an appropriate amount of time.  More appropriately phrased, Congress should be ALLOWED to read the bills.  And no member of Congress should, in good conscience, vote affirmatively on a bill they haven't fully analyzed.

I am hoping that in the New Year more of my colleagues will resolve to take a stand for honesty and due diligence in representing the people of this country and that we can enact the Sunlight Rule.  With it, we will be a wiser, more open Congress and our decisions in Washington will be more deliberative and fully informed as they ought to be.

Posted in Unspecified | 0 Comments | Permalink

Legislative Forecast for 2008

Posted by: Ron Paul (March 27, 2008, 02:11 PM)

Congress is re-convening this coming week and I would like to take this opportunity to give my legislative forecast for the coming year.  Here are a few things we can expect to see from Washington .

First and foremost, we will see ramped up spending for the warfare/welfare state.  There is no resolution or end in sight on the Iraq occupation.  While the American people try repeatedly to communicate to Washington that enough is enough, there still remains little political will in Washington to bring the troops home.  The war will continue to require mountains of taxpayer and newly printed dollars, and our economy will sink under the burden.  If we are manipulated into a second war, the effects on our economy will be truly devastating.  Welfare and entitlement programs will also be ramped up as the economy flounders and budgets in American households are strained.

This leads me to my next forecast of more federal bailouts for the housing sector.  Efforts by the Federal Reserve to stave off recession will have the net effect of only blowing the bubble bigger, making the crash that much more painful when it inevitably comes.  The malinvestments caused by easy credit in the housing industry will be prolonged by more easy credit.  New programs and laws will be enacted to prop up housing, all with a falling dollar, devalued by continued foreign interventions.  The crisis in the housing market will spread and I’m afraid we are in for some rough economic times.

Moreover, the government will require more money than ever this year, and as funding options run out, taxes will go up.  Expect stealth tax increases on consumer goods, perhaps airline tickets or cigarettes, and increased government fees here and there.  Ironically total revenues will probably fall due to a weakened economy.  The new programs started to “help” the country will require extra money wherever the government can squeeze it out of you, unfortunately it will be at exactly the moment you can least afford it.   Since the Democrats enacted “pay-as-you-go” rules for new legislation, cutting taxes to give relief during recession will be bureaucratically next to impossible.  In spite of that, I will continue the uphill battle for tax relief.

Last, I expect, in spite of rhetoric to the contrary, we will see more federal control of education as Congress prepares to reauthorize No Child Left Behind.

If this is indeed the agenda of Congress, let us hope that there is not nearly enough time to accomplish it all this year.

Posted in Unspecified | 0 Comments | Permalink

Constitutional Responses to Terrorism

Posted by: Ron Paul (March 27, 2008, 02:10 PM)

It has been over 6 years since the atrocities of September 11 were committed and there are still some very basic measures that need to be taken to bring the perpetrators to justice and make America safer.  I have proposed legislation to help with these efforts and will continue to fight in Congress for the safety and security of the American people.

My legislation entitled The Marque and Reprisal Act of 2007 (HR 3216) makes the surgical strike option available to the President in our mission to capture Bin Laden.  Our military has been pursuing him without result for far too long now, and it is high time ALL constitutional tools were utilized in the hunt for this dangerous madman.  As an American it sickens me to know that Bin Laden and top leaders of al Qaeda remain at large and thumbing their noses at us, while we unravel the sacred fabric of our constitution out of fear.  It is Osama Bin Laden and the perpetrators of terrorist attacks that ought to be afraid of us, not the other way around.  The answers are found in the Constitution.  We should boldly root out the perpetrators and not let them get away with their crimes against us.  As the home of the brave we should use Letters of Marque and Reprisal to bring Bin Laden to justice. 

Also, we need to take serious steps to prevent terrorists from gaining easy access to targets on our soil.  Quite alarmingly, even with the knowledge that the 19 terrorist hijackers entered our country legally, and that 15 of them were from Saudi Arabia , student visas from terrorist sponsoring countries are still far too easily obtained.  In a baffling move President Bush struck a deal with Saudi King Abdullah in 2005 to allow 21,000 more Saudi young men into the US on student Visas.  Of course, not all students from terror sponsoring countries are terrorists, but I place a higher premium on the security of the American people than the convenience of citizens of hostile countries.  We should not be making the goals of would-be terrorists easier to accomplish, but rather should be vigilant about defending against enemies at every turn.  They should not be slipping through our doors so easily, using our immigration laws against us, and that is why I proposed the Terror Immigration Elimination Act (HR 3217) to toughen standards for VISAS from countries on the State Department's list of terrorist sponsoring countries in addition to Saudi Arabia .  Just as you decide who to invite to a dinner party in your home, we should be in charge of who we allow in this country, without apology.

A lot has been done to fight the War on Terror and much of it has been misdirected, but there are some tools still needed and more progress to be made.  My bills The Marque and Reprisal Act of 2007 and The Terror Immigration Elimination Act are logical steps in the right direction.

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Economic Stimulus Concerns

Posted by: Ron Paul (March 27, 2008, 02:07 PM)

This past week in Washington there has been much talk about the economy.  It seems by their actions the leadership and the Fed is finally willing to admit we have a problem, and we need to do something about the economic mess we are in.  This is a good thing.  However, they are still not being honest about the root cause of our impending crisis and want to deal only with symptoms, not the disease.

There are some positive aspects of the highly lauded economic stimulus package that has been negotiated.  I am in favor of taxpayers getting some of their money back, however temporary tax cuts and one-time rebates will not “fix” the economy.  What we desperately need right now is real deep significant tax cuts that are enabled by big spending cuts and reduction of government waste that is so rampant.  Unfortunately, too many in Washington still believe we can spend our way into prosperity, which does not work and never has.

Countries build wealth through robust economic environments, in which jobs are created and businesses can operate at a profit and grow.  When taxes bleed away profits and burdensome regulation hamstrings operations, our businesses and our jobs go overseas.  The United States must foster a competitive business environment once again.

There are a few ideas out there for economic stimulus that I do support, such as making permanent President Bush’s tax cuts.   I have also signed on as one of 49 original cosponsors of the Economic Growth Act of 2008 which will provide actual economic stimulus through private sector tax relief and job-creating business incentives.  This plan features

• Full immediate expensing for major business asset investments
• Reducing the top corporate tax rate from 35% to 25% to be aligned with average rates  in Europe
• Indexing the capital gains tax for inflation
• Cutting and simplifying the corporate capital gains rate

Enactment of these dramatic tax cuts will free up money so employers can start hiring again.  I would like for the unemployed to have the satisfaction of having a job again so the standard of living of the American family will go up.  And even more than a one-time miniscule rebate check, I want you to keep more of your own money in the first place.

Sending out checks and cutting interest rates yet again is merely a shot in the arm when in actuality, the economy needs major surgery.  I look forward to working with my colleagues in Congress to provide major tax relief to the American people.

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Paving Paradise

Posted by: Ron Paul (March 27, 2008, 02:06 PM)

The Constitution guarantees Americans the right to be secure against all unreasonable seizures.  My home state of Texas is unfortunately planning on some very unreasonable seizures of land with the monstrous Trans Texas Corridor highway project.  The TTC plans call for a highway to cut through about 4,000 Texas miles, and with separate rail lines for passenger and freight, a multi-lane highway with separate truck lanes, utility and cable easements, this highway could be as wide as 1200 feet across.  In the end this project would consume something like half a million acres of land in Texas .  However, since the exact path of the road has not been determined, it is putting much more acreage in jeopardy, and in limbo.

Taking land is destructive enough.  But the perpetual threat of taking an undetermined amount of land is hanging over the heads of millions of Texans and putting their lives at a standstill.  Land is a store of wealth and a source of stability.  This highway project is tragically threatening that for so many Texans.

The principle of private property is the cornerstone to a free and prosperous society.  In situations where a colossal government land grab is a distinct possibility, investment or improvement becomes more risky with an uncertain future and tends not to happen.  How do you sell land that may or may not be taken by the government at some point in the not too distant future?  Who would buy it?  How do you cultivate or build on, or even near, land that may or may not be paved over and turned into a massive, noisy thoroughfare in a few years?

Even more insulting is the distinct possibility that, while the road will collect tolls and fees, making a private foreign firm billions of dollars in revenue, the costs of building it could be heavily borne by taxpayers.  So the costs will be socialized and the profits privatized.  Public-private partnership indeed!

From Washington I have voiced my staunch disapproval of taking these hard-working taxpayers’ land for a private toll road, by introducing legislation (HR 5191) that simply states, “No Federal funds appropriated or made available before, on, or after the date of enactment of this Act may be used by a unit of Federal, State, or local government to carry out the highway project known as the 'Trans-Texas Corridor'.”  I am working hard in Congress to make sure that no Federal funding is used to undermine property rights in this way.

We should be focusing on guarding and securing our borders for the protection of the American people.  Instead we are paving the way for more and more people to cross the border as comfortably as possible.  And taking the family farm to do it.  It is an absolute outrage.

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Second Amendment Battle in DC

Posted by: Ron Paul (March 27, 2008, 02:06 PM)

As a United States Congressman, I take my oath to uphold all of the Constitution and the Bill of Rights very seriously. Unfortunately, too many in Washington DC believe they can pick-and-choose which provisions of the constitution they can uphold. For example, many politicians, judges, and bureaucrats believe they have the power to disregard our right to own guns, even though the second amendment explicitly guarantees the people's right to "keep and bear arms."
 
Like the Founding Fathers, I believe that the right to keep and bear arms is fundamental to a free society.  Where law-abiding citizens are most freely allowed to defend themselves, communities are safer, while crime rises when law-abiding people's access to firearms is restricted. Gun laws only disarm those who respect the law.  Those with criminal tendencies do not turn in their weapons and reform their ways because government bureaucrats enact statutes that tell them to.  Gun control laws turn peaceful citizens into sitting ducks for criminals to prey upon.
 
Ironically, one of the most draconian gun laws in the nation is in the nation's capital. Banning guns did not make DC safer.  In fact crime in DC rose after the gun ban went into place!  Fortunately, last year, a federal court struck down DC's gun ban in the case of DC v. Heller.  This is the first time in years a court found a gun control law violated the second amendment. However, victory is not secured.  The city of DC has appealed and the Supreme Court has agreed to hear the case. If the lower court's decision is upheld, law abiding citizens should once again be allowed to defend themselves in DC and I would expect it to become a much safer city.  It would also set a very positive precedent that could affect gun laws all over the country.
 
However, a Supreme Court decision that the District of Columbia 's gun laws are a "reasonable" infringement on constitutional rights could severely setback the gun rights movement.
 
This is why I have signed on to a brief headed by Texas Senator Kay Bailey Hutchison and signed by a majority of Congress asking the Supreme Court to uphold the lower court's decision and take a stand for stricter standards of constitutional review for gun laws. I am pleased to work with Senator Hutchison, and so many of my other colleagues, on this important issue. As a member of the Second Amendment Caucus, I will continue to work with those of my colleagues who support gun rights and grassroots activists to defend the Second Amendment Rights of Americans.

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On Five Years in Iraq

Posted by: Ron Paul (March 27, 2008, 02:05 PM)

Five years ago last week, the US  military's "shock and awe" campaign lit up the Baghdad  sky. Five years later, with hundreds of thousands of Iraqis and nearly four thousand Americans dead, we should pause and reflect on just what has been gained and what has been lost.

From the beginning, the march to war was paved with false assumptions and lies. Senior administration officials claimed repeatedly that Iraq was somehow responsible for the attacks of September 11, 2001. They claimed that Iraq had weapons of mass destruction. They manipulated the fear of the American people after 9/11 to further a war agenda that they had been planning years before that attack. The mainstream media was complicit in this war propaganda.

Nearly ten years ago, long before 9/11, I requested the time in opposition to the fateful Iraq Liberation Act of 1998, where I then stated on the Floor of the House of Representatives, "I see this piece of legislation as essentially being a declaration of virtual war. It is giving the President tremendous powers to pursue war efforts against a sovereign Nation." Less than five years later we were invading Iraq .

Five years into the invasion and occupation of Iraq , untold hundreds of thousands of Iraqis are dead; some two million Iraqis have fled the country as refugees; and the Iraqi Christian community – one of the oldest in the world – has been decimated more completely than even under the Ottoman occupation or the rule of Saddam Hussein.

On the US side, nearly four thousand Americans have lost their lives fighting in Iraq and many thousands more are horribly wounded. Our own senior military officers warn that our military is nearly broken by the strain of the Iraq occupation. The Veterans Administration is overwhelmed by the volume of disability claims from Iraq war veterans.

A study by Nobel Prize economist Joseph Stiglitz concludes that the cost of the war in Iraq could be at least $3 trillion. The economic consequences of our enormous expenditure in Iraq are beginning to make themselves known as we fall into recession and possibly worse.

Iraq war supporters claim that the "surge" of additional US troops into Iraq has been a resounding success. I am not so confident. Under the "surge" policy the United States military has trained and equipped with deadly weapons those Iraqi militia members against whom they were fighting just months ago. I fear by arming and equipping opposing militias we are just setting the stage for a more tragic and dangerous explosion of violence, possibly aimed at US troops in Iraq . There is no indication that the Iraqi government has made any political progress whatsoever.

The sooner we withdraw the better.  The invasion and continued US occupation has strengthened both Iran and Al-Qaeda in the region.  Continuing down the road of a failed policy will only cost more money we do not have and more lives that should not be sacrificed.  Interventionism has produced one disaster after another. It is time we return to a non-interventionist foreign policy that emphasizes peaceful trade and travel and no entangling alliances. We can begin by withdrawing from Iraq immediately.

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Making a Recession Great

Posted by: Ron Paul (March 27, 2008, 02:04 PM)

House Democrats recently adopted a budget with massive tax hikes, many of which are directed at those Americans who can least afford them.  By allowing the Bush tax cuts to expire in 2010, this budget will raise income taxes not only on those in the highest income brackets, but raises the lowest bracket from 10 percent to 15 percent is well.  Estates would again be taxed at 55 percent .  The child tax credit would drop from $1000 to $500.  Senior citizens relying on investment income would be hurt by increases in dividend and capital gains taxes.  It's not just that the Democrats want to raise taxes on the rich.  They want to raise taxes on everybody.
 
The problem is, policing the world is expensive, and if elected officials insist upon continuing to fund our current foreign policy, the money has to come from somewhere.   The wars in Iraq and Afghanistan have already cost us over $1 trillion.  The Democrats' budget gives the President all the funding he needs for his foreign policy, so one wonders how serious they ever were about ending the war.  While Democrats propose to tax and spend, many Republicans aim to borrow and spend, which hurts the taxpayer just as much in the long run.
 
Supporting a welfare state is expensive as well.  Over half of our budget goes to mandatory entitlements.  The total cost of government now eats up over half of our national income, as calculated by Americans for Tax Reform, and government is growing at an unprecedented rate.  Our current financial situation is completely untenable, and the worst part is, as government is becoming more and more voracious, the economy is shrinking.
 
The bottom line is that Washington has a serious spending addiction.  While both parties debate how to raise the revenue, both parties seem happy to spend over $3 trillion of your money in various ways. While some in Washington criticize the war in Iraq, very few are criticizing the interventionist mindset that got us into the war in the first place.  Many so-called "Iraq War critics," criticize this administration rather than truly opposing the decades old policies that led to war.  They claim they will eventually get the troops out of Iraq, but the danger is that they simply plan to move them around to other countries, not bring them home.  The American people want peace.  Minding our own business is the best way to achieve it.  Not only is it also a whole lot cheaper, but free trade and friendship with other countries benefits all involved. 
 
This spending spree is exactly the wrong policy for an economy on the brink of recession.  History has shown that all empires eventually crumble under a worthless currency and with an exhausted military.   Since too many of our nation's leaders haven't taken the time to learn from history, we are seeing mistakes repeated through recently enacted policies such as the new House budget.

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Can Foreign Aid Save Africa?

Posted by: Ron Paul (March 27, 2008, 02:04 PM)

Congress is poised to pass the President's Emergency Plan for AIDS Relief (PEPFAR) authorizing up to $50 million in unconstitutional foreign aid.  The bill passed out of the Foreign Affairs Committee with a bipartisan agreement to nearly double the President's requested amount.  It is always distressing to see officials in our government reach across the aisle to disregard Constitutional limitations.

Much of this aid will run through government-to-government channels and will be vulnerable to corruption.  Some of the aid will be sent to faith-based organizations who, along with accepting government largess, will now be subject to governmental controls and will soon become more dependent on taxpayer funding than private funds.  If they accept the aid, they must be careful of the vague language regarding what types of programs they can run.  For example, the requirement that 33 percent of any funding received must go toward abstinence-only programs has been dropped and replaced with a 50 percent requirement toward behavior change.  Many humanitarian organizations are incensed by the politicized requirements placed on their work, and feel they are being forced to continue failed programs at the expense of more effective ones.

The obvious question remains:  Why are politicians in the United States deciding what is best for people in Africa ?  And why are taxpayers in the United States being forced to fund –for example - family planning facilities that perform abortions?

In fact, Afrobarometer, a leading source of data on public attitudes in Africa asked Africans what their main developmental concerns were.  They found that Africans are much more concerned about jobs, agriculture and basic infrastructure than they are about health issues like AIDS.

Africans should decide what is best for Africa .  American taxpayers should decide what charities deserve their money.  Forcibly taking money from the United States and sending it overseas is unconstitutional and immoral.

The energy that lobbying groups and celebrities expend for charitable causes here on the Hill could be better put to use actually addressing problems.  It is sadly symptomatic of the trend toward bigger government that instead of private fundraising efforts, people put their hand out to Congress.  It is unfortunate that some activists prefer funding taken by force, to donations freely given.

These efforts, though well-meaning, are misguided.  The truth is all the foreign aid in the world will not transform Africa into a thriving, healthy continent.  The economic growth of Africa depends on African entrepreneurs, liberalized trade policies, and political and economic freedom.  The best thing we could possibly do for Africa and for our own country, is to stop sending misguided aid, and stop protectionist trade practices that prevent African farmers and producers from competing in our markets.  Perhaps then Africa's leaders would focus less on how to get aid out of the United States , and more on the economic vitality of their own countries.

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Hope for the Economy

Posted by: Ron Paul (March 27, 2008, 02:01 PM)

It is becoming harder and harder for Washington and the mainstream media to ignore the ripple effect the collapse of the housing bubble is having on the economy.  Inflation is up, cost of food is up, oil and gold are up, foreclosures are up, unemployment is up, government spending is at record highs, its seems that the only thing down is the value of the dollar.  The middle and lower classes are getting squeezed as prices jump and wages stay flat.

Though it is good that Washington is acknowledging the problem instead of sweeping it under the rug, I always get nervous at their ideas of solutions.  A proper solution requires an honest, in-depth look at the root of the problem.

What the government needs to stop doing is taxing Americans literally out of house and home in the wake of the housing debacle.  We should not take money from taxpayers to bail out bad businesses.  At the same time, we need to make sure that America can get back to work by easing taxes and regulations on good businesses and allow them to function and prosper.  Also there a lot of tax cuts and tax reforms we could be making to ease the burden on the American people.

I have many bills in Congress that address the high taxes Americans pay, but one in particular – my Tax-Free Tips Act – should be a no-brainer at a time like this.  This legislation would exempt gratuities earned by service sector workers from income tax liability.  A tip is a small gift and there is no contractual requirement to give it, yet if someone leaves a restaurant without tipping, the IRS will still estimate how much they should have been tipped and tax the waiter based on that, should they perform an audit.  This is patently wrong.

People working these jobs are the backbone of our economy, and they often support a family or put themselves through school on this money.  They are already taxed on their base wages through withholding.  They should not be taxed on tips.  We do not need to put this kind of pressure on our service workers.

To really fix the economy and get it back on track, though, a sea change, not a quick-fix attempt, is needed.  I was very pleased and encouraged that on Friday the Wall Street Journal published my letter to the editor addressing some of our economic problems.  The message is getting out because people are demanding answers.  The American people are strong, resourceful, hard working and determined.  Because of this we can get through these tough economic times, but our leaders need to understand how we got here in the first place.  Continuing the same flawed policies that got us here will only prolong the agony.

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Taxes or Tolls on the TTC

Posted by: Ron Paul (March 27, 2008, 02:00 PM)

One major concern I discussed a few weeks ago regarding the Trans Texas Corridor is where the land will come from.  Another concern is where the money will come from.  Official government websites for the TTC assure that public-private partnerships will shield the taxpayer from bearing too much of the cost burden, but a careful reading shows the door is definitely open to public funding sources, while at the same time there is no doubt of the intention to charge tolls on the road.

Taxpayers already pay for their transportation system through hefty gasoline taxes, vehicle registration fees, and other fees.  They have every right to expect the roads they have already paid for to be properly maintained and toll-free.

However, private foreign corporations have flocked to this country eager to participate in toll collection on our poorly managed toll roads, and they make a lot of money doing so.  Taking over the management and maintenance of an existing toll road is one thing.  Converting taxpayer built roads into cash cows for big corporations is quite another.  Using eminent domain to take privately owned land, and taxpayer funding to build a highway that is designed to bring in private revenue is nothing short of highway robbery.

Cintra/Zachry, a private Spanish firm, is poised to make billions from TTC tolls.  Yet my fear is that as planning progresses, more and more public burden will creep into the process, and more profit will be pledged to the private corporation.  The costs will be socialized and the profits will be privatized.

And to add insult to injury – private lands will be taken for this road which will be, for all intents and purposes, a private business.  The government should not use the power of eminent domain to seize and redistribute land for the benefit of a private company.  This is wrong and unconstitutional.  Cintra Zachry should negotiate with each individual land owner and go through the normal private land acquisition process to start its new business.  If mutual agreements can be reached, fine.  If not, government force is not appropriate.  Our government should protect property rights, not facilitate theft.

Toll roads should not be paid for with taxpayer dollars, or even bond funding that pledge future tax dollars.  Taxpayers should not have to pay additional fees for something they have already paid for.  Eminent domain should absolutely not be used for private businesses.  This public-private partnership has all the makings of the worst of both worlds.  I am doing my part at the Federal level in Congress to limit the damage to the taxpayer.  I introduced a bill in that prohibits the use of federal funding for any part of the TTC and I will continue to push for this bill, and other bills protecting property rights, taxpayers rights and our national sovereignty.  The government should not fund and enforce private efforts like this and thumb their nose at land owners and taxpayers.

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If We Subsidize Them ...

Posted by: Ron Paul (February 27, 2008, 10:31 PM)

For decades we have welcomed new immigrants to our American "melting pot".  We respect those who come here peacefully to pursue their American Dream.  But Americans have noticed lately that modern problems associated with illegal immigration are at a crisis point.  Taxpayers are now suffering the consequences.

Costs of social services for the estimated 21 million illegal immigrants in this country are approaching $400 billion.  We educate 4.2 million children of illegals at a cost of $13.8 billion.  There have been almost 2 million anchor babies born in this country since 2002, with labor and delivery costs of between $3 and 6 billion.  There are currently 360,000 illegals in our prisons and we have spent $1.4 billion to incarcerate them since 2001.  In Prince William County near DC, ICE can't deport criminal illegals fast enough and has actually asked its local jails to slow down on referring them.  Jurisdiction over illegal immigration lies at the federal level, yet many municipalities are struggling with the compounding problems of mandated costs and tied hands.  My office has heard from at least one sheriff in my district considering seeking compensation from the Federal government for the cost of so many illegal immigrant inmates that wouldn't be here if the Federal government was doing its job and protecting our borders.  The problems are widespread.

One thing is certain:  If we subsidize them, they will come.  We have rolled out the social services red carpet, so it is no surprise that many from other countries are eager to come take advantage of our very generous system.

We must return to the American principle of personal responsibility.  We must expect those who come here to take care of themselves and respect our laws.  Not only is this the right thing to do for our overtaxed citizens, but we simply have no choice.  We can't afford these policies anymore.  Since we are $60 trillion in debt, there should be no taxpayer-paid benefits for non-citizens.  My bill, the Social Security for American Citizens Only Act, stops non-citizens from collecting Social Security Benefits.  This bill, by the way, picked up three new cosponsors this week and is gaining momentum.   Also, we should not be awarding automatic citizenship to children born here minutes after their mothers illegally cross the border.  It just doesn't make sense.  The practice of birthright citizenship is an aberration of the original intent of the 14th amendment, the purpose of which was never to allow lawbreakers to bleed taxpayers of welfare benefits.  I have introduced HJ Res 46 to address this loophole.  Other Western countries such as Australia , France , and England have stopped birth-right citizenship.  It is only reasonable that we do the same.  We must also empower local and state officials to deal with problems the Federal government can't or won't address.  Actions like this are a matter of national security at this point.

Illegal immigration is draining and frustrating the American taxpayer.  I will continue to work for a solution that does not reward those who break our laws.

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