Texas Straight Talk

Celebrating the Fight for Freedom on the Fourth

Ron Paul — 07/06/2009 12:15

Every year on the Fourth of July we remember our founding fathers and the precious inheritance of freedom that they secured for us. Every year it seems we get further and further away from that birthright, but we still have much to celebrate.

This country was founded on principles of freedom from overbearing rulers, onerous taxation, and the right to live our lives as we see fit. Our independence was won after decades, and even centuries of abuses that unscrupulous, corrupted leaders and big governments visited upon their subjects. The Founders knew there was a better way, and they forged it here on this soil.

In the new United States of America, the rights of the individual were enshrined in the Bill of Rights. Today, government encroaches on those rights through countless provisions in numerous laws. However, how much worse off might we be had the Founders not enumerated these rights in the highest law of the land? While it is true that many aspects of those rights have been redefined and watered down, and will likely continue to be eroded, we can celebrate the wisdom of the Founders and that at our very core we, as Americans, still hold these rights dear.

The American tradition of individual liberty and self-reliance still runs deep, in spite of the increasing nanny state tendencies that government has been gradually shoving down our throats. It is sad to see government seeking to completely replace the voluntary protections through families and charities that we have relied on throughout our history. Especially disturbing is the rhetoric of community and interdependence being employed by the administration to institute government as the great middle man for all healthcare and charity for which all citizens must dutifully sacrifice. This trend is not improving quality of life for Americans, but instead is greatly enriching the government bureaucracies that take a generous cut of all transactions in the welfare state. There still remains much resistance to cradle to grave government dependence and control. This spirit of fierce independence is a tribute to our founders and is cause to celebrate.

The majority of our Founders believed in sound money, in part because they knew it kept government in check. Governments that are unable to expand the money supply and manipulate credit at will are unable to fund frivolous wars of conquest. Instead of adventurism abroad, seeking monsters to destroy, governments restrained by sound money are restricted to truly defensive wars that the people are willing to fight and to fund. Today, in spite of all the economic turmoil that fiat currency and military interventionism has caused, there is cause to celebrate. The demand to audit the Federal Reserve is quite encouraging. The truth about the fed will put us one step closer to sound money, and peace.

Public outcry against the bank bailouts and the government power grab known as cap-and-trade proves that the spirit of liberty still lives. Part of our celebration of Independence Day should include a renewed determination to keep fighting the good fight for freedom. As long as government continually seeks to take liberties away, patriots need to keep fighting this ongoing war for sustained independence.

42 Comments

Cap and Trade Will Lead to Capital Flight

Ron Paul — 06/29/2009 13:04

In my last column, I joked that with public spending out of control and the piling on of the international bailout bill, economic collapse seems to be the goal of Congress. It is getting harder to joke about such a thing however, as the non-partisan General Accounting Office (GAO) has estimated that the administration’s health care plan would actually cost over a trillion dollars. This reality check may have given us a temporary reprieve on this particular disastrous policy, however an equally disastrous energy policy reared its ugly head on Capitol Hill last week.

The Cap and Trade Bill HR 2454 was voted on last Friday. Proponents claim this bill will help the environment, but what it really does is put another nail in the economy’s coffin. The idea is to establish a national level of carbon dioxide emissions, and sell pollution permits to industry. HR 2454 also gives federal bureaucrats new power to regulate a wide variety of household appliances, such as light bulbs and refrigerators, and further distorts the market by providing more of your tax money to auto companies.

The administration has pointed to Spain as a shining example of this type of progressive energy policy. Spain has been massively diverting capital from the private sector into politically favored environmental projects for the better part of a decade, and many in Washington apparently like what they see. However, under no circumstances should anyone serious about economic recovery emulate an economy that is now approaching 20 percent unemployment, where every green job created, eliminated 2.2 real jobs and cost around $800,000 each!

The real inconvenient truth is that the cost of government regulations, taxes, fees, red tape and bureaucracy is a considerable expense that has to be considered when companies decide where to do business and how many people they can afford to hire. Increasing governmental burden directly causes capital flight and job losses, as Spain has learned. In this global economy its easy enough for businesses to relocate to countries that are more politically friendly to economic growth. If our government continues to kick the economy while its down, it will be a long time before it gets back up. In fact, jobs are much more likely to go overseas, compounding our problems.

And for what? Contrary to claims repeated over and over, there is no consensus in the scientific community that global warming is getting worse or that it is manmade. In fact over 30,000 scientists signed a petition recently directly disputing the claims on which this policy is based. Legitimate environmental claims should instead be directed towards the public sector. The government, especially the military, is the most serious polluter in the country, and is exempt from most EPA regulations. Meanwhile Washington bureaucrats have classified the very air we exhale as a pollutant and have gone unchallenged in this incredible assertion. The logical consequence is that there will come a time when we will have to buy a government permit just to emit carbon dioxide into the atmosphere from our own lungs!

The events on Capitol Hill last week just demonstrate Washington’s audacity in manufacturing problems just so they can expand government power to solve them.

75 Comments

International Bailout Brings Us Closer to Economic Collapse

Ron Paul — 06/22/2009 12:41

Last week Congress passed the war supplemental appropriations bill. In an affront to all those who thought they voted for a peace candidate, the current president will be sending another $106 billion we don’t have to continue the bloodshed in Afghanistan and Iraq, without a hint of a plan to bring our troops home.

Many of my colleagues who voted with me as I opposed every war supplemental request under the previous administration seem to have changed their tune. I maintain that a vote to fund the war is a vote in favor of the war. Congress exercises its constitutional prerogatives through the power of the purse, and as long as Congress continues to enable these dangerous interventions abroad, there is no end in sight, that is until we face total economic collapse.

From their spending habits, an economic collapse seems to be the goal of Congress and this administration. Washington spends with impunity domestically, bailing out and nationalizing everything they can get their hands on, and the foreign aid and IMF funding in this bill can rightly be called an international bailout!

As Americans struggle through the worst economic downturn since the Great Depression, this emergency supplemental appropriations bill sends $660 million to Gaza, $555 million to Israel, $310 million to Egypt, $300 million to Jordan, and $420 million to Mexico. Some $889 million will be sent to the United Nations for so-called “peacekeeping” missions. Almost one billion dollars will be sent overseas to address the global financial crisis outside our borders. Nearly $8 billion will be spent to address a “potential pandemic flu” which could result in mandatory vaccinations for no discernable reason other than to enrich the Pharmaceutical companies that make the vaccine.

Perhaps most outrageous is the $108 billion loan guarantee to the International Monetary Fund. These new loan guarantees will allow that destructive organization to continue spending taxpayer money to prop up corrupt leaders and promote harmful economic policies overseas.

Not only does sending American taxpayer money to the IMF hurt citizens here, evidence shows that it even hurts those it pretends to help. Along with IMF loans comes IMF required policy changes, called Structural Adjustment Programs, which amount to forced Keynesianism. This is the very fantasy-infused economic model that has brought our own country to its knees, and IMF loans act as the Trojan Horse to inflict it on others. Perhaps most troubling is the fact that leaders in recipient nations tend to become more concerned with the wishes of international elites than the wishes and needs of their own people. Argentina and Kenya are just two examples of countries that followed IMF mandates right off a cliff. The IMF frequently recommends currency devaluation to poorer nations, which has wiped out the already impoverished over and over. There is also a long list of brutal dictators the IMF happily supported and propped up with loans that left their oppressed populace in staggering amounts of debt with no economic progress to show for it.

We are buying nothing but evil and global oppression by sending your taxdollars to the IMF. Not to mention there is no Constitutional authority to do so. Our continued presence in Iraq and Afghanistan does not make us safer at home, but in fact undermines our national security. I vehemently opposed this Supplemental Appropriations Bill and was dismayed to see it pass so easily.

57 Comments

Moving Towards Tobacco Prohibition

Ron Paul — 06/15/2009 13:32

Last week, another bill was passed and signed into law that takes more of our freedoms and violates the Constitution of the United States. It was, of course, done for the sake of the children, and in the name of the health of the citizenry. It’s always the case that when your liberty is seized, it is seized for your own good. Such is the condescension of Washington.

The Family Smoking Prevention and Tobacco Control Act will give sweeping new powers over tobacco to the FDA. It will require everyone engaged in manufacturing, preparing, compounding, or processing tobacco to register with the FDA and be subjected to FDA inspections, which is yet another violation of the Fourth Amendment. It violates the First Amendment by allowing the FDA to restrict tobacco advertising in multiple ways, as well as an outright ban on advertising any cigarettes as light, mild or low-tar. The FDA will have the power of pre-market reviews of all new tobacco products, and will impose new user fees, meaning taxes, on manufacturers and importers of tobacco products. It will even regulate the amount of nicotine in cigarettes.

My objections to the bill are not an endorsement of tobacco. As a physician I understand the adverse health effects of this bad habit. And that is exactly how smoking should be treated – as a bad habit and a personal choice. The way to combat poor choices is through education and information. Other than ensuring that tobacco companies do not engage in force or fraud to market their products, the federal government needs to stay out of the health habits of free people. Regulations for children should be at the state level. Unfortunately, government is using its already overly intrusive financial and regulatory roles in healthcare to establish a justifiable interest in intervening in your personal lifestyle choices as well. We all need to anticipate the level of health freedom that will remain once government manages all health care in this country.

Actions in Congress such as this tobacco bill are especially disconcerting after we thought we were beginning to see some progress in drawing down the wrong-headed and failed war on drugs. A majority of Americans now think marijuana should be legal, taxed and regulated, according to a recent Zogby poll and over 70 percent are in favor of allowing medicinal use of marijuana. Bills like this take us down exactly the wrong path. Instead of gaining more freedom with marijuana, we are moving closer to prohibiting tobacco. Our prisons are already bursting with non-violent drug offenders. How long will it be before a black market in tobacco fills the prisons with non-violent cigarette smokers?

Hemp and tobacco were staple crops for our founding fathers when our country was new. It is baffling to see how far removed from real freedom this country has become since then. Hemp, even for industrial uses, of which there are many, is illegal to grow at all. Now tobacco will have more layers of bureaucracy and interference piled on top of it. In this economy it is extremely upsetting to see this additional squeeze put on an entire industry. One has to wonder how many smaller farmers will be forced out of business because of this bill.

171 Comments

GM, Amtrak and an Increasingly Fascist America

Ron Paul — 06/08/2009 12:15

Last week, General Motors finally declared bankruptcy. Many in government thought $20 billion in taxpayer dollars would save the company, but as predicted, it only postponed the inevitable. The government will dump another $30 billion into GM and take a 60 percent controlling interest for it. Public officials are now involving themselves in tactical business decisions such as where GM’s headquarters should move and what kind of cars it will build.

The promise that this is temporary and will eventually be profitable is supposed to ease the American people into accepting this arrangement, but it is of little comfort to those who remember similar promises when the American taxpayers bought Amtrak. After three years, government was supposed to be out of the passenger rail business. 40 years and billions of dollars later, the government is still operating Amtrak at a loss, despite the fact that they have created a monopoly by making it illegal to compete with Amtrak. Imagine what they can now do to what is left of the great American auto industry!

In a truly free market, GM would get your money one way and one way only – by selling you a car you want, at a price you are willing to pay. Instead, the government is giving public money to a private company in spite of the market signals it has been sending. Throwing money at GM does not stop it from being an engine of wealth destruction; on the contrary, it simply gives it more wealth to destroy.

Had it been allowed to fail naturally, the profitable pieces of GM would have been bought up and put to good use by now. The laid off employees would likely have found new jobs and all that capital would be in private hands, reinvested in companies that produce products demanded by consumers. Instead, we are all poorer now.

Political pressure, rather than the rule of law, is deciding how to divide up the remains of GM. The bondholders had billions in retirement savings invested in the company, and though they were entitled to nearly three times as much as the United Auto Workers, the bondholders were left with just a 10 percent stake compared to the union’s 17.5 percent stake. For their 60 percent stake, taxpayers have a future of constant bailouts to look forward to.

Comingling public control of private business is known as fascism. While today’s politicians may feel emboldened with all their new power, history will only repeat itself as all this collapses on itself. It is the height of hubris for bureaucrats and politicians to attempt to control the market and the freewill of the American people. In the end, the market always wins out. Maybe one day future generations will wise up and allow free markets to function and thrive without the albatross of government around its neck. For now, it looks like those in charge have not learned the lessons of the past, and have doomed us to repeat those mistakes once again.

76 Comments

Fight Government Encroachment into Healthcare!

Ron Paul — 06/01/2009 13:01

With a faltering economy, and skyrocketing costs, healthcare continues to be a critical issue for all Americans. Unfortunately government encroachment into the doctor/patient relationship is poised to exacerbate our problems with healthcare.

As an OB/GYN with over 30 years of experience in private practice, I understand that one of the foundations of quality healthcare is the patient's confidence that all information shared with his or her healthcare provider will remain private. And yet, the Federal Government plans to undermine this trust with establishment of mandatory electronic medical records collections and “unique health identifier” numbers assigned to all Americans. Funding for this program was among the numerous provisions jammed into the stimulus bill rushed through Congress earlier this year.

Electronic medical records that are part of the federal system will only receive the protection granted by the federal “medical privacy rule.” This misnamed rule actually protects the ability of government officials and state-favored special interests to view private medical records without patient consent.

Aside from those concerns, the government’s ability to protect medical records is highly questionable. After all, we are all familiar with cases where third parties obtained access to electronic veteran, tax, and other records because of errors made by federal bureaucrats. We should also consider the abuse of IRS records by administrations of both parties. What would happen if unscrupulous politicians gained the power to access their political enemies’ electronic medical records?

For these reasons I have introduced the Protect Patients’ and Physicians’ Privacy Act, HR 2630, which allows patients and physicians to opt out of any federally mandated, created, or funded electronic medical records system. The bill also repeals sections of federal law establishing a “unique health identifier” and requires patient consent before any electronic medical records can be released to a 3^rd party.

I have also introduced the Coercion is Not Health Care Act, HR 2629. This legislation forbids the federal government from forcing any American to purchase health insurance, or conditioning participation in any federal program on the purchase of health insurance. Forcing Americans to purchase government-approved health insurance is a back door approach to creating a government-controlled healthcare system. Congress would define what policies and coverage requirements satisfy their mandate. Does anyone then doubt that what conditions and treatments are covered would be determined by who has the most effective lobby? Or that Congress would be capable of writing a mandatory insurance policy that fits the unique needs of every individual in the United States?

With these conditions in place, I foresee the eventual imposition of price controls and limitations on what procedures and treatments that are covered. This will result in an increasing number of providers turning to “cash only” practices, making it difficult for those relying on the government-mandated insurance to find healthcare – the exact opposite of the desired result! Consider the increasing number of physicians who are already withdrawing from the Medicare program because of the low reimbursement and constant bureaucratic harassment from the Centers for Medicare and Medicaid Services.

Congress should put the American people back in charge of healthcare by expanding healthcare tax credits and deductions, increasing access to Health Savings Accounts, respecting privacy and the doctor/patient relationship. Further politicizing and bureaucratizing of healthcare will only increase costs and reduce quality, as demonstrated by most other countries with socialized medicine.

44 Comments

Torturing the Rule of Law

Ron Paul — 05/25/2009 13:35

While Congress is sidetracked by who said what to whom and when, our nation finds itself at a crossroads on the issue of torture. We are at a point where we must decide if torture is something that is now going to be considered justifiable and reasonable under certain circumstances, or is America better than that?

“Enhanced interrogation” as some prefer to call it, has been used throughout history, usually by despotic governments, to cruelly punish or to extract politically useful statements from prisoners. Governments that do these things invariably bring shame on themselves.

In addition, information obtained under duress is incredibly unreliable, which is why it is not admissible in a court of law. Legally valid information is freely given by someone of sound mind and body. Someone in excruciating pain, or brought close to death by some horrific procedure is not in any state of mind to give reliable information, and certainly no actions should be taken solely based upon it.

For these reasons, it is illegal in the United States and illegal under Geneva Conventions. Simulated drowning, or water boarding, was not considered an exception to these laws when it was used by the Japanese against US soldiers in World War II. In fact, we hanged Japanese officers for war crimes in 1945 for water boarding. Its status as torture has already been decided by our own courts under this precedent. To look the other way now, when Americans do it, is the very definition of hypocrisy.

Matthew Alexander, author of “How to Break a Terrorist” used non-torture methods of interrogation in Iraq with much success. In fact, one cooperative jihadist told him, "I thought you would torture me, and when you didn't, I decided that everything I was told about Americans was wrong. That's why I decided to cooperate." Alexander also found that in Iraq “the No. 1 reason foreign fighters flocked there to fight were the abuses carried out at Abu Ghraib and Guantanamo. Our policy of torture was directly and swiftly recruiting fighters for al-Qaeda in Iraq.” Alexander’s experiences unequivocally demonstrate that losing our humanity is not beneficial or necessary in fighting terror.

The current administration has reversed its position on releasing evidence of torture by the previous administration and we must ask why. A great and moral nation would have the courage to face the truth so it could abide by the rule of law. To look the other way necessarily implicates all of us and would of course further radicalize people against our troops on the ground. Instead, we have the chance to limit culpability for torture to those who were truly responsible for these crimes against humanity.

Not everyone who was given illegal orders obeyed them. Many FBI agents understood that an illegal order must be disobeyed and they did so. The others must be held accountable, so that all of us are not targeted for blowback for the complicity of some.

The government’s own actions and operations in torturing people, and in acting on illegally obtained and unreliable information to kill and capture, are the most radicalizing forces at work today, not any religion, nor the fact that we are rich and free. The fact that our government engages in evil behavior under the auspices of the American people is what poses the greatest threat to the American people, and it must not be allowed to stand.

69 Comments

Audit the Fed, Then End It!

Ron Paul — 05/18/2009 12:42

I have been very pleased with the progress of my legislation, HR 1207, which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system. This bill now has nearly 170 cosponsors, with support from both Republicans and Democrats. Senator Bernie Sanders has introduced a companion bill in the Senate S 604, which will hopefully begin to gain momentum as well. I am very encouraged to see so many of my colleagues in Congress stand with me for greater transparency in government.

Some have begun to push back against this bill, and I am very happy to address their concerns.

The main argument seems to be that Congressional oversight over the Fed is government interference in the free market. This argument shows a misunderstanding of what a free market really is. Fundamentally, you cannot defend the Federal Reserve and the free market at the same time. The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money – the lifeblood of the economy. In a free market, interest rates, like the price of any other consumer good, are decentralized and set by the market. The only legitimate, Constitutional role of government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters.

Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who, instead of stabilizing the economy, have destabilized it. It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930’s. It has also inflated away the value of our currency by over 96 percent since its inception. It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts. It has predictably exacerbated the very problems it was meant to solve.

Detractors have also argued that the Fed must remain immune from the political process, and that that more congressional oversight would distort their very important decisions. On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High level officials routinely make the rounds between positions at the Fed, member banks, Treasury and back again, taking care of friends and each other along the way.

As far as the foolishness of placing complex monetary policy decisions in the hands of politicians – I couldn’t agree more. No politician or central banker, no matter how brilliant, is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over. It is frankly beyond me why we ever agreed to try it again.

To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so.

However, it is the responsibility of every member of Congress to represent the interests of the people that sent them to Washington and find out what has been happening with our money. As the branch of government with the power of the purse, we really have no other reasonable choice when the economy is in the shape it is in.

131 Comments

On Af-Pak: Stop "Helping"

Ron Paul — 05/11/2009 12:04

While much of the country’s attention is on other issues, a serious situation is developing in Pakistan that threatens to plunge us into another fruitless and bloody war. It is very frustrating to see that many who were so vehemently against the wars of the last administration have suddenly lost interest in foreign policy simply because we were promised change.

Those still paying attention know that nothing could be further from the truth. Very little has changed, except perhaps rhetoric, but what does that matter when the bombing missions are only getting deadlier? Rather than drawing down violent military interventions into the affairs of other countries, the new administration is escalating the foreign policy of the previous administration.

In Pakistan that entails the continuation and even escalation of military interventionism just across the border with Afghanistan. The targets are believed to be enclaves of Taliban militants, however, many innocent civilians have been caught in the deadly crossfire, severely damaging our image in the region. Many ordinary Afghanis and Pakistanis that never had cause to take up arms against us are being provided with motivation as family and friends are killed and maimed by our clumsy and indiscriminate bombs. Is it worth it for us to be involved in this way at such a high cost of blood, treasure and goodwill? Is there anything to be gained by this policy?

We are helping the Taliban and other enemies to actually gain numbers and strength, while driving them down from the mountains in the border regions deeper into Pakistan, where they have been making a menace of themselves. As our bombings follow them, beleaguered villagers have little choice but to leave their homes and join the swelling numbers of refugees or take up arms and join the fight against us.

Nonetheless, instead of recognizing the cascading unintended consequences of trying to deal with Pakistan’s problems, all signs in Washington point to further escalation. Both the House and Senate have newly introduced bills to triple foreign aid to Pakistan, from $500 million to $1.5 billion, with every indication that the leadership in Pakistan is taking advantage of the situation with the Taliban to milk more aid from the US taxpayer. We are broke. This is money we don’t have, and it is an insult to the American people to run up the national credit card for this type of military adventurism after many Americans thought they were voting for peace.

The bottom line is our involvement in Pakistan’s internal problems is not making us safer. In fact, we are adding to the numbers of our enemies and increasing the threats to our security here at home. We are inciting the very terrorism and extremism we are trying to stop. Every dollar we send, even if it is for humanitarian purposes, frees up resources to make war and potentially prop up unpopular leaders. The factions and politics of the Middle East are irrational and dangerous. We play with fire when we meddle in their affairs, and we isolate ourselves diplomatically by making more enemies than friends. We need to bring our troops home, end all foreign aid, and maintain a neutral stance on the world stage. It, in fact, is the only foreign policy we can afford right now, and it would gain us more friends and trading partners than our bombs ever could. Besides, that’s what the Constitution permits and our founders strongly advised.

54 Comments

When Government Plays Doctor

Ron Paul — 05/04/2009 14:02

This week, concerns about swine flu have dominated the media and many government officials. While the American people should be made aware of infectious diseases and common sense preventative measures, much of the hysterical reaction from government only serves to remind us how detrimental to your health it can be when government plays doctor.

As a physician, I have yet to see any evidence that justifies the current level of alarm. Influenza typically kills around 36,000 people every year in this country and hospitalizes a couple hundred thousand. So far there are only a handful of confirmed deaths attributable to this strain, and most of those sickened have or will fully recover. Every death is tragic, but I see no reason to deal with this flu outbreak any differently than we typically deal with any other flu season. Instead, government in its infinite wisdom is performing even more invasive screening at airports, closing down schools and sporting events, and causing general panic.

We had a similar outbreak in 1976, with only 1 death from the flu, but mandatory vaccinations killed at least 25 before the program was abandoned.

When government gets involved in healthcare decisions, the cure is so often worse than the illness. And yet, this administration will likely consolidate the government’s power over your health with sweeping new reforms that are already being discussed in the Senate.

Government has not improved healthcare, and has not made it cheaper. Quite the opposite; costs have skyrocketed, and quality has gone down in many ways. Gone are the days of the country doctor making house calls, or of voluntarily giving away medical services at charity hospitals. The bureaucratization of healthcare these past 45 years has made things worse. It saddens me as a doctor that physicians are less and less accountable to patients, but more and more accountable to government red tape, insurance companies and attorneys. It seems so perverse to me that important medical decisions that will directly affect the lives of all or nearly all Americans are being hashed out behind closed doors in Washington rather than between doctors and patients.

There is perhaps nothing more valuable to a human being than his or her health, which is why I’ve always considered the practice of medicine so crucial to our well-being. Any intrusion by government into the privacy and trust between doctor and patient is detrimental to the art of medicine. It distorts the whole dynamic of who the client really is when doctors must answer more to government or insurance companies than to their patients. The best solutions to improving quality and lowering costs of healthcare would be measures that put decisions back into the hands of patients and doctors, where they rightfully belong. I have introduced HR 1495 The Comprehensive Healthcare Reform Act, which promotes health savings accounts and tax deductibility of healthcare costs as an important step in this direction.

The unfortunate reality of this recent health crisis, as with any crisis, is that it presents opportunities that the unscrupulous will take advantage of, while the fearful become more compliant.

58 Comments

Secession: the Ultimate States' Right

Ron Paul — 04/27/2009 12:48

Last week the governor of Texas ignited a media firestorm for his remarks involving the idea of secession. He did not call for Texas to secede from the United States. He merely pointed out that the federal government was treading heavily on the sovereignty of the states and that this can not continue indefinitely without a breaking point.

The reaction to Governor Perry’s statements has been nothing short of hysterical. He has been called treasonous for making this obvious point and opening up a discussion. I am not calling for secession either, however there is nothing wrong with a healthy and open discussion of this issue.

America was born from an act of secession. When King George’s rule trampled on the rights of the colonies, we successfully seceded from England. It took a war, but we were well within our rights. We applauded when former soviet states seceded from the USSR and declared their sovereignty. And hopefully the United States will eventually secede from the United Nations. We pay most of the bills of the UN, yet do not have the commensurate votes, so someday we will wake up and realize that membership, for these and other reasons, does not serve our interests.

On a personal level, contracts you enter into can be terminated if one side unilaterally changes the terms. If a credit card company jacks up your interest rate, you have every right to fulfill your obligations and close the account. Imagine if you were forced to stay with a credit card company forever no matter what just because you previously signed up! The principle of self-determination applies to political unions as well. In the cases I mentioned above, governing organizations transformed into much more overbearing entities than originally agreed upon. Several state constitutions originally had clauses explicitly allowing them to opt out of the Union down the road if they so chose. I doubt our country would have ever come together if this were not the case. Just because the north successfully kept the union together by force with the Civil War does not mean that enslaving the states is a legitimate alternative.

Secession is the last resort of states whose sovereignty is over-ridden by an overreaching federal government. The federal government has only itself to blame for this talk. Recently, some states have enacted laws allowing for the medicinal use of marijuana, yet these laws are basically voided by the continuing raids by the DEA, sanctioned by the administration. The federal government is also strong-arming states with stimulus money, forcing them to expand programs they know they will not be able to afford in the future, at a time when many states’ budgets are already in the red. This is not a new problem. No Child Left Behind burdened the states’ education systems and forced them through many hoops designed by federal bureaucrats in distant Washington DC rather than allowing communities to tailor education to their children’s unique needs. There are numerous other examples of the erosion of state sovereignty and many governors are frustrated, not just ours in Texas. Without the right to secede, state’s rights are meaningless.

A republican form of government should also be as close to the people as possible, which means the decisions of local governing bodies must be respected. Where the decisions of local governments are disregarded, the voice of the people is also disregarded. The more that happens, the more frustrated and angry the people will become.

97 Comments

Responses to Piracy

Ron Paul — 04/20/2009 12:23

The recent episode with the Somali pirates has brought to the forefront many questions about maritime security. What is the best way to deal with a gang of criminals, not acting on behalf of any country, when they attack private vessels? Under whose jurisdiction are these types of criminals to be prosecuted? Most importantly, how do we deter such attacks in the future?

Already the administration is saber-rattling with typical big government so-called solutions, like “diplomatically” threatening the weak Somalian government, or any government of any country where pirates are thought to live, with military action if they fail to control the situation. There are calls to increase the size of the navy until it is nearly omnipresent on the seas. I was pleased to see they got one thing partially right in stating that the government should work with shippers and the insurance industry to address gaps in their self-defense, if by “work with” they mean “get out of the way”. But I fear this will soon be brushed aside in favor of the more elaborate, interventionist and expensive measures. Self-defense is the most obvious, most effective and least expensive solution, but that has never stopped the government from spending money they don’t have to make problems worse.

The situation is not unlike the situation with the non-state thugs that perpetrated the attacks on 9/11. We were not attacked by any country, and yet our response was to start wars with countries out of a need for misguided retaliation. This destroyed most of the goodwill our nation had in the world, and helped terrorists recruit and grow even more powerful. The worst thing we could possibly do is react to this incident with the same misguided fervor, producing equally damaging results.

First and foremost, the people and entities closest to the situation need to be empowered to defend themselves. In the case of private shipping companies, the owners and operators need to be allowed to carry weapons to deter and defend from attacks. But because many governments, including ours, have anti-gun laws in place in ports and territorial waters, ironically to discourage piracy, it is nearly impossible to legally carry weapons at sea for peaceful and defensive purposes. This sets up the predictable situation that only criminals and military vessels remain armed, making legitimate shipping operations ridiculously easy prey. I strongly believe that standing behind the basic human right to self-defense is the best deterrent to both terrorism and piracy, which is why I also argued for allowing pilots to be armed after 9/11. What governments call a gun-free zone is in reality a target rich environment to a criminal.

The second line of defense would be for Congress to act within the Constitution and issue letters of marque and reprisal, deputizing private organizations to act within the law to disable and capture those engaged in piracy. This approach to keeping ships safe at sea would minimize the effect on international relations by keeping our Navy out of it, as well as keeping costs to a minimum.

These criminal gangs should not have free reign to rob, terrorize and murder as they please in the world. But we need to be thoughtful and strategic in our reaction to incidents like these, and not knee-jerk our way into bigger, more encroaching government and military solutions.

51 Comments

Fewer Taxes for Real Economic Stimulus

Ron Paul — 04/13/2009 12:58

Taxes are the issue this week as Americans struggle to make the April 15^th deadline to file their returns. It is a good time to contemplate the effects of big government and what it does to our country. The income tax is one of the most egregious encroachments on our liberties today. It is a form of involuntary servitude, which was supposed to have been outlawed by the 13^th Amendment.

Tax Freedom Day is defined as the day when the nation as a whole has theoretically earned enough income to fund its annual federal tax burden. For all of the days of the year before this day, you are a slave to government. For 2009, Tax Freedom Day will come on April 13^th. Almost a century ago in 1910, before the mistakes of 1913-namely the inception of the Federal Reserve and our current income tax, Tax Freedom Day was January 19^th, signifying a mere 5% tax burden. Somehow, our country functioned just fine.

If calculated to include government spending and the deficit, rather than just collections, Tax Freedom Day would actually fall on May 29. The annual deficit adds to the growing debt of future generations and adds insult to injury to those that struggle to make this economy work. It is a slap in the face that this is not enough to prevent this crushing governmental burden from falling on the next generation.

For months now, Washington has been desperately throwing taxpayers’ money at various programs to stimulate us out of the recession, to no avail. Seeing hard-earned money confiscated from the people and spent in such wasteful ways, such as the recent bailouts, is almost too much to bear. Getting rid of the income tax altogether, while very beneficial, may be a while in coming. In the meantime, I am fighting for every tax cut or tax credit possible.

I can think of no better economic stimulus than letting people keep their money and spend it how they see fit. For this reason, I am an original cosponsor on a bill that would give Americans a two month employment and income tax holiday, while taking unused TARP money back from the Secretary of the Treasury and putting it in the Social Security trust fund instead.

In addition, I have recently introduced the Child Health Care Affordability Act. If passed this legislation would provide parents with a tax credit of up to $500 for health care expenses of dependent children. I have also re-introduced the Tax Free Tips Act, which would make tips exempt from federal income and payroll taxes. I am also an original cosponsor of a bill that would make permanent the deduction of state and local sales taxes. My bill HR 162 exempts Social Security benefits from income tax.

These are just a few of the many tax related bills I am fighting for in Congress, but without a corresponding cut in the size of government, which I am also fighting for, we are simply adding to the future tax burden of our children.

83 Comments

Budget Expands Government as Economy Contracts

Ron Paul — 04/06/2009 12:46

Last week the House passed another budget that increases federal power, raises taxes, and increases the national debt. I voted against it, and was pleased to see that not a single Republican representative voted for it. Legislators often see bipartisanship as constructive, but I disagree especially where the destruction of our economy or our liberty is concerned. There has been too much bipartisan consensus on expanding government far beyond the bounds of the Constitution which we all swore to defend and uphold. Because of this, I have never been able to vote for a budget. However, it was good to see Republicans come together on this important vote, even if their alternative budget was almost as bad.

Despite the deterioration of our economy, this is the largest budget ever passed, at $3.6 trillion. Gross domestic product and tax receipts are shrinking. The government has less money to spend this year, and so it spends more - $1.5 trillion more - than it has. When the economy expands, the government expands. Worse, when the economy contracts, the government expands more. Even more troubling is that even though the size of the budget boggles the mind, it is never the final word on federal spending. No allowance has been made for future bailouts and stimulus plans that are highly likely. There are always supplemental bills passed later in the year. War spending is one of those. Spending on Afghanistan is only partially included in budget, with a supplemental request expected in the future. History shows that true costs far exceed estimates. So even though these numbers sound appalling enough, I predict spending will top $4 trillion this year, raising the national debt by over $2 trillion when all is said and done.

Some may notice that the neo-conservatives who masterminded the policy of global interventions are not complaining about the level of military and foreign spending. This is because rather than drawing down our costly interventions, Obama is largely staying the course on these issues. In fact, this week a group of leading neoconservatives met to discuss how best to support the President on foreign policy! I am disappointed and concerned that, in spite of a change in leadership, we will remain the policeman of the world, placing ourselves at grave danger in many ways.

As our mountain of debt is projected to double with the new budget, many are wondering how long our country can keep this up before serious repercussions are felt. Obviously we can’t continue down this road indefinitely. Certainly, no country has ever prospered when their public sector spent half or all of the nation’s GDP. Yet we are saddled with leadership that seems unwaveringly convinced that the key to prosperity is public spending. This will be exposed for the lie that it is when our creditors wake up and call in our debt. The temptation at that time will be for the government to simply print up dollars in the amount needed. This type of debt repudiation could signal the end of the dollar as its value sinks to zero. We are seeing all the signs that this could happen. Certainly there are no signs of the alternative, which is paying down debt and taking the path of fiscal responsibility.

Tragically, it is those who save their dollars, the most prudent and responsible among us, that will be hurt most by this irresponsibility in Washington.

58 Comments

End the War on Drugs

Ron Paul — 03/30/2009 11:01

We have recently heard many shocking stories of brutal killings and ruthless violence related to drug cartels warring with Mexican and US officials. It is approaching the fever pitch of a full blown crisis. Unfortunately, the administration is not likely to waste this opportunity to further expand government. Hopefully, we can take a deep breath and look at history for the optimal way to deal with this dangerous situation, which is not unprecedented.

Alcohol prohibition in the 1920’s brought similar violence, gangs, lawlessness, corruption and brutality. The reason for the violence was not that making and selling alcohol was inherently dangerous. The violence came about because of the creation of a brutal black market which also drove profits through the roof. These profits enabled criminals like Al Capone to become incredibly wealthy, and militantly defensive of that wealth. Al Capone saw the repeal of Prohibition as a great threat, and indeed smuggling operations and gangland violence fell apart after repeal. Today, picking up a bottle of wine for dinner is a relatively benign transaction, and beer trucks travel openly and peacefully along their distribution routes.

Similarly today, the best way to fight violent drug cartels would be to pull the rug out from under their profits by bringing these transactions out into the sunlight. People who, unwisely, buy drugs would hardly opt for the back alley criminal dealer as a source, if a coffeehouse-style dispensary was an option. Moreover, a law-abiding dispensary is likely to check ID’s and refuse sale to minors, as bars and ABC stores tend to do very diligently. Think of all the time and resources law enforcement could save if they could instead focus on violent crimes, instead of this impossible nanny-state mandate of saving people from themselves!

If these reasons don’t convince the drug warriors, I would urge them to go back to the Constitution and consider where there is any authority to prohibit private personal choices like this. All of our freedoms – the freedom of religion and assembly, the freedom of speech, the right to bear arms, the right to be free from unnecessary government searches and seizures – stem from the precept that you own yourself and are responsible for your own choices. Prohibition laws negate self-ownership and are an absolute affront to the principles of freedom. I disagree vehemently with the recreational use of drugs, but at the same time, if people are only free to make good decisions, they are not truly free. In any case, states should decide for themselves how to handle these issues and the federal government should respect their choices.

My great concern is that instead of dealing deliberatively with the actual problems, Congress will be pressed again to act quickly without much thought or debate. I can’t think of a single problem we haven’t made worse that way. The panic generated by the looming crisis in Mexico should not be redirected into curtailing more rights, especially our second amendment rights, as seems to be in the works. Certainly, more gun laws in response to this violence will only serve to disarm lawful citizens. This is something to watch out for and stand up against. We have escalated the drug war enough to see it only escalates the violence and profits associated with drugs. It is time to try freedom instead.

109 Comments

Bankruptcy is Economic Stimulus

Ron Paul — 03/23/2009 11:00

The distraction on Capitol Hill this week has to do with the jackpot bonuses that executives at AIG recently received. The argument is over a relative drop in the bucket. The total amount of bonuses given out was $165 million. The government has put $170 billion into AIG so far. Many now are demanding we get this money back. We ought to be spending our time and effort doing something more worthwhile, like figuring out how the Federal Reserve is handling the trillions of dollars they are creating and pumping into the economy, and how that is affecting the purchasing power of dollars in your pocket.

The big mistake was appropriating the TARP funds in the first place. A Johnny-come-lately bill of attainder won’t stop the spending epidemic. This whole situation is a perfect demonstration of why “doing nothing” and letting failing companies fail would have been much better than sinking valuable money and resources into them.

When a company makes a profit, it is a signal that it is taking resources and increasing their value while controlling costs. When a company operates at a loss, it is a signal that it is decreasing the value of its resources or letting out-of-control costs outstrip any value it has created. A company operating at a loss is therefore an engine of wealth destruction. Bankruptcies are a net positive for the economy because more productive competitors are rewarded by opportunities to buy up remaining assets at bargain prices to strengthen their operations. In an economy that allows this kind of growth and change, any jobs lost by bankruptcy are soon replaced by new ones as the most efficiently managed businesses gain access to more assets and expand.

Bankruptcy was the stimulus that we needed in the case of AIG. More bankruptcies would clean out malinvested resources and enable economic growth again.

AIG, by losing money and maneuvering their operations to the brink of bankruptcy, was telling us that they were inefficient. So what did we do? We forced the taxpayer to assume the losses, and now we are supposed to be shocked that it is not working out. Had AIG gone bankrupt, it would have been impossible to hand out these bonuses. The taxpayer would have been fleeced for $170 billion less last year. Had they gone bankrupt, the world would not have come to an end, it would just continue on with one less engine of wealth destruction.

We should have learned from Japan. The 1990’s is referred to as Japan’s “lost decade” because of the zombie banks kept on life support by the Japanese government. Any productivity was redirected through these engines of wealth destruction, resulting in long term stagnation. We should and can avoid this outcome if we come to our senses.

A recession should be a time of strengthening and regrouping for an economy. But as long as the government insists on maintaining the status quo by propping up failed institutions, we will continue to dig a bigger hole for ourselves.

104 Comments

Earmarks Don't Add Up

Ron Paul — 03/16/2009 11:28

Earmarks seem to be the hot topic this week, and as a fiscal conservative I am dismayed so many people deliberately distort the earmarking process and grandstand to make political points. It is an easy thing to do with earmarks. It takes a little more time and patience to grasp the reality of what earmarks really are.

To be sure, if earmarks were the driving force behind explosive government spending as some have been led to believe, that would be a good reason for all the fuss. The misconception seems to be that members of Congress put together a bunch of requests for project funding, add them all together and come up with a budget. The truth is, it is not done that way. The total level of spending is determined by the Congressional leadership and the appropriators before any Member has a chance to offer any amendments. Members’ requests are simply recommendations to allocate parts of that spending for certain items in that members’ district or state. If funds are not designated, they revert to non-designated spending controlled by bureaucrats in the executive branch. In other words, when a designation request makes it into the budget, it subtracts funds out of what is available to the executive branch and bureaucrats in various departments, and targets it for projects that the people and their representatives request in their districts. If a congressman does not submit funding requests for his district the money is simply spent elsewhere. To eliminate all earmarks would be to further consolidate power in the already dominant executive branch and not save a penny.

Furthermore, designating how money is spent provides a level of transparency and accountability over taxpayer dollars that we don’t have with general funds. I argue that all spending should be decided by Congress so that we at least know where the money goes. This has been a major problem with TARP funding. The public and Congress are now trying to find out where all that money went.

The real issue is that the overall budget is too big, by far, which is why I always vote against it. But attacking the 1 percent that was earmarked solves nothing. The whole issue is a distraction from the real problems we face, which are that the Federal Government will absorb over 1/3 of our country’s GDP this year and taxpayers are forced to fork over more than half their income to fund government at all levels. On top of that, the national debt is $11 trillion, which is $36,000 per citizen. The recent increases in bailouts, government spending and money creation is going to hobble our economy for decades. We must curb the government’s appetite severely if this country is ever to thrive again. The noise over “earmarks” is a red herring and a distraction from the real issue of uncommitted spending.

It is time to attack the entirety of government spending. We especially need a full account of the activities of the Federal Reserve that spends and creates trillions of dollars with no meaningful oversight. This is a huge problem that needs immediate attention.

49 Comments

Imagine

Ron Paul — 03/09/2009 10:29

Imagine for a moment that somewhere in the middle of Texas there was a large foreign military base, say Chinese or Russian. Imagine that thousands of armed foreign troops were constantly patrolling American streets in military vehicles. Imagine they were here under the auspices of “keeping us safe” or “promoting democracy” or “protecting their strategic interests.”

Imagine that they operated outside of US law, and that the Constitution did not apply to them. Imagine that every now and then they made mistakes or acted on bad information and accidentally killed or terrorized innocent Americans, including women and children, most of the time with little to no repercussions or consequences. Imagine that they set up check points on our soil and routinely searched and ransacked entire neighborhoods of homes. Imagine if Americans were fearful of these foreign troops, and overwhelmingly thought America would be better off without their presence.

Imagine if some Americans were so angry about them being in Texas that they actually joined together to fight them off, in defense of our soil and sovereignty, because leadership in government refused or were unable to do so. Imagine that those Americans were labeled terrorists or insurgents for their defensive actions, and routinely killed, or captured and tortured by the foreign troops on our land. Imagine that the occupiers’ attitude was that if they just killed enough Americans, the resistance would stop, but instead, for every American killed, ten more would take up arms against them, resulting in perpetual bloodshed. Imagine if most of the citizens of the foreign land also wanted these troops to return home. Imagine if they elected a leader who promised to bring them home and put an end to this horror.

Imagine if that leader changed his mind once he took office.

The reality is that our military presence on foreign soil is as offensive to the people that live there as armed Chinese troops would be if they were stationed in Texas. We would not stand for it here, but we have had a globe straddling empire and a very intrusive foreign policy for decades that incites a lot of hatred and resentment towards us.

According to our own CIA, our meddling in the Middle East was the prime motivation for the horrific attacks on 9/11. But instead of re-evaluating our foreign policy, we have simply escalated it. We had a right to go after those responsible for 9/11, to be sure, but why do so many Americans feel as if we have a right to a military presence in some 160 countries when we wouldn’t stand for even one foreign base on our soil, for any reason? These are not embassies, mind you, these are military installations. The new administration is not materially changing anything about this. Shuffling troops around and playing with semantics does not accomplish the goals of the American people, who simply want our men and women to come home. 50,000 troops left behind in Iraq is not conducive to peace any more than 50,000 Russian soldiers would be in the United States.

Shutting down military bases and ceasing to deal with other nations with threats and violence is not isolationism. It is the opposite. Opening ourselves up to friendship, honest trade and diplomacy is the foreign policy of peace and prosperity. It is the only foreign policy that will not bankrupt us in short order, as our current actions most definitely will. I share the disappointment of the American people in the foreign policy rhetoric coming from the administration. The sad thing is, our foreign policy WILL change eventually, as Rome’s did, when all budgetary and monetary tricks to fund it are exhausted.

179 Comments

Is Spending the Answer?

Ron Paul — 03/02/2009 15:00

This week, Congress and the administration once again showed their lack of economic understanding, as they ramped up spending to record levels. On the surface, maybe it does look to some like the economic crisis is a liquidity problem, that the economy is in trouble because money is not changing hands at the pace it once did in the boom years. They believe that to get back to a booming economy money needs to start changing hands again – and the quickest way to do this is for the federal government to massively expand spending to pump new money into the system. If this is the extent of their understanding, no wonder they call for spending, taxing, bailouts and inflation.

If spending was the solution, we never would have had a problem. During the last eight years, we’ve blown up the size of government and certainly had no want of spending on foreign or domestic policy. The Bush administration increased spending almost 20 percent its first term, and nearly doubled the national debt by the end of the second term. Certainly the case cannot be made that lack of government spending created the problem or can be the solution.

This is mirrored in American households. According to CNN private sector debt is 365 percent of private sector gross domestic product. Many relied simply on steady and continued increase in home values to enable spending and secure more debt. That trend has proven unsustainable and many Americans are adjusting their finances accordingly. For the first time, household debt is beginning to fall as consumers wake up to the realities of paying off debt and living within their means.

Wouldn’t it be great if the government would do the same?

A lot of capital and liquidity is out there waiting in the wings as the new administration is bringing about government uncertainty, a concept discussed by Robert Higgs as prolonging the Great Depression. In other words, it is a foregone conclusion that government will act. But, like a chicken with its head cut off, no one knows which way it will run, just that it will flail about wildly until it collapses.

Why start a business, when businesses could face the brunt of an increase in future taxation? Similarly, why hire a new employee if tax policy will just force you to fire them later on to stay afloat? Why buy a house, when you have no idea how future government meddling in the housing market will affect its value? Why spend at the shopping mall, or buy a new car when you don’t know how tax policy will affect your family budget, or if your job will come under the axe because your employer’s tax burden is increased?

I argue these kinds of questions and concerns contribute to the weakening economy. This type of tax policy keeps capital out of third world nations, and now is keeping capital in hiding here in the US. People are concerned about security and savings again, retrenching their household and business budgets. The economy could be helped if the government would just get out of the way and restore sound monetary and fiscal policies.

61 Comments

On Transparency of the Fed

Ron Paul — 02/23/2009 11:58

This week the Federal Reserve responded to the American people’s increased concerns over our monetary policy by presenting new initiatives aimed at enhancing the Fed’s transparency and accountability. As someone who has called for more openness from the Fed for over 30 years, I was pleased to see the Fed acknowledge the legitimacy of this need.

The Federal Reserve controls the flow of money and credit in our economy because Congress has abdicated its responsibility over the nation’s currency. This process therefore occurs centrally, and almost completely outside the system of checks and balances. Because of legal tender laws, people are left with no real choice, except to build their lives and futures around this monopoly currency, vulnerable to powerful central bankers. The Founding Fathers intended only gold and silver to be used as currency, however, inch by inch over the decades, this country has backed away from this important restraint. Our money today has no link whatsoever to gold or silver. For many reasons, this is extremely dangerous, and has a lot to do with the boom and bust cycles that have resulted in the crisis in which we find ourselves today.

The Fed is now pledging to reveal to the public more about its economic predictions, and calls this greater transparency. This is little more than window-dressing, at best, utterly useless at worst. Many analysts, especially those familiar with the Austrian school of economics, saw the current economic crisis coming years ago when the Federal Reserve was still telling the American people their policies were as good as gold. So while it might be nice to know what fantasy-infused outlook the Fed has on the economy, I am much more interested in what they are doing as a result of their faulty, haphazard interpretation of data. For instance, what arrangements do they have with other foreign central banks? What the Fed does on that front could very well affect or undermine foreign policy, or even contribute to starting a war.

We also need to know the source and destination of funds provided through the Fed’s emergency funding facilities. Information such as this will provide a more accurate and complete picture of the true cost of these endless bailouts and spending packages, and could very likely affect the decisions being made in Congress. But with so much of the Fed’s business cloaked in secrecy, these latest initiatives will not even scratch the surface of the Fed’s opaque operations. People are demanding answers and explanations for our economic malaise, and we should settle for nothing less than the whole truth on monetary policy.

The first step is to pass legislation I will soon introduce requiring an audit of the Federal Reserve so we can at least get an accurate picture of what is happening with our money. If this audit reveals what I suspect, and Congress has finally had enough, they can also pass my legislation to abolish the Federal Reserve and put control of the economy’s lifeblood, the currency, back where it Constitutionally belongs. If Congress refuses to do these two things, the very least they could do is repeal legal tender laws and allow people to choose a different currency in which to operate. If the Fed refuses to open its books to an audit, and Congress refuses to demand this, the people should not be subject to the whims of this secretive and incompetent organization.

103 Comments

On Reinstating the Draft

Ron Paul — 02/16/2009 13:17

Much has been made by the new administration of the idea of national service and volunteerism. While service to one’s community is certainly admirable, it is not the federal government’s place to “encourage” or promote volunteerism. Moreover, there are troubling signs that national service could transition from voluntary to mandatory, or de facto mandatory, such as the requirement of service in order to be granted a diploma, or something along those lines.

Involuntary servitude was supposed to be abolished by the 13^th Amendment, but things like Selective Service and the income tax make me wonder how serious we really are in defending just basic freedom. The income tax enslaves workers for nearly 4 months out of a year by garnishing what amounts to all their wages in that period of time. A military draft could demand your very life, without your consent. This should be unthinkable in a free society.

Proponents of reinstating the draft claim it is needed to protect liberty from enemies abroad. But what about the enemies of liberty right here at home? I am convinced that there are more threats to American liberty within the 10 mile radius of my office on Capitol Hill than there are on the rest of the globe. If we would get our troops off of foreign soil, those perceived enemies of our liberty abroad are much more likely to stand down and let us be. We have more than enough troops to mind our own business and defend ourselves. It is only for world domination that we have a troop shortage.

Nevertheless, some think recruiting for our military is too low and that the younger generation will not answer the call of duty willingly, and must be drafted by force. I take extreme exception to this characterization of young people today. First of all, I believe they correctly see that foreign policy, as unpopular as it has been under Bush, is not significantly changing under Obama, and has little, if anything, to do with defending the United States, and certainly not the Constitution. Second, many see friends and acquaintances who have voluntarily enlisted, and have taken note of how the soldier, the veteran is treated. Perhaps rather than blaming younger generations for being selfish, older generations should remember their promises to those who volunteer for military service and be mindful of how they are treated. Every homeless vet by the side of the road, every suicide, every report of substandard conditions in veteran hospitals is a sign of how we let our military down. Perhaps we should look to those issues if we have problems with military recruitment, rather than to trample freedom in the name of protecting it.

If that is not enough reason, consider that most in the military are against a draft. There is a vast difference between serving alongside another volunteer, and serving alongside a reluctant conscript. Americans need to be on the lookout for any propaganda trying to ease us back into the draft. Too often a flawed foreign policy prompts the need for a draft. Abolishing the Selective Service is one thing we could do to counter those efforts.

131 Comments

Freedom From Government

Ron Paul — 02/09/2009 12:04

President Obama signed an executive order last week continuing the faith-based initiatives program created by former President Bush. When the program was created, I warned that giving taxpayer money to private religious organizations would eventually lead to political control and manipulation of them. This week has provided some evidence that this was a justified concern.

The logic behind funding faith-based initiatives seemed reasonable to some. Private organizations are much more effective in charitable endeavors than government programs and bureaucracies. Therefore, why not “outsource” some of the government’s welfare-state activities to these worthy organizations? This appealed to many conservatives, especially after the follow-up executive order exempting recipients from discriminatory hiring laws, which assured many that taking federal funds would not jeopardize their control over their own operations. But beware the government program started under an administration you like, for it may look a lot different under the one you don’t. Exemptions that Bush gave, Obama can take away.

But now, dependencies on federal money have been set, operations have been expanded accordingly, and many charities are waiting breathlessly for the administration to tell them what new conditions they will have to meet. With the stroke of a pen, religious charities might not be able to take into consideration a job applicant’s faith, sexual orientation or lifestyle if they wish to remain eligible for that taxpayer money that was so enticing a few years ago. Similarly, if FOCA (Freedom of Choice Act) is passed, will Catholic Church hospitals be forced to offer abortion services to retain their federal funding? Can they remain solvent without it?

This is the major problem with basing a private business model on the receipt of government funds. This money does not come without control, or the future possibility of control. We are seeing parallel control grabs in industries that have recently been the recipients of taxpayer largess. Government officials are now discussing executive compensation on Wall Street, banking, and in the auto industry. How much is too much to pay someone? When is a bonus deserved? But because politicians have bought their way into these industries, these are now political decisions. It is easy to utilize class envy to whip up public support for these interventions, but government always slides down the slippery slope. Politicians are also discussing other aspects of these businesses in which they are not expert, such as, what should lending standards be? What sort of cars should we direct the auto industry to make? Once government money infiltrates a balance sheet, “taxpayers” meaning “politicians” have a say in how you operate.

Money is the Trojan horse that government uses to infiltrate and infect organizations. Funding that, on the outset, is designed to strengthen and support, will bureaucratize and regulate in the end. It is sad to see charities now having reason to focus on lobbying, regulatory compliance and paper pushing to get and retain money taken by force, rather than beefing up private, voluntary fundraising activities. Those tempted to join Washington’s ongoing bailout bonanza should instead take the famed advice of former First Lady Nancy Reagan on the acceptance of harmful and addictive substances and “Just Say No” to government money. This is the best protection from government control.

77 Comments

Cures for Our Economic Disease

Ron Paul — 02/02/2009 14:27

I have recently had several opportunities on various news programs to discuss the economy and what is wrong with the so-called economic stimulus package. I have said over and over what we shouldn’t be doing, and now I’d like to explain what we should be doing.

But to improve the situation, you must first have a solid grasp of how we got here. Government policies and central planning created the housing bubble, now going bust. About a decade ago the government made expanded homeownership and affordable housing a public goal. Through Fannie Mae, Freddie Mac and the secondary mortgage market the government incentivized creative, low down-payment, more widely available mortgage products, and discouraged the market-proven lending standards of the past. The Federal Reserve kept interest rates artificially low, which added more fuel to this fire. Many related sectors temporarily flourished because of this, and many people got into homes they otherwise could not have afforded. The increased demand for housing sent prices soaring until in many markets housing became even more unaffordable, necessitating even more creative mortgages, and impossibly leveraging homeowners. Many risky investment vehicles such as mortgage-backed securities, derivatives, credit default swaps grew out of this unsustainable situation. As the foreclosures began, the house of cards started to tumble. Too many people have confused the symptoms and the pain of the bust with the problematic policies that caused the bubble, which is really what needs to be treated.

First of all, just as the best cure for a hangover is not to drink so much, the best cure for a recession is a recession. It is time to sober up and return to free market sanity, risk and reward, supply and demand, without political intervention. Politicians are good at catering to the needs of special interests, but very bad at determining what needs to take place in the market. Government should stick to punishing fraud and enforcing contracts. When they use the tax code, bureaucratic departments and their manipulative rules and regulations to dictate social and economic behavior, we end up with distortions and malinvestments. Bailing out banks, continuing failed Fed policies and strapping the taxpayer with toxic debt will worsen the pain, and punish the innocent.

If Congress really wanted to do something helpful, it would cut taxes. Ideally, we would repeal the income tax altogether and get the IRS off the economy’s back, which would be a huge boon. We should also cut spending. Cut every unconstitutional department and program, every wasteful governmental encroachment on the people’s liberty and money, starting with our massive overseas empire. The cost of our empire is bringing us to our knees, just as the Soviets’ empire did to them. Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests.

These things would constitute real change, real economic stimulus. The plans being bandied about Washington are just more of the same. As long as no one seriously considers the cure, we are unfortunately destined to prolong the disease.

162 Comments

Stimulus for Whom?

Ron Paul — 01/26/2009 12:53

This week the House is expected to pass an $825 billion economic stimulus package. In reality, this bill is just an escalation of a government-created economic mess. As before, a sense of urgency and impending doom is being used to extract mountains of money from Congress with minimal debate. So much for change. This is déjà vu. We are again being promised that its passage will help employment, help homeowners, help the environment, etc. These promises are worthless. This time around especially, Congress should know better than to pass anything of this magnitude without first reading the fine print. There are many red flags that I have found in this bill.

At least $4 billion is allocated to expanding the police state and the war on drugs through Byrne grants, which even the Bush administration opposed, and the COPS program, both of which are corrupt and largely ineffective programs.

To help Big Brother keep a better eye on us and our children, $20 billion would go towards health information technology, which would create a national system of electronic medical records without adequate privacy protection. These records would instead be subject to the misnamed federal “medical privacy” rule, which allows government and state-favored special interests to see medical records at will. An additional $250 million is allocated for states to nationalize individual student data, expanding Federal control of education and eroding privacy.

$79 billion bails out states that haphazardly expanded their budgets during the bubble years, but refuse to retrench and cut back, as their taxpayers have had to, during recession years.

$200 million expands Americorps. $100 million goes to “faith-and-community” based organizations for social services, which will further insinuate the government into charity and community service. Private charities are much more efficient and effective because they are directly accountable to donors, while public programs tend to get rewarded for failure. With its money, the Federal Government brings its incompetence and its whims, while creating foolish dependence. This is sad to see.

Of course the bill is rife with central planning projects. $4 billion for job training, much of which will be used to direct workers into “green jobs”. $200 million to “encourage” electric cars, $2 billion to support US manufacturers of advanced batteries and battery systems, which is yet another function of government I can’t find in the Constitution. Not to mention $500 million for energy efficient manufacturing demonstration projects, $70 million for a Technology Innovation Program for “research in potentially revolutionary technologies” in which government, not supply and demand, will pick winners and losers. $746 million for afterschool snacks, $6.75 billion for the Department of Commerce, including $1 billion for a census.

This bill delivers an additional debt burden of $6,700 to every American man, woman and child.

There is a lot of stimulus and growth in this bill – that is, of government. Nothing in this bill stimulates the freedom and prosperity of the American people. Politician-directed spending is never as successful as market-driven investment. Instead of passing this bill, Congress should get out of the way by cutting taxes, cutting spending, and reining in the reckless monetary policy of the Federal Reserve.

224 Comments

Strengthening or Weakening the Economy?

Ron Paul — 01/19/2009 12:28

The economic situation continues to deteriorate this week as past and future bailouts were discussed on Capitol Hill. The debate was over the accountability of already disbursed TARP money, and on whether or not to release remaining funds. Banks that had already been bailed out before are looking for more money to fill the black holes that are their balance sheets, warning that they are simply too big to fail. However, whatever ‘devastating’ consequences these banks are dreaming up and pushing on Capitol Hill regarding their own collapse will be nothing compared to the collapse of our currency if we keep debasing it through these foolish bailouts. It should be that they are too big to bailout. The world will not come to an end without this or that bank. The most troubling thing to me is this rhetoric that only government can save the economy, and must act. This is so counter-productive.

We must ask ourselves what strengthens this country, and what weakens it.

Government is a monumental drag on this economy. Government at all levels currently absorbs about 35-40 percent of GDP, which is still not enough for its voracious appetite. While productivity is already overtaxed, the government routinely spends more than it takes in and makes up for the shortfall by constantly borrowing or debasing our dollars through inflation. It pains me to think of all the opportunities for productive economic growth we have given up simply because our government is super-sized instead of Constitution-sized. There are just a few constitutionally sanctioned activities for government to engage in, but it is so overstretched with unconstitutional encroachments that what it is legitimately supposed to do, it does very badly. And yet we are to believe the solution to our problems is to make government bigger. On the contrary, government makes our problems bigger. The central bank’s meddling with monetary policy led to overheated lending, and now massive defaults. The government used manipulative tax policy to distort the housing market which has had many unintended consequences, and here we are. Government is quick to enact and slow to correct bad policy. Yet in spite of government’s failures, it flourishes and grows, thanks to the continual bailouts from the unwitting taxpayer.

Big government has been tried and has failed miserably. What we need now is small government, and freedom. We need the freedom to pull ourselves up by our own bootstraps again, as we traditionally do in this country. But try to start a business or charity today, and you will understand how little economic freedom we really have left. Freedom, not government, made this the land of opportunity. Freedom laid the foundation that catapulted us to becoming the strongest economic power in the world. The American people are strong and capable. We can pull ourselves out of this mess. All we need is for the nanny-state to get out of the way and allow us to do it. Freedom is our strength, government is our weakness. Only by recognizing this and unleashing our strengths will we solve the problems we face today.

124 Comments

Stimulating Our Way to Rock Bottom

Ron Paul — 01/12/2009 11:47

With attention turning to the next big economic stimulus package, questions are still swirling about our economic troubles. How did we get here? How do we get out? As usual, Washington has all the wrong answers. According to many politicians, we got here by not spending enough, not consuming enough, and not regulating enough. Now government, like some mythical white knight, is going to ride in to save the day by blanketing the economy with dollars, hiring an army of new bureaucrats, creating make-work jobs, and sending everyone some form of a bailout check. The debate seems to focus on whether this will cost enough to save the economy, or if this is just a “down payment” with much more government spending to come. Talk like that would be comical, if the results weren’t going to be so tragic.

The results will be worsening economic woes until we learn our lesson. But instead Congress is behaving like drug addicts who must hit rock bottom before they are ready to face reality. They are playing foolish games with the economy now because they are thinking only of political expedience. This talk of job creation is a perfect example.

Contrary to the belief of many, the goal of the economy is not job creation. Jobs can be a sign of a healthy economy, as a high energy level can be a sign of a healthy body. But just as unhealthy substances can artificially give the addict that burst of energy that has nothing to do with health, artificially created jobs just exacerbate our problems. The goal of a healthy economy is productivity. Jobs are a positive outcome of that. A “job” could be to dig a hole one day, and fill it back up the next, or perhaps the equivalent at a desk. This does no one any good. But the value in that paycheck ultimately has to come from taxing someone productive. Some think this round-robin type of economic model is supposed to get us somewhere.

Politicians and bureaucrats have already done their fair share to ensure that jobs in the private sector are prohibitively complicated and expensive to create. They are now shocked that the economy is shedding jobs, and want to simply create hundreds of thousands of jobs to make up for the job losses, through another so-called economic stimulus package. The private sector must be permitted to do that, but instead they are massively burdened with taxes and webs of red tape and regulation. Washington’s bandaids will only prolong this agony. The Austrian school of economics teaches that only a free market economy, unencumbered by onerous government controls, creates long-term prosperity. Politicians, however, tend to be notoriously short-sighted.

I am left with these questions – who is going to be left standing to tax in the private sector to pay for all these public sector make-work jobs? Is Washington really to be considered some sort of savior for creating unproductive jobs in place of the productive jobs they eliminated?

We are at an economic dead-end and those in power are in denial. The truth is our economic problems are due to loose monetary policy, central economic planning, and the parasitic expenses of government. Unless we assess these problems honestly, we unfortunately have a long way to go until, like the junkie, we hit rock bottom.

64 Comments

Opportunities for Peace and Nonintervention

Ron Paul — 01/05/2009 11:03

Last week I discussed our worsening economic situation and the fact that there are very few options for the new administration to improve things in the long run. The same is not true on the foreign policy front. Our interventionist foreign policy stands ready to be put on a new course with the new administration. Unfortunately, it seems the new administration is likely to continue the mistakes of the past. I've often discussed interventionist foreign policy and the resulting blowback. The current administration's foreign policy, I'm afraid, has created a huge impetus for blowback against the United States. However, I truly believe much of the world stands ready to look beyond our nation's recent blunders if the new administration proves to be heading in a more reasonable direction.

Other nations around the world find our interference in their affairs condescending, and it is very dangerous for us. We may think we have much to gain by inserting ourselves in these complex situations, but on the contrary we suffer from many consequences. Other countries have their problems, to be sure. But how would we feel if China or Russia came to our soil and tried to depose our problematic leaders or correct our policies for us? Our problems are ours to solve, and we need to give other countries that respect as well. Instead, we have been turning alleged, phantom threats into real, actual threats.

We should follow the foreign policy advice of the Founders – friendship and commerce with all nations. One positive step would be to end our destructive embargo of Cuba, which deprives our farmers of a market just 90 miles from US shores while strengthening the Communist regime. We've seen 50 years of statist restrictions not accomplish anything. A change is needed. Other countries should decide how to govern themselves. Even if we don't necessarily approve, it's none of our business. If other people foolishly choose to live under statist experimental regimes, they need to fail in their own right, and not have us as a scapegoat. We need to focus on our own affairs.

However, the pressures exerted on our leadership from the military industrial complex and big business is not in favor of peace or freedom, or especially nonintervention. Intervention is big business. Defense contracts topped $300 billion last year, and total spending on war and our overseas empire is up to $1 trillion per year. That represents a lot of people earning a living off of war and conquest. But rather than adding to our economy, all of this money is taken from the economy in order to wage war and destruction. Imagine if those resources were put to creative, productive use here at home!

We need to rein in our overseas empire, as quickly as possible. We need to bring our troops home, and get our economy back into the business of production, not destruction. The smartest thing we could do is admit we don't know all the answers to all the world's problems. If the new administration can take a closer look at real free trade and no entangling alliances, we would be much better off for it. Economically – we could save hundreds of billions of dollars each year! The new leadership has the opportunity and the political capital to do this. But unfortunately, it is not likely to happen.

60 Comments

Transition and Hope

Ron Paul — 12/29/2008 14:27

As another year draws to a close, there are some important transitions ahead of us. Not just transitions to a new administration, but also economically, politically and culturally.

Many hoped that the changes would signify overwhelming positive steps for our country, and that we would enter a new era, as promised during the campaign. I would like for this to be true, but based on the continuity so far, I would not be surprised to see America stay on the same course of failed monetary and economic policies. The course has been set for several decades, and in reality there is little the new administration could do to fix things without actually making them worse. But I expect them to try. The only real solutions involve allowing the market to liquidate the debt and malinvestment. The political reality is that this is not going to happen.

Through the coming months and years, our nation will find itself at many crossroads, as all manner of socialist, corporatist, protectionist and nationalist initiatives will be thrown at the economy to see if anything will reflate it. Some of these so-called fixes will be enacted amidst much outcry, as with the $700 billion TARP bailout, which the public was right to oppose. About half of that money is gone without a trace, with no accountability, and the economy is no better off for it. Others, such as the proposed new $800 billion plus economic stimulus the new administration is already clamoring for, might have limited public support, as many will find the prospect of receiving a government check a little too tempting to object to. After all, Wall Street got a bailout. What about the little guy? Everything will be attempted by government in the short run to remedy the worsening situation – everything, that is, but freedom. Therefore everything attempted will fail. Unfortunately, government will continue to consolidate and abuse power at an accelerated pace. Government will get bigger, in the short term, and as monetary policy goes from irresponsible to absurd, I have every expectation that we will soon shift from some prices falling to an inflationary nightmare.

But there is hope. As all these attempts fail, more people will demand freedom, and see that it is the only way. Government can only get so big before the country goes broke.

It is regrettable that we keep forgetting what history has shown over and over to be true, because truly, it is a hard and destructive lesson to keep learning. Perhaps it is just something that every generation has to learn for itself. The political and cultural changes that come from these economic transitions will be key to the direction and quality of life for future generations. But I am hopeful because of the strength of the American people and the increased number of voices recognizing that liberty really is the only way to peace and prosperity.

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91 Comments

Government and Fraud

Ron Paul — 12/22/2008 14:20

Billions of dollars were recently lost in the collapse of Bernie Madoff’s self-described Ponzi scheme, in which too-good-to-be-true returns on investments were not really returns at all, but the funds of defrauded new investors. The pyramid scheme collapsed dramatically when too many clients called in their accounts, and not enough new victims could be found to support these withdrawals. Bernie Madoff was running a blatant fraud operation. Fraud is already illegal, and he will be facing criminal consequences, which is as it should be, and should act as an appropriate deterrent to potential future criminals. But it seems every time someone breaks the law, politicians and pundits decide we need more laws, even though lack of laws was not the problem.

The government itself runs a fraud much bigger than Madoff’s. Our Social Security system is the very definition of a Ponzi, or pyramid scheme. If the government truly had an interest in protecting people’s savings, they would allow people to opt out of Social Security altogether. We would cut wasteful spending, such as our overseas empire, to honor current obligations to seniors, and eventually phase the program out. Instead, as with Enron and Sarbanes Oxley, I expect new, unrelated legislation to be proposed that further damages freedom in the name of protecting us, amidst loud proclamations that they have made the world safe.

Merely passing a law does not fix any problems, just as throwing paper at a recession does not stop it. How can a government so complicit in mandatory public fraud effectively pre-empt private fraud? I see no reason to believe that any new law, or regulatory agency will solve anything. But I do see liberty slipping away every time Congress decides to “do something”. We already have an oversight agency, the SEC, which did a poor job overseeing and preventing this, but does a great job hamstringing honest, productive businesses and driving them overseas.

Total trust in government solutions only creates moral hazard, and amplifies risky behavior. Trust in government got us here. We trusted government to eliminate risk, but it just made risk more creative and dangerous. We trusted the Federal Reserve, a supra-governmental cabal of private banks, to know better than the free market what interest rates should be, and how to stabilize the business cycle, but like a spinning top that loses its balance, it has instead spun the business cycle and the economy wildly out of control.

No governmental activity can negate market forces or nullify the cardinal rule of caveat emptor. Government can however, use our fears against us and promise unrealistic outcomes as a means to consolidate power and erode our liberties. Liberty comes with risk. This is a fact of life. But life without liberty is not much of a life at all.

The only way the American people will get through these difficult times is through our own resilience and ingenuity. At best, the government is irrelevant in finding prosperity again. At worst, government can present a massive obstacle for the economy to overcome. If we do not wise up and rein government back in to its Constitutional limitations, bloated government could be a cumbersome unnecessary weight the economy will continually have to support to stay afloat.

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91 Comments

Economic Freedom or Socialist Intervention?

Ron Paul — 12/15/2008 14:05

The freedom to fail is an essential part of freedom. Government- provided financial security necessitates relinquishing the very essence of freedom. Last week, the big 3 American automakers came back to Capitol Hill with their hands out to the government. Congress spent this past week debating how much money to give them and what strings should be attached. Though the bailout plan for the auto industry has suffered what I would call a temporary setback in the Senate, other avenues for public funding are being explored through the Federal Reserve and the Treasury Department. I am afraid the American auto industry will soon learn that having billions rain down from Washington will not be the blessing one might expect.

The government, after it subsidizes an industry, tends to become a very demanding benefactor. Politicians may not have any real idea about how to build a car, run a bank, educate a child, heal the sick or build a road, but they are quite adept at using carrots and sticks to manipulate and threaten those who do. Most of the federal control over education, roads, healthcare, and now banking and soon auto manufacturing, is done through money, mandates and conditions. The bailout proposal we were considering would force automobile manufacturers to submit their business plans for the approval of a new federal "car czar." This bureaucrat would have the authority to approve the automakers’ restructuring plan, monitor implementation of the plan, and even stop certain transactions he determines are inconsistent with the companies’ long-term viability.

One could argue that if billions of taxpayer dollars are going to flow into a failing industry, then representatives of those taxpayers have "bought" a say in how that industry is run – which is precisely why bailouts are such a bad idea for both the industry and the taxpayers. The federal government has neither the competence nor the Constitutional authority to tell private companies, such as automakers, how to run their businesses. I would have thought that failed experiments with central planning and government control of business that caused so much harm in the last century would have taught my colleagues the folly of making businesses obey politicians and bureaucrats instead of heeding the wishes of consumers, employees, and stockholders. But the auto industry is in danger of learning for themselves one of the oldest lessons in politics: he who pays the fiddler calls the tune.

It is not the job of government to sustain business. The government should get out of the way, and instead examine excessive regulations, tax policy and red tape that have been hostile to manufacturing in this country. We should get back on a sustainable economic course in this country, or we are doomed to collapse, as the Soviets did, under the crushing burden of big government and a strangled economy that can no longer pay for it.

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89 Comments

Gun Control: Protecting Terrorists and Despots

Ron Paul — 12/08/2008 12:35

Tragically, over the Thanksgiving holiday, the world was reminded how evil and cruel people can be. According to emerging accounts of the events in India, about a dozen well-armed and devastatingly well-trained terrorists laid siege on the city of Mumbai, killing almost two hundred people, and terrorizing thousands.

Regardless of the reasons, the indiscriminate shooting on masses of unarmed and defenseless people is chilling and reprehensible. How were these terrorists able to continue so long, relatively unchallenged, killing so many?

India’s gun laws are her business, of course. However, once the shock of these events and the initial reaction of fear passes, Americans should take away a valuable lesson about real homeland security and gun control from this tragedy.

Gun control advocates tell us that removing guns from society makes us safer. If that were the case why do the worst shootings happen in gun free zones, like schools? And while accidents do happen, aggressive, terroristic shootings like this are unheard of at gun and knife shows, or military bases. It bears repeating that an armed society truly is a polite society.

The fact is that firearm technology exists. It cannot be uninvented. As long as there is metalworking and welding capability, it matters not what gun laws are imposed upon law-abiding people. Those that wish to have guns, and disregard the law, will have guns. Gun control makes violence safer and more effective for the aggressive, whether the aggressor is a terrorist or a government.

History shows us that another tragedy of gun laws is genocide. Hitler, for example, knew well that in order to enact his “final solution,” disarmament was a necessary precursor. While it is not always the case that an unarmed populace WILL be killed by their government, if a government is going to kill its own people, it MUST disarm them first so they cannot fight back. Disarmament must happen at a time when overall trust in government is high, and under the guise of safety for the people, or perhaps the children. Knowing that any government, no matter how idealistically started, can become despotic, the Founding Fathers enabled the future freedom of Americans by enacting the second amendment.

In our own country, we should be ever vigilant against any attempts to disarm the people, especially in this economic downturn. I expect violent crime to rise sharply in the coming days, and as states and municipalities are even more financially strained, the police will be even less able or willing to respond to crime. In many areas, local police could become more and more absorbed with revenue generating activities, like minor traffic violations and the asset forfeiture opportunities of non-violent drug offenses. Your safety has always, ultimately been your own responsibility, but never more so than now. People have a natural right to defend themselves. Governments that take that away from their people should be highly suspect.

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199 Comments

The Neo-Alchemy of the Federal Reserve

Ron Paul — 12/01/2008 13:07

As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems. Now that we are used to rewarding failure with taxpayer-funded bailouts, we are being told that this is “just a start,” more funds will inevitably be needed for more industries, and that things would be much worse had we done nothing.

The updated total bailout commitments add up to over $8 trillion now. This translates into a monetary base increase of 75 percent over the last two months. This money does not come from some rainy day fund tucked away in the budget somewhere – it is created from thin air, and devalues every dollar in circulation. Dumping money on an economy, as they have been doing, is not the same as dumping wealth. In fact, it has quite the opposite effect.

One key attribute that gives money value is scarcity. If something that is used as money becomes too plentiful, it loses value. That is how inflation and hyperinflation happens. Giving a central bank the power to create fiat money out of thin air creates the tremendous risk of eventual hyperinflation. Most of the founding fathers did not want a central bank. Having just experienced the hyperinflation of the Continental dollar, they understood the power and the temptations inherent in that type of system. It gives one entity far too much power to control and destabilize the economy.

Our central bankers have had a tremendous amount of hubris over the years, believing that they could actually manage a paper money system in such a way as to replicate the behavior and benefits of a gold standard. In fact, back in 2004 then Fed Chairman Alan Greenspan told me as much. People talk about toxic assets, but the real toxicity in our economy comes from the neo-alchemy practiced by the Federal Reserve System. Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today’s bankers are poisoning the economy with accelerated fiat money creation.

Throughout the ages, gold has stood the test of time as a consistently reliable medium of exchange, and has frequently been referred to as “God’s money”, as only God can make more of it. Seeking superhuman power over money in the way alchemists did in ancient times caused society to shun them as charlatans. In much the same way, free people today should be sending the message that this power and control over our money is no longer acceptable.

The irony is that even had the ancient practice of alchemy been successful, and gold was suddenly, magically made abundant, alchemists still would have failed to create real wealth. Creating gold from lead would have cheapened its status to that of rhinestones or cubic zirconia. It is unnatural and dangerous for paper to be considered as precious as a precious metal. Our fiat currency system is crumbling and coming to an end, as all fiat currencies eventually do.

Congress should reject the central bank as a failure for its manipulations of money that have brought our economy to its knees. I am hoping that in the 111^th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.

114 Comments

The Bailout Surge

Ron Paul — 11/24/2008 11:46

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.

103 Comments

Restricting Freedoms and Choices

Ron Paul — 11/17/2008 12:54

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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113 Comments

Hopes for the Future

Ron Paul — 11/10/2008 14:55

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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87 Comments

The Moral Hazard of Regulation

Ron Paul — 11/03/2008 14:51

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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84 Comments

Spending the Economy into Oblivion

Ron Paul — 10/27/2008 12:50

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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Too Big to Fail?

Ron Paul — 10/20/2008 13:27

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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113 Comments

Capitalism Without Capital?

Ron Paul — 10/14/2008 12:27

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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The Do-Something Congress

Ron Paul — 10/06/2008 12:41

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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308 Comments

Lipstick on a Bailout

Ron Paul — 09/29/2008 11:38

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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Predictions vs. Reality in Iraq

Ron Paul — 09/22/2008 14:12

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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148 Comments

In Government We Trust? Part 3

Ron Paul — 09/15/2008 12:29

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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In Government We Trust? Part 2

Ron Paul — 09/08/2008 11:56

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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71 Comments

In Government We Trust? Part 1

Ron Paul — 08/31/2008 12:26

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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178 Comments

Freedom is Golden

Ron Paul — 08/25/2008 12:01

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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87 Comments

How Foreign Policy Affects Gas Prices

Ron Paul — 08/18/2008 11:58

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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What's in a Bill Name?

Ron Paul — 08/11/2008 11:56

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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Washington's Intervention Addiction

Ron Paul — 08/04/2008 13:31

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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The Dangers of Neo-Conservative Economic Policies

Ron Paul — 07/28/2008 13:08

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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Faith-Based Currency

Ron Paul — 07/21/2008 12:13

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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Getting Out of Iraq

Ron Paul — 07/14/2008 12:48

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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Real Change

Ron Paul — 07/07/2008 12:06

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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Personal Freedoms and the Internet

Ron Paul — 06/30/2008 13:44

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.

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A Major Victory for Texas

Ron Paul — 06/23/2008 11:44

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.

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Iraq or the Economy?

Ron Paul — 06/19/2008 13:48

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.

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Rising Energy Prices and the Falling Dollar

Ron Paul — 06/19/2008 13:47

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.

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Sowing More Big Government with the Farm Bill

Ron Paul — 06/19/2008 13:45

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.

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A Salute to Veterans

Ron Paul — 06/19/2008 13:43

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.

2 Comments

The Economy: Another Casualty of War

Ron Paul — 05/19/2008 16:37

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.

2 Comments

Big Government Responsible for Housing Bubble

Ron Paul — 05/19/2008 16:36

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.

3 Comments

Big Government Responsible for High Gas Prices

Ron Paul — 05/19/2008 16:35

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.

1 Comments

Politicizing Pain

Ron Paul — 05/19/2008 16:34

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.

3 Comments

The Double Trouble of Taxation

Ron Paul — 04/21/2008 16:37

Taxes were on the forefront of many Americans’ minds this week as they scrambled to meet the April 15^th deadline to file their returns. Tax policy in this country hurts taxpayers twice – once when they pay taxes, and then when the government spends the money. Americans are sick and tired of the financial burden and the endless forms to fill out. To add insult to injury, after collecting this money the government does some very detrimental things to the economy.

The burden of complying with the income tax is tremendous. Since its inception in 1913, the tax code has gone from 400 pages to over 67,000. The Tax Foundation estimates that around $265 billion dollars and 6 billion hours are spent just on compliance. That expense amounts to about 22 cents of every dollar the IRS collects. Imagine the boon to the economy if we spent that time and money expanding our businesses and creating jobs!

Aside from the direct loss of money and productivity, the funds from the income tax enable the government to do some very destructive things, such as vastly over-regulating economic activity, making it difficult to earn money in the first place. The federal government funds over 50 agencies, departments and commissions that formulate rules and regulations. These bureaucracies operate with little to no oversight from the people or Congress and generate around 4,000 new rules every year and operate at a cost of about 40 billion dollars. There are some 75,000 pages of regulations in the Federal Register that Americans are expected to know and abide by. Complying with these governmental regulations costs American businesses more than one trillion dollars per year, according to a study by Mark Crain for the Small Business Administration. This complicated system drives production to other countries and shrinks our job market here at home.

Big government is destructive when it takes your money and when it spends it. There is no economic benefit to supporting a government sector as massive as ours. In fact, this country thrived for well over 100 years without an income tax. Today, if you took away the income tax, the government would still have revenue from other sources equal to total government spending in 1990, when government was still too big. $1.2 trillion should be more than enough to fund a government operating within its constitutional confines, and that is exactly what we need to get back to.

I have introduced legislation many times to abolish the IRS and the income tax. It is fundamentally un-American to require taxpayers to testify against themselves and be considered guilty until proven innocent. Abolishing the IRS altogether would trigger an avalanche of real growth in the economy.

With these financial hard times only just beginning, this would be the most efficient and logical way to get our economy growing again, and Americans would need not dread the 15^th of April every year.

5 Comments

No Sunlight on the Omnibus

Ron Paul — 03/27/2008 14:11

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.

1 Comments

Legislative Forecast for 2008

Ron Paul — 03/27/2008 14:11

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.

0 Comments

Constitutional Responses to Terrorism

Ron Paul — 03/27/2008 14:10

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.

5 Comments

Economic Stimulus Concerns

Ron Paul — 03/27/2008 14:07

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.

1 Comments

Paving Paradise

Ron Paul — 03/27/2008 14:06

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.

0 Comments

Second Amendment Battle in DC

Ron Paul — 03/27/2008 14:06

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.

1 Comments

On Five Years in Iraq

Ron Paul — 03/27/2008 14:05

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.

0 Comments

Making a Recession Great

Ron Paul — 03/27/2008 14:04

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?

Ron Paul — 03/27/2008 14:04

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

Ron Paul — 03/27/2008 14:01

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

Ron Paul — 03/27/2008 14:00

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 ...

Ron Paul — 02/27/2008 22:31

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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