UPDATE: Also see Ron Paul's follow-up statement on Bernanke's reaction to Dr. Paul's remarks.
Ron Paul got a chance to give an opening statement and question Ben Bernanke at today's Financial Services hearing. He questioned Bernanke on whether the Fed has been involved in bailing out Greece, or if Congress would even find out if they did; Bernanke maintained that they are not involved, and Congress WOULD be notified. But how can they be trusted if there is no way to verify if that's true? Only an audit would reveal that. And as Daniel Muir of the Indianapolis Colts put it, how can we trust someone who looks like a crook and who's out to take everything you own! Watch below:
Wednesday, February 24, 2010
Monday, February 22, 2010
Ron Paul's Texas Straight Talk 2/22/10: Government Stimulus, One Year Later
Dr. Paul's latest Texas Straight Talk:
Last week marked the one year anniversary of the American Reinvestment and Recovery Act, or the stimulus bill, passing into law. While the debate over its success has been focused on whether or not it is stimulating the economy and on various questionable uses of funds, in my estimation this legislation is accomplishing exactly what it was intended to accomplish – grow the government.
Those of us concerned about the ever increasing level of government debt gasped at the astonishing $787 billion cost estimates for this bill. True to form it has actually cost 10 percent more at $862 billion. We heard over and over that government could not sit around and do nothing while people lost their jobs and houses. The administration claimed that unemployment would not go above 8 percent if the stimulus bill passed. Now, a year later, the government estimates that unemployment is over 10 percent. The real number is closer to 20 percent. It appears that those promises were total fabrications in order to close the deal.
In any case, the American people know that more government spending obviously equals more government. If the goal was to strengthen the private sector, Congress would have allowed businesses and individuals to keep more of their own money through meaningful tax cuts. Outrageously, the administration claims that they did “cut taxes” by reducing withholding, and that they have stimulated the private economy by increasing the amount of money in every worker’s paycheck. What they fail to mention is they did not change the total amount of taxes due. This means that all that money not withheld from paychecks will add up to a big unpleasant surprise when returns are filed this year. Many tax preparers are already seeing shocked taxpayers having to come up with big checks to the government when they normally expect a refund. Stimulus, indeed!
The administration also claims that thousands of jobs have been created or saved by this massive spending bill, but these are just more government jobs, and counterproductive in the long run. Funding for the public sector necessarily comes at the expense of an overtaxed private economy. But, it makes sense that government would seek to expand its payroll since every new bureaucrat becomes a likely advocate for big government, when an increasing number of Americans are demanding the opposite. But the more the burden, the closer the government parasite comes to killing its host.
Rather than learning the lessons of the past year, the administration is moving full-speed ahead to do even more economic damage. With the stimulus bill set as a precedent and victory declared, another “jobs” bill is in the works. And, in order to address the unavoidable issues of our massive deficit, the administration has named a bi-partisan commission to find ways to decrease it. Tax increases on the middle class are notoriously back “on the table”, exposing that campaign promise as another instance of merely saying what the people wanted to hear. If the obvious solution to our spending problems was seriously put forth, that is, getting back to the constitutional limitations of government, I would be shocked. More likely, this will be a tactic to increase taxes and spending in a way that passes the political buck.
Last week marked the one year anniversary of the American Reinvestment and Recovery Act, or the stimulus bill, passing into law. While the debate over its success has been focused on whether or not it is stimulating the economy and on various questionable uses of funds, in my estimation this legislation is accomplishing exactly what it was intended to accomplish – grow the government. Those of us concerned about the ever increasing level of government debt gasped at the astonishing $787 billion cost estimates for this bill. True to form it has actually cost 10 percent more at $862 billion. We heard over and over that government could not sit around and do nothing while people lost their jobs and houses. The administration claimed that unemployment would not go above 8 percent if the stimulus bill passed. Now, a year later, the government estimates that unemployment is over 10 percent. The real number is closer to 20 percent. It appears that those promises were total fabrications in order to close the deal.
In any case, the American people know that more government spending obviously equals more government. If the goal was to strengthen the private sector, Congress would have allowed businesses and individuals to keep more of their own money through meaningful tax cuts. Outrageously, the administration claims that they did “cut taxes” by reducing withholding, and that they have stimulated the private economy by increasing the amount of money in every worker’s paycheck. What they fail to mention is they did not change the total amount of taxes due. This means that all that money not withheld from paychecks will add up to a big unpleasant surprise when returns are filed this year. Many tax preparers are already seeing shocked taxpayers having to come up with big checks to the government when they normally expect a refund. Stimulus, indeed!
The administration also claims that thousands of jobs have been created or saved by this massive spending bill, but these are just more government jobs, and counterproductive in the long run. Funding for the public sector necessarily comes at the expense of an overtaxed private economy. But, it makes sense that government would seek to expand its payroll since every new bureaucrat becomes a likely advocate for big government, when an increasing number of Americans are demanding the opposite. But the more the burden, the closer the government parasite comes to killing its host.
Rather than learning the lessons of the past year, the administration is moving full-speed ahead to do even more economic damage. With the stimulus bill set as a precedent and victory declared, another “jobs” bill is in the works. And, in order to address the unavoidable issues of our massive deficit, the administration has named a bi-partisan commission to find ways to decrease it. Tax increases on the middle class are notoriously back “on the table”, exposing that campaign promise as another instance of merely saying what the people wanted to hear. If the obvious solution to our spending problems was seriously put forth, that is, getting back to the constitutional limitations of government, I would be shocked. More likely, this will be a tactic to increase taxes and spending in a way that passes the political buck.
Monday, February 8, 2010
Ron Paul: More Spending is Always the Answer
Dr. Paul's latest Texas Straight Talk:
Last week, the House approved another increase in the national debt ceiling. This means the government can borrow $1.9 trillion more to stay afloat and avoid default. It has been little more than a year since the last debt limit increase, and graphs showing the debt limit over time show a steep, almost vertical trend. It is not likely to be very long before this new ceiling is met and the government is back on the brink between default and borrowing us further into oblivion. Congressional leaders and the administration acknowledge that the debt limit will need to be increased again next year. They are crossing their fingers that the forecasts are correct and they will not need another increase sooner, even before the 2010 midterm elections.
Continually increasing the debt is one of the logical outcomes of Keynesianism, since more government spending is always their answer. It is claimed that government must not stop spending when the economy is so fragile. Government must act. Yet, when times are good, government also increases in size and scope, because we can afford it, it is claimed. There is never a good time to rein in government spending according to Keynesian economists and the proponents of big government.
Free market Austrian economists on the other hand know that times are bad because of the size and scope of government. The economy is fragile because of the overwhelming stranglehold of bureaucracy and taxation of Washington. Any jobs Washington might create through these endless spending programs are paid for through more taxation and debt put on the productive sectors of the economy. Just as insidious is the hidden tax of inflation caused by the Fed and its ever-expanding credit bubble. When the Fed steps in with its solutions, it only devalues the dollars in everyone’s pocket while encouraging more reckless waste on Wall Street. All of this leads to a worsening economy, not an improved one.
And so the downward spiral continues. The worse things get, the more politicians want to spend. The more they spend, the heavier the debt load becomes and the more we have to spend just to maintain our interest payments. As our debt load becomes unsustainable, the alarm of our creditors increases. It is becoming so serious that our credit rating, as a nation, could be downgraded. If this happens, interest on the national debt will increase even more, leading to even higher taxes on Americans and inevitably, price inflation.
Still, Washington is full of talk of more regulation, more taxation and more spending. The Senate is still struggling to pass a massive regulatory increase on the financial sector, even as the stock market suffers more shockwaves. Pay-as-you-go rules give the appearance of fiscal responsibility, but in truth these rules are only used as a justification to raise taxes. Spending programs like healthcare reform, increased military spending, and a recent doubling of destructive foreign aid are viewed by Washington as necessary and reasonable, instead of foolishness we absolutely cannot afford.
The people understand this, which is why there is so much anger directed at politicians. Washington needs to change its thinking and adopt some common sense priorities. The Constitution gives some excellent limitations that would get us back on the right path if we would simply abide by them. The framers of the Constitution understood that only the ingenuity of the American people, free from government interference, could get us through hard times, yet Washington seems bent only on prolonging the agony
Last week, the House approved another increase in the national debt ceiling. This means the government can borrow $1.9 trillion more to stay afloat and avoid default. It has been little more than a year since the last debt limit increase, and graphs showing the debt limit over time show a steep, almost vertical trend. It is not likely to be very long before this new ceiling is met and the government is back on the brink between default and borrowing us further into oblivion. Congressional leaders and the administration acknowledge that the debt limit will need to be increased again next year. They are crossing their fingers that the forecasts are correct and they will not need another increase sooner, even before the 2010 midterm elections.Continually increasing the debt is one of the logical outcomes of Keynesianism, since more government spending is always their answer. It is claimed that government must not stop spending when the economy is so fragile. Government must act. Yet, when times are good, government also increases in size and scope, because we can afford it, it is claimed. There is never a good time to rein in government spending according to Keynesian economists and the proponents of big government.
Free market Austrian economists on the other hand know that times are bad because of the size and scope of government. The economy is fragile because of the overwhelming stranglehold of bureaucracy and taxation of Washington. Any jobs Washington might create through these endless spending programs are paid for through more taxation and debt put on the productive sectors of the economy. Just as insidious is the hidden tax of inflation caused by the Fed and its ever-expanding credit bubble. When the Fed steps in with its solutions, it only devalues the dollars in everyone’s pocket while encouraging more reckless waste on Wall Street. All of this leads to a worsening economy, not an improved one.
And so the downward spiral continues. The worse things get, the more politicians want to spend. The more they spend, the heavier the debt load becomes and the more we have to spend just to maintain our interest payments. As our debt load becomes unsustainable, the alarm of our creditors increases. It is becoming so serious that our credit rating, as a nation, could be downgraded. If this happens, interest on the national debt will increase even more, leading to even higher taxes on Americans and inevitably, price inflation.
Still, Washington is full of talk of more regulation, more taxation and more spending. The Senate is still struggling to pass a massive regulatory increase on the financial sector, even as the stock market suffers more shockwaves. Pay-as-you-go rules give the appearance of fiscal responsibility, but in truth these rules are only used as a justification to raise taxes. Spending programs like healthcare reform, increased military spending, and a recent doubling of destructive foreign aid are viewed by Washington as necessary and reasonable, instead of foolishness we absolutely cannot afford.
The people understand this, which is why there is so much anger directed at politicians. Washington needs to change its thinking and adopt some common sense priorities. The Constitution gives some excellent limitations that would get us back on the right path if we would simply abide by them. The framers of the Constitution understood that only the ingenuity of the American people, free from government interference, could get us through hard times, yet Washington seems bent only on prolonging the agony
The Census and Despotism (Lew Rockwell)
Lew Rockwell on the tyrannical census, which is, from what I understand, even worse than the 2000 version Lew writes about here:
"There went out a decree from Caesar Augustus," says St. Luke on why Mary and Joseph found themselves in Bethlehem, "that all the world should be taxed." Joseph had to go to his own city because the tyrannical Roman government was conducting a census. But the information may have been used for more than just taxation. The Roman government's local ruler later decided he wanted to find the Christ child and kill Him.
Did the government make use of census data to find out where the members of the House of David were? We can’t know for sure, although a later Roman despot did. But we can know that Joseph made a huge error in obeying the census takers in the first place. They were up to no good. In fact, another group of religious Jews in Judea decided that they would not comply with the Roman government’s demand to count and tax them. The group was known as the "Zealots" (yes, that’s where the word came from). They saw complying with the census as equivalent to submitting to slavery. Many ended up paying for their principled stand with their lives.
And yet, their resistance arguably made would-be tyrants more cautious. For 10 centuries after Constantine, when feudal Europe was broken up into thousands of tiny principalities and jurisdictions, no central government was in a position to collect data on its citizens. This is one of the many great merits of radically decentralized political systems: There is no central power that controls the population through data gathering and population enumeration.
Read the rest
"There went out a decree from Caesar Augustus," says St. Luke on why Mary and Joseph found themselves in Bethlehem, "that all the world should be taxed." Joseph had to go to his own city because the tyrannical Roman government was conducting a census. But the information may have been used for more than just taxation. The Roman government's local ruler later decided he wanted to find the Christ child and kill Him.Did the government make use of census data to find out where the members of the House of David were? We can’t know for sure, although a later Roman despot did. But we can know that Joseph made a huge error in obeying the census takers in the first place. They were up to no good. In fact, another group of religious Jews in Judea decided that they would not comply with the Roman government’s demand to count and tax them. The group was known as the "Zealots" (yes, that’s where the word came from). They saw complying with the census as equivalent to submitting to slavery. Many ended up paying for their principled stand with their lives.
And yet, their resistance arguably made would-be tyrants more cautious. For 10 centuries after Constantine, when feudal Europe was broken up into thousands of tiny principalities and jurisdictions, no central government was in a position to collect data on its citizens. This is one of the many great merits of radically decentralized political systems: There is no central power that controls the population through data gathering and population enumeration.
Read the rest
Monday, February 1, 2010
Timing Is Everything (Bill Butler)
Bill Butler says that, because of Keynes, the winners in our crony-socialist society are the politically connected insiders, rather than the patient, prudent capitalists:
Time preference is an economic concept that compares time in relation to an individual’s need for material gratification. Time preference is a comparison, not a measurement. Time preference is immeasurable because it is, by definition, subjective. That is, each individual has a different time preference and each individual’s time preference can change over time. Individuals with a “high time preference,” e.g. newborns, prefer immediate material gratification to time. If these individuals have a need or desire, they do not like to wait. Feed me now or I will cry. People with a “low time preference,” e.g. capitalist lenders, have developed the immaterial virtue of patience, and accordingly have cultivated the ability to choose “time” over material gratification. Even the most patient capitalist at one time was an impatient, bawling newborn. That is the miracle of evolution. People are capable of change.
In one respect, the interaction of people with high and low time preference drives capitalism. People with liquid capital (lenders) agree to give up the immediate gratification that comes from enjoying that capital (spending it on cool stuff) to individuals who need it (cash-poor entrepreneurs and businesses) in exchange for either: (a) a piece of the business (equity) or (b) a loan, which really is a money-lease agreement where the high-time preference individual gets liquid capital (money) now and agrees to pay the low-time preference individual both the amount borrowed (principal) and rent on the borrowed money (interest) over a period of “time.” The borrower chooses money, the investor or lender chooses time (and interest).
It is no surprise that our current system was the spawn of a John Maynard Keynes, the born-on-third-base-and-acts-like-he-just-hit-a-triple English mathematician and lavender secret society aristocrat whose most famous quote, made in response to criticism of prudent, patient low-time preference economists who pointed to “long run” bankruptcy of his economic system, was:
“In the long run, we’re all dead.”
It is now the long run and we are not all dead. Although his followers are moribund, only Keynes is dead. The rest of the West is, as Keynes’ low-time preference critics predicted, bankrupt, a direct consequence of following Keynes’ bankrupt ideology for nearly 70 years.
Read the rest
Time preference is an economic concept that compares time in relation to an individual’s need for material gratification. Time preference is a comparison, not a measurement. Time preference is immeasurable because it is, by definition, subjective. That is, each individual has a different time preference and each individual’s time preference can change over time. Individuals with a “high time preference,” e.g. newborns, prefer immediate material gratification to time. If these individuals have a need or desire, they do not like to wait. Feed me now or I will cry. People with a “low time preference,” e.g. capitalist lenders, have developed the immaterial virtue of patience, and accordingly have cultivated the ability to choose “time” over material gratification. Even the most patient capitalist at one time was an impatient, bawling newborn. That is the miracle of evolution. People are capable of change. In one respect, the interaction of people with high and low time preference drives capitalism. People with liquid capital (lenders) agree to give up the immediate gratification that comes from enjoying that capital (spending it on cool stuff) to individuals who need it (cash-poor entrepreneurs and businesses) in exchange for either: (a) a piece of the business (equity) or (b) a loan, which really is a money-lease agreement where the high-time preference individual gets liquid capital (money) now and agrees to pay the low-time preference individual both the amount borrowed (principal) and rent on the borrowed money (interest) over a period of “time.” The borrower chooses money, the investor or lender chooses time (and interest).
It is no surprise that our current system was the spawn of a John Maynard Keynes, the born-on-third-base-and-acts-like-he-just-hit-a-triple English mathematician and lavender secret society aristocrat whose most famous quote, made in response to criticism of prudent, patient low-time preference economists who pointed to “long run” bankruptcy of his economic system, was:
“In the long run, we’re all dead.”
It is now the long run and we are not all dead. Although his followers are moribund, only Keynes is dead. The rest of the West is, as Keynes’ low-time preference critics predicted, bankrupt, a direct consequence of following Keynes’ bankrupt ideology for nearly 70 years.
Read the rest
Ron Paul: Spending Freeze Not Likely
Dr. Paul's latest Texas Straight Talk:
Last week politicians in Washington made a few things clear about how they really feel about the state of the union. First, they are beginning to hear the growing discontent with the size and scope of government and the broken promises that keep piling up. Certain events in Massachusetts recently made that statement loud, clear and unavoidable. In the face of those events, the powers that be made the determination that some populist rhetoric was in order, and the idea of a spending freeze in Washington was proposed, albeit with several caveats. These caveats to the proposed spending freeze ensure that we are not at any real risk of actually doing anything about spending.
First of all is timing. It wouldn’t go into effect until 2011, which allows plenty of time to increase spending levels quite a bit before they are frozen. If the administration really understood and cared about our spending problems they would not freeze spending a year from now, but cut spending immediately and significantly. But, spending cuts almost never happen in Washington, and they are not likely now or a year from now – if the politicians have anything to say about it.
The second caveat is the huge areas of the budget that are shielded from this freeze. The entire State Department budget is exempt, as are all entitlements, all military industrial spending and almost all foreign aid. Fully 7/8 of federal spending is excluded from this freeze, and some areas to be frozen were actually set to decrease, which means a freeze actually guarantees a higher level of spending.
Especially insulting is the idea that in spite of our own fiscal problems at home, taxpayer dollars will continue to be sent overseas in the form of foreign aid where it often does more harm than good. When need is demonstrated to Americans and they can afford it, they can be counted on for a tremendous outpouring of private, voluntary charity to worthy aid organizations, as we recently saw in Haiti. By contrast, government-to-government aid is taken from the poor by force and too often enriches the corrupt. It is counterproductive and wasteful. But the idea of eliminating, freezing, or reducing foreign aid is not up for serious debate any time soon.
The third caveat is what is included in the freeze that would make it politically impossible to pass Congress, for example air traffic controllers salaries, education, farm subsidies and national parks.
I do not necessarily want a cut in spending in this country - I just want to change who does the spending. The spending should be done by the people who earn the money, if they choose, and on what they choose, without any government interference. That is what makes the economy work. Politicians should stick to the very limited roles given them by the constitution instead of allocating such a sizeable portion of our capital and intervening through regulations and tax policy. But because politicians have disregarded the constitution, and the people have no idea what rule they will break next, there is already a very real spending freeze underway in this economy, by the people. If government would stick only to what it was authorized to do, and leave the rest to the people, most of these problems would resolve themselves.
Last week politicians in Washington made a few things clear about how they really feel about the state of the union. First, they are beginning to hear the growing discontent with the size and scope of government and the broken promises that keep piling up. Certain events in Massachusetts recently made that statement loud, clear and unavoidable. In the face of those events, the powers that be made the determination that some populist rhetoric was in order, and the idea of a spending freeze in Washington was proposed, albeit with several caveats. These caveats to the proposed spending freeze ensure that we are not at any real risk of actually doing anything about spending. First of all is timing. It wouldn’t go into effect until 2011, which allows plenty of time to increase spending levels quite a bit before they are frozen. If the administration really understood and cared about our spending problems they would not freeze spending a year from now, but cut spending immediately and significantly. But, spending cuts almost never happen in Washington, and they are not likely now or a year from now – if the politicians have anything to say about it.
The second caveat is the huge areas of the budget that are shielded from this freeze. The entire State Department budget is exempt, as are all entitlements, all military industrial spending and almost all foreign aid. Fully 7/8 of federal spending is excluded from this freeze, and some areas to be frozen were actually set to decrease, which means a freeze actually guarantees a higher level of spending.
Especially insulting is the idea that in spite of our own fiscal problems at home, taxpayer dollars will continue to be sent overseas in the form of foreign aid where it often does more harm than good. When need is demonstrated to Americans and they can afford it, they can be counted on for a tremendous outpouring of private, voluntary charity to worthy aid organizations, as we recently saw in Haiti. By contrast, government-to-government aid is taken from the poor by force and too often enriches the corrupt. It is counterproductive and wasteful. But the idea of eliminating, freezing, or reducing foreign aid is not up for serious debate any time soon.
The third caveat is what is included in the freeze that would make it politically impossible to pass Congress, for example air traffic controllers salaries, education, farm subsidies and national parks.
I do not necessarily want a cut in spending in this country - I just want to change who does the spending. The spending should be done by the people who earn the money, if they choose, and on what they choose, without any government interference. That is what makes the economy work. Politicians should stick to the very limited roles given them by the constitution instead of allocating such a sizeable portion of our capital and intervening through regulations and tax policy. But because politicians have disregarded the constitution, and the people have no idea what rule they will break next, there is already a very real spending freeze underway in this economy, by the people. If government would stick only to what it was authorized to do, and leave the rest to the people, most of these problems would resolve themselves.
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