By RonPaul.com on September 20, 2013
By RonPaul.com on November 25, 2013
by Ron Paul
After a year of talks over the post-2014 US military presence in Afghanistan, the US administration announced last week that a new agreement had finally been reached. Under the deal worked out with Afghan President Hamid Karzai, the US would keep thousands of troops on nine military bases for at least the next ten years.
It is clear that the Obama Administration badly wants this deal. Karzai, sensing this, even demanded that the US president send a personal letter promising that the US would respect the dignity of the Afghan people if it were allowed to remain in the country. It was strange to see the US president go to such lengths for a deal that would mean billions more US dollars to Karzai and his cronies, and a US military that would continue to prop up the regime in Kabul.
Just as the deal was announced by Secretary of State John Kerry and ready to sign, however, Karzai did an abrupt about-face. No signed deal until after the next presidential elections in the spring, he announced to a gathering of tribal elders, much to the further embarrassment and dismay of the US side. The US administration had demanded a signed deal by December. What may happen next is anybody’s guess. The US threatens to pull out completely if the deal is not signed by the end of this year.
Karzai should be wary of his actions. It may become unhealthy for him. The US has a bad reputation for not looking kindly on puppet dictators who demand independence from us.
Yet Karzai’s behavior may have the unintended benefit of saving the US government from its own worst interventionist instincts. The US desire to continue its military presence in Afghanistan – with up to 10,000 troops – is largely about keeping up the false impression that the Afghan war, the longest in US history, has not been a total, catastrophic failure. Maintaining a heavy US presence delays that realization, and with it the inevitable conclusion that so many lives have been lost and wasted in vain. It is a bitter pill that this president, who called Afghanistan “the good war,” would rather not have to swallow.
The administration has argued that US troops must remain in Afghanistan to continue the fight against al-Qaeda. But al-Qaeda has virtually disappeared from Afghanistan. What remains is the Taliban and the various tribes that have been involved in a power struggle ever since the Soviets left almost a quarter of a century ago. In other words, twelve years later we are back to the starting point in Afghanistan.
Where has al-Qaeda gone if not in Afghanistan? They have branched out to other areas where opportunity has been provided by US intervention. Iraq had no al-Qaeda presence before the 2003 US invasion. Now al-Qaeda and its affiliates have turned Iraq into a bloodbath, where thousands are killed and wounded every month. The latest fertile ground for al-Qaeda and its allies is Syria, where they have found that US support, weapons, and intelligence is going to their side in the ongoing war to overthrow the Syrian government.
In fact, much of the US government’s desire for an ongoing military presence in Afghanistan has to do with keeping money flowing to the military industrial complex. Maintaining nine US military bases in Afghanistan and providing military aid and training to Afghan forces will consume billions of dollars over the next decade. The military contractors are all too willing to continue to enrich themselves at the expense of the productive sectors of the US economy.
Addressing Afghan tribal elders last week, Karzai is reported to have expressed disappointment with US assistance thus far: “I demand tanks from them, and they give us pickup trucks, which I can get myself from Japan… I don’t trust the U.S., and the U.S. doesn’t trust me.”
Let us hope that Karzai sticks to his game with Washington. Let the Obama administration have no choice but to walk away from this twelve-year nightmare. Then we can finally just march out.
By RonPaul.com on November 21, 2013
By RonPaul.com on November 18, 2013
by Ron Paul
Last Thursday the Senate Banking Committee held hearings on Janet Yellen’s nomination as Federal Reserve Board Chairman. As expected, Ms. Yellen indicated that she would continue the Fed’s “quantitative easing” (QE) polices, despite QE’s failure to improve the economy. Coincidentally, two days before the Yellen hearings, Andrew Huszar, an ex-Fed official, publicly apologized to the American people for his role in QE. Mr. Huszar called QE “the greatest backdoor Wall Street bailout of all time.”
As recently as five years ago, it would have been unheard of for a Wall Street insider and former Fed official to speak so bluntly about how the Fed acts as a reverse Robin Hood. But a quick glance at the latest unemployment numbers shows that QE is not benefiting the average American. It is increasingly obvious that the Fed’s post-2008 policies of bailouts, money printing, and bond buying benefited the big banks and the politically-connected investment firms. QE is such a blatant example of crony capitalism that it makes Solyndra look like a shining example of a pure free market!
It would be a mistake to think that QE is the first time the Fed’s policies have benefited the well-to-do at the expense of the average American. The Fed’s polices have always benefited crony capitalists and big spending politicians at the expense of the average American.
By manipulating the money supply and the interest rate, Federal Reserve polices create inflation and thereby erode the value of the currency. Since the Federal Reserve opened its doors one hundred years ago, the dollar has lost over 95 percent of its purchasing power —that’s right, today you need $23.70 to buy what one dollar bought in 1913!
As pointed out by the economists of the Austrian School, the creation of new money does not impact everyone equally. The well-connected benefit from inflation, as they receive the newly-created money first, before general price increases have spread through the economy. It is obvious, then, that middle- and working-class Americans are hardest hit by the rising level of prices.
Congress also benefits from the devaluation of the currency, as it allows them to increase welfare- and warfare-spending without directly taxing the people. Instead, the increase is only felt via the hidden “inflation tax.” I have often said that the inflation tax is one of the worst taxes because it is hidden and because it is regressive. Of course, there is a limit to how long the Fed can facilitate big government spending without causing an economic crisis.
Far from promoting a sound economy for all, the Federal Reserve is the main cause of the boom-and-bust economy, as well as the leading facilitator of big government and crony capitalism. Fortunately, in recent years more Americans have become aware of how the Fed is impacting their lives. These Americans have joined efforts to educate their fellow citizens on the dangers of the Federal Reserve and have joined efforts to bring transparency to the Federal Reserve by passing the Audit the Fed bill.
Auditing the Fed is an excellent first step toward restoring a monetary policy that works for the benefit of the American people, not the special interests. Another important step is to repeal legal tender laws that restrict the ability of the people to use the currency of their choice. This would allow Americans to protect themselves from the effects of the Fed’s polices. Auditing and ending the Fed, and allowing Americans to use the currency of their choice, must be a priority for anyone serious about restoring peace, prosperity, and liberty.
By RonPaul.com on November 11, 2013
by Ron Paul
One of the least discussed, but potentially most significant, provisions in President Obama’s budget is the use of the “chained consumer price index” (chained CPI), to measure the effect of inflation on people’s standard of living. Chained CPI is an effort to alter the perceived impact of inflation via the gimmick of “full substitution.” This is the assumption that when the price of one consumer product increases, consumers will simply substitute a similar, lower-cost product with no adverse effect. Thus, the government decides your standard of living is not affected if you can no longer afford to eat steak, as long as you can afford to eat hamburger.
The problem with “full substitution” should be obvious to anyone not on the government payroll. Since consumers did not choose to buy lower-priced beef before inflation raised the price of steak, they obviously preferred steak. So if the Federal Reserve’s policies create inflation that forces you to purchase hamburger instead of steak, your standard of living is lowered. CPI already uses this sort of substitution to mask the costs of inflation, but chained CPI uses those substitutions more frequently, thereby lowering the reported rate of inflation.
Supporters of chained CPI also argue that the government should take into account technology and other advances that enhance the quality of the products we buy. By this theory, increasing prices signal an increase in our standard of living! While it is certainly true that advances in technology improve our standard of living, it is also true that, left undisturbed, market processes tend to lowerthe prices of goods. Remember the mobile phones from the 1980s? They had limited service, constantly needed charging, and were extremely expensive. Today, almost all Americans can easily afford a mobile device to make and receive calls, texts, and e-mails, as well as use the Internet, watch movies, read books, and more.
The same process occurred with personal computers, cars, and numerous other products. If left alone, the operations of the market place will deliver higher quality and lower prices. It is only when the government interferes with the operation of the market, especially via fiat money, that consumers must contend with constant price increases.
The goal of chained CPI is to decrease the government’s obligation to meet its promise to keep up with the cost of living in programs like Social Security. But it does not prevent individuals who have a nominal increase in income from being pushed into a higher income bracket. Both are achieved without a vote of Congress.
Noted financial analyst Peter Schiff correctly calls chained CPI a measurement of the cost of survival. Instead of using inflation statistics as a political ploy to raise taxes and artificially cut spending, the President and Congress should use a measurement that actually captures the eroding standard of living caused by the Federal Reserve’s inflationary policies. Changing government statistics to exploit the decline in the American way of life and benefit big spending politicians and their cronies in the big banks does nothing but harm the American people.
By RonPaul.com on November 4, 2013
by Ron Paul
October was Iraq’s deadliest month since April, 2008. In those five and a half years, not only has there been no improvement in Iraq’s security situation, but things have gotten much worse. More than 1,000 people were killed in Iraq last month, the vast majority of them civilians. Another 1,600 were wounded, as car bombs, shootings, and other attacks continue to maim and murder.
As post-“liberation” Iraq spirals steadily downward, Prime Minister Nuri al-Maliki was in Washington last week to plead for more assistance from the United States to help restore order to a society demolished by the 2003 US invasion. Al-Qaeda has made significant recent gains, Maliki told President Obama at their meeting last Friday, and Iraq needs more US military aid to combat its growing influence.
Obama pledged to work together with Iraq to address al-Qaeda’s growing presence, but what was not said was that before the US attack there was no al-Qaeda in Iraq. The appearance of al-Qaeda in Iraq coincided with the US attack. They claimed we had to fight terror in Iraq, but the US invasion resulted in the creation of terrorist networks where before there were none. What a disaster.
Maliki also told President Obama last week that the war in next-door Syria was spilling over into Iraq, with the anti-Assad fighters setting off bombs and destabilizing the country. Already more than 5,000 people have been killed throughout Iraq this year, and cross-border attacks from Syrian rebels into Iraq are increasing those numbers. Again, what was not said was that the US government had supported these anti-Assad fighters both in secret and in the open for the past two years.
Earlier in the week a group of Senators – all of whom had supported the 2003 US invasion of Iraq – sent a strongly-worded letter to Obama complaining that Maliki was far too close to the Iranian government next door. What was not said was that this new closeness between the Iraqi and Iranian governments developed under the US-installed government after the US invasion of Iraq.
Surely there is plenty of blame that can be placed on Maliki and the various no-doubt corrupt politicians running Iraq these days. But how was it they came to power? Were we not promised by those promoting the war that it would create a beach-head of democracy in the Middle East and a pro-American government?
According to former Treasury Secretary Paul O’Neill, in early 2001 as the new Bush administration was discussing an attack on Iraq, then-Defense Secretary Donald Rumsfeld said, “Imagine what the region would look like without Saddam and with a regime that’s allied with US interests. It would change everything in the region and beyond it. It would demonstrate what US policy is all about.”
We see all these years later now how this ridiculous this idea was.
I have long advocated the idea that since we just marched in, we should just march out. That goes for US troops and also for US efforts to remake Iraq, Afghanistan, Libya, and everywhere the neocon wars of “liberation” have produced nothing but chaos, destruction, and more US enemies overseas. We can best improve the situation by just leaving them alone.
The interventionists have unfortunately neither learned their lesson from the Iraq debacle nor have they changed their tune. They are still agitating for regime change in Syria, even as they blame the Iraqi government for the destabilization that spills over. They are still agitating for a US attack on Iran, with Members of Congress introducing legislation recently that would actually authorize US force against Iran.
It looks like a very slow learning curve for our bipartisan leaders in Washington. It’s time for a change.
By RonPaul.com on October 21, 2013
by Ron Paul
Washington, DC, Wall Street, and central bankers around the world rejoiced this week as Congress came to an agreement to end the government shutdown and lift the debt ceiling. The latest spending-and-debt deal was negotiated by Congressional leaders behind closed doors, and was rushed through Congress before most members had time to read it. Now that the bill is passed, we can see that it is a victory for the political class and special interests, but a defeat for the American people.
The debt ceiling deal increases spending above the levels set by the “sequester.” The sequester cuts were minuscule, and in many cases used the old DC trick of calling reductions in planned spending increases a cut. But even minuscule and phony cuts are unacceptable to the bipartisan welfare-warfare spending collation. The bill also does nothing to protect the American people from the Obamacare disaster.
As is common in bills drafted in secret and rushed into law, this bill contains special deals for certain powerful politicians. The bill even has a provision authorizing continued military aid to opponents of the Ugandan “Lord’s Resistance Army,” which was the subject of the widely-viewed “Kony 2012” YouTube videos. Most of these unrelated provisions did not come to public attention until after the bill was passed and signed into law.
Members of Congress and the public were told the debt ceiling increase was necessary to prevent a government default and an economic crisis. This manufactured fear supposedly justified voting on legislation without allowing members time to even read it, much less to remove the special deals or even debate the wisdom of intervening in overseas military conflicts because of a YouTube video.
Congress should have ignored the hysterics. A failure to increase government’s borrowing authority would not lead to a default any more that an individual’s failure to get a credit card limit increase in would mean they would have to declare bankruptcy. Instead, the failure of either an individual or a government to obtain new borrowing authority would force the individual or the government to live within their means, and may even force them to finally reduce their spending. Most people would say it is irresponsible to give a spendthrift, debit-ridden individual a credit increase. Why then is it responsible to give an irresponsible spendthrift government an increase in borrowing authority?
Congress surrendered more power to the president in this bill. Instead of setting a new debt ceiling, it simply “suspended” the debt ceiling until February. This gives the administration a blank check to run up as much debt as it pleases from now until February 7th. Congress can “disapprove” the debt ceiling suspension, but only if it passes a resolution of disapproval by a two-thirds majority. How long before Congress totally abdicates its constitutional authority over spending by allowing the Treasury permanent and unlimited authority to borrow money without seeking Congressional approval?
Instead of seriously addressing the spending crisis, most in Congress would rather engage in last-minute brinksmanship and backroom deals instead of taking the necessary action to reign in spending. Congress will only take serious steps to reduce spending when either a critical mass of Americans pressures it to cut spending, or when investors and foreign countries stop buying US government debt. Hopefully, those of us who understand sound economics can convince enough of our fellow citizens to pressure Congress to make serious spending cuts before Congress’s reckless actions cause a total economic collapse.
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