Ron Paul Exposes Bizarre Spending Habits at the Federal Reserve & State Department

Bizarre Spending Habits

by Ron Paul

Last week I had the opportunity to bring up spending and transparency in two important hearings. On Wednesday I questioned Federal Reserve Chairman Ben Bernanke on some highly questionable uses of funds at the Federal Reserve, and on Thursday I asked Secretary of State Hillary Clinton about exorbitant spending at the State Department.

It is extremely important to continue bringing these issues up, especially in light of our difficult economic times, when so many are out of work, as I saw up close in my district at the Oceans of Opportunity Job Fair in Galveston two weeks ago. Those who are working live with the fear of losing their jobs as they struggle to pay bills. Meanwhile, Washington is talking of increasing their taxes, something voters were promised, clearly and adamantly, would not happen in this administration.

Government also struggles with money, but the struggle centers on how to get more of your money into government coffers. Rather than expanding the Federal budget in the face of economic downturn, we should be focusing on eliminating waste and being the very best stewards of public funds that we can possibly be. Most businesses have had to streamline and cut back in order to survive, and so it is only fair for our government to do the same.

Instead, the State Department is building a $1 billion embassy in London, the most expensive ever built. The plans even include surrounding it with a moat! I asked the Secretary of State about this massive expenditure, and she claimed the funds for this were coming from the sale of other properties. If money can be saved, then save it! Don’t spend it on such an extravagant structure overseas when people back home can’t find jobs or pay bills. Not only that, but the administration has committed to doubling foreign aid. That is one promise that is likely to be kept, despite our economic crisis.

I asked Chairman Bernanke about Federal Reserve agreements with foreign central banks and if he had had any conversations about bailing out Greece, which he flatly denied. However, he recently announced that the Federal Reserve will be looking into Goldman Sachs’ derivative agreements with Greece. Goldman Sachs, as we know, has “too big to fail” status with the Fed, so it is conceivable that any Greece-related catastrophic losses at Goldman Sachs will once again be passed on to taxpayers.

Perhaps most sinister are the revelations in Robert Auerbach’s book “Deception and Abuse at the Fed” that $5.5 billion was sent to Saddam Hussein in the 1980s – money that allowed Iraq to build up its military machine to fight Iran prior to the first Gulf War, the very machine turned against our brave men and women within just a few years! I agree with Bernanke’s characterization of this – it is indeed “bizarre” to think that Americans at the Federal Reserve could engage in this type of behavior, which some have called “criminal”. However, Professor Auerbach served as a banking committee investigator, and as an economist at the Treasury Department and at the Federal Reserve. His claims are hardly without merit. In fact, they are solidly backed by court rulings and other evidence.

The lack of accountability and transparency in our leaders on government spending is appalling. We simply must keep pressing these issues and voicing our objections if we are ever to reverse our failed policies.


  • longshotlouie

    Our Lone Star in Washington

    To the rest of the liberty faithful:
    You are not alone

    • Susan Harkins

      Absolutely Amazing! Thank you for that link, longshot! I will be embedding it on another libertarian-supporting site! True Art behind a True Cause!

  • Thanks! Anyway all that spending is not going to make America more prosperous although our aging infrastructures and buildings fixed! What part of the meaning “JOBS”, “JOBS”, “JOBS”! that our stupid elected officials don’t get? Yes we need health care reform, but not the Government nor companies running the whole show!
    This jobs bill is just another ploy to create temporary and more government jobs!
    I would like to go on more! I don’t want to get carried away!

    • Susan Harkins

      Bottomline, your gripes are well-deserved and shared by most here! I certainly hear ya!

      • Thanks again Sue! I have to admit I’m uninsured and I am looking for a free (expensive handout)! However I say kill this horrible bill! Start from scratch and do it step by step! This jobs bill that congress passed is another sham that will not create good paying jobs! Just more outsourcing! It’s another indirect free trade agreement in disguise!

  • Susan Harkins

    Hey Bottomline — love your comments on this site. You bring up an interesting notion about congress “spending our money”. A lot of people say that in posts that I have read. I would like to add something to this notion, for everyone to think about. Here goes: Why are we even agreeing to this notion that it is “our money” being spent? We are not printing it, we are not deflating its value — we have no control over it. Given that, why in the hell would someone want to claim something which they have absolutely no control over? My take on it is this: The government is spending “their money” (as IOUs) and turning around and trying to convince the public that it is taxpayer money. WTF is that? They spend and turn to us and say, “you guys will pay for it in the end because we will tax you for it.”

    I don’t really care to participate that that kind of nonsense. It is NOT my money (once it was stolen from me in the form of taxes), and it is NOT my debt. They can spend “their money (printed or stolen) all they wish, but they CERTAINLY have no right to turn to me and tell me that I (or my children and grandchildren) am/are responsible for paying off the IOU that THEY created. The problem is a two-parter here: 1) Gov’t steals wealth from its citizens in the form of taxes, money printing, and creating debt obligations; and 2) U.S. citizens are classically conditioned to believe that they OWN the fiat money and its associated debt; and have no choice but to be responsible for it and pay taxes to cover its associated debt. WE DONT CONTROL OR OWN THAT PAPER AND ARE NOT OBLIGATED TO IT! Once we get this mindset clear, we might be in a position to go after the government and tear down their schemes/infrastructure of wealth confiscation and debt allocation. Only then, will we have the fortitued and clear sight to clean out the corruption, remove the Federal Reserve and the IRS, and fix our monitary system.

  • I don’t know! We are being duped once again and this legislation is weak and pointless

  • Jack

    Well over 2/3 of Congress have passed HR1207. Why hasn’t this audit happened? The game is up.Copenhagen didn’t happen and there will be no carbon taxes for their new world order.

    Both China and Russia has outsmarted these foolish wreckers.They thought that a monetary coup would give them world power.The West now is left with little productive capacity and China is on the rise technologically/scientifically.

    They are looking towards war as a solution to failed Western economies.More stupidity from pea brained morons. You cannot have limited nuclear conflicts.The anti is soon upped in a fluster of panic.

    The fools couldn’t pull off 911 without major mistakes.What chance have we all in global conflict with hairy chested idiots like these running the show?

  • Thank You for updating us weekly with what has been going on over recent times and the past! & also doing a investigation on where our money is going and finding out what kinds of frauds that the Feds and this administration is plotting! Keep up the great work!