Ron Paul: Economics 101 Is Not Rocket Science!





by Ron Paul

Last week the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year– the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.

While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.

As Paul Roderick Gregory explained in a recent Forbes column, CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits – no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy. Neither is true, of course.

CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years.

Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government. If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much.

If we simply allowed markets to work free of governmental or Federal Reserve interference, bad debt would be liquidated relatively quickly and malinvestment would be curtailed. Scaled-back regulations would encourage businesses to expand. Lower taxes would jump start investment and spur job creation.

This is not rocket science, it is Economics 101. All it would take is for government to get out of the way. There would be some short term pain, of course, but only by allowing the bubble to burst and bad debt to liquidate can we ever hope to begin building a real economy again.

The CBO report was alarming to most simply because they know neither party will take the steps necessary to avoid eventual fiscal calamity. Instead, despite their rhetoric, both parties want to maintain the fantasy that “deficits don’t matter.” But the CBO report, combined with what is happening in Greece and the European Union, should finally make the undeniable case that economic realities apply even to industrialized first world economies. We must take concrete steps today to avoid having America become the next Greece.



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153 Comments:

  1. I think your in denial mate - this is catostrophic what rand has done - and ron becuase he did consult with him as schiff asked - also have the rp campaign email list been sold / given to to romney campaign looks like it has - no this is 101 sold out - you cant back romney and claim to be onside of liberty peace and freedom - sorry but its time to move on from the pauls though take his message - i dont think we will ever hear from again.

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  2. DR PAUL! WHAT IS "JACK HUNTER" TRYING TO PREPARE US FOR WITH HIS ARTICLES ON YOUR CAMPAIGN WEBSITE??????
    Say it ain't so, Joe...

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  3. RAND Paul interview — I watched it several times because it reminded me of something I've seen before.

    It finally came to me — Rand looked and sounded like one of the US hostages that were paraded in 1979 on Iranian TV…very eery….

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    • Ron Paul to WIN — Or America to END 2012!
      (there are no other options!)

      The Mittney will never defeat the BO!

      And If the BO gets reelected, we’ll reach the Point of No Return. (Four more years of this usurper will GUARANTEE the disappearance of the 2nd Amendment — and most likely the disappearance of many visible opponents he has, and certainly the core of the supporters of freedom, in their hundreds of thousands, will be whisked away to FEMA Camps, never to be heard of again — thanks to his NDAA). I would not be surprised if the BO in his second term enacts a law whereby He, for the “good of the people”, can win a third term. All empires end with a dictatorship — and since ours is nearing its end, why expect it to be different. It’s good to be the King — and the BO is a willing Nero (and then his progeny could become a Dynasty).
      ________________________________________________

      On the other hand:

      To his own surprise, Ron Paul has reached a stage that could not have been foreseen at the beginning of his campaign. He actually can depend on more committed patriotic delegates, then Rmoney can count on his forced-through “bound ones”!

      I say, push to Tampa — and see how many will vote their Conscience! We might just get surprised how many patriots still exist in our nation!!

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    • I saw Rand as speaking in what he did not believe — just like the US hostages did on Iranian TV (you could not see the gun at their backs, but knew it was there).

      The main similarities that struck me (whereby the hostages were trying to alert us to read between the lines of what they were forced to say): Changes of posture, blinking and then vacantly staring, fluctuation of the voice, unneeded pauses, aversion of eye contact, then direct eye contact (ALL according to the words spoken).

      Draw your own conclusions — but mine are that Rand was FORCED to do it because of a very good reason (one that may not be discussed now)!

      Only a FOOL would assume that a son of Ron Paul’s wonderful family will betray his father (there is a VALID reason behind this move…and that’s all I’ll say about it)!

      Try and read between the lines on your own (and don’t pass it on when you figure it out)!

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  4. This audio message from Ron Paul is offensive. It's offensive in what is lacking and in the business as usual manner it's presented.

    Ron acts like nothing has happened. As if he is still in the campaign fighting to win the nomination. Uh, hasn't he given up?

    Ron simply wants to educate people in a wimpy and kind manner. Congratulations Ron, you've succeeded in being a kind old man with a spaghetti spine.

    Not a F'n word about his scuttled campaign, delegates fighting fist-to-cuff, tampa, nothing. Just the same ol crap about how corrupt and maligned our government is, no sh!t. This is poop-pie.

    Nothing on the boy Rand.

    Ok, not here, not now, he was just doing his Monday morning bit. Ok, so when? How long is he going to string us along?

    Ron is a nice guy, but I was fooled into thinking he was serious about taking it all the way to Tampa. When Gingrich and Santorum claimed they were going to Tampa I knew they were lying, but when Ron said it I believed him.

    Lies, BS, and more lies.

    Thanks for opening my eyes to the cause of Liberty and Freedom, but you can leave now. Good luck on the speaking circuit, and with your book sales.

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  5. Ron Paul 2012

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  6. Ron Paul R3volution!

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  7. Good glad to hear it.

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  8. You do not know enough to judge the situation, so you shouldn't. I have a hunch that you are right, but it takes me many, many hours to judge a man's character, and so I reserve my judgment of Rand.

    But that means I don't support him, either. I just don't know.

    Romney=Obama=Shithead
    Napolitano=Ron Paul=Yay

    But Rand was never a free market candidate, to me. He was always just a political animal. CNN cares about Rand Paul FAR more than I do.

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  9. You do not know enough to judge the situation, so you shouldn't. I have a hunch that you are right, but it takes me many, many hours to judge a man's character, and so I reserve my judgment of Rand.

    But that means I don't support him, either. I just don't know.

    Romney=Obama=Shithead
    Napolitano=Ron Paul=Yay

    But Rand was never a free market candidate, to me. He was always just a political animal. CNN cares about Rand Paul FAR more than I do.

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  10. Lests stick to the plan ! We souldnt be naive and think that this will be easy and without dirty tricks....!

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  11. Lests stick to the plan ! We souldnt be naive and think that this will be easy and without dirty tricks....!

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  12. By the was I don't give a rats ass about Rand I just want the "real Ron Paul" to please stand up!

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  13. You cannot fight corrupt and criminal people with nice words !

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  14. You cannot fight corrupt and criminal people with nice words !

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  15. I know I know "we are all Ron Paul" except I'm not running for president. He better show up soon because he is the guy that this campaign is about. I can just see Tampa now, oh he's a little late, perhaps he's been stuck in the TSA in Dallas. Show the hell up!,,

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  16. The good doctor is back to the business at hand, I respect that. The revolution continues...

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  17. Not knowing that Rand Paul just stuck a knife in your back is what makes you an ass.

    Thinking the Paul's were threatened, trying to dream up some reason for why they sold out their principals is what makes you an ass.

    Listening to Ron Paul's campaign tell you to "hide your way to victory", and believing it was legitimate, is what made you an ass.

    Thinking you'll ever "know anything" when you bury your head in the sand, is what leaves you looking like an ass.

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  18. "I'm glad we are going through this reboot of movement Ron Paul helped start, just by being Ron Paul."

    That's called sycophancy. You loved Ron Paul for being Ron Paul? It was never about being in a cult of personality for me. It was about having integrity to a set of principals that I support. I still support those principals, but the Paul's don't.

    They support Romney.

    I turned away from a sell out whore who's going to go shill for a man that represents everything you claim to oppose.

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  19. Yeah... It's not fair to compare most people to Ron... Rand is okay, I think... but I don't give him extra credit for being a relative of Ron, per se. He's a decent tea-party'ish candidate. He seems like a decent dude.
    And I remember Ron from the 80's. He was a firebrand... he mellowed and tempered. Perhaps Rand will.

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  20. Ron Paul, you can't change the Mafia from the inside.

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