by Ron Paul
French businessman and economist Jean-Baptiste Say is credited with identifying the fundamental economic principle that aggregate demand for goods in an economy will equal the aggregate supply of goods when markets are permitted to operate. Or in Say’s words, “products are paid for with products.”
English classical economist David Ricardo, among others, more fully developed this principle into what has become known as “Say’s Law.” Say’s Law, according to Ricardo, leads us to understand that market equilibrium for goods is constant. This simply means that markets, when left alone by government planners or other fraudulent actors, inexorably tend toward an “equilibrium price” which eventually balances supply and demand for any particular good. Thus markets will clear themselves of any surpluses or shortages in the form of excess supply and demand.
This important corollary of Say’s Law– that markets clear– is critical to understanding the moribund US housing market. In housing, perhaps more than any other good, we see the terrible consequences of government and central bank interference with market forces.
First, the Federal Reserve Bank relentlessly increased the money supply over the last few decades. Much of this newly created money and credit flowed from Fed member banks into the residential and commercial real estate markets, causing prices to rise dramatically prior to the housing bust of 2007.
At the same time, the Fed systematically suppressed interest rates for decades. This led to tremendous malinvestment both by homebuilders and individuals, and encouraged a seedy subprime mortgage industry to make nonviable loans that would not make economic sense under market interest rates.
Congressional meddling in the mortgage market also added tremendously to the problem. Inane legislation like The Community Reinvestment Act literally forced banks to make thousands of loans to bad credit risks. Similarly, Fannie Mae and Freddie Mac put taxpayers on the hook for millions of mortgages that never would meet market underwriting criteria. And of course the real estate and homebuilder lobbies made sure mortgage interest debt (unlike most personal debt) remains tax-deductible.
The ultimate result of these interventions by our caring friends in Congress and the Fed has been the biggest housing bubble and crash in US history, leaving millions of Americans underwater on their mortgages if they have not already lost their houses altogether. Congress and the Fed are directly responsible for millions of shattered lives, and almost unknowable economic damage in the form of trillions of dollars in mortgage backed securities.
The only solution to this mess is to allow the US housing market to clear. All of the bad mortgage debt must be liquidated, whether via foreclosure or bankruptcy. Banks holding substantial mortgages or mortgage backed assets must face the music and adjust their balance sheets to reflect today’s reality. Undoubtedly this will force many banks into immediate insolvency, but such banks must be allowed to fail without receiving another nickel of taxpayer money. Banks took the risks and made money during the bubble years; those who exercised bad judgment must now accept the consequences of their actions.
Never in American history have we needed to adopt a policy of laissez faire more desperately; never has government seemed more determined to artificially prop up an industry. But only by allowing the housing market to clear can we hope to rebuild our shattered economy from a stable foundation. Clearly there will be pain in the short term, but we owe it to younger Americans and future generations to allow the reemergence of a rational housing market.
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Please Support Labeling of All GMO Products
URGENT: Vote Nov. 6th and California Vote YES on Prop. 37. This proposition helps you make informed choices about food you buy and eat.
For more info see his GMO video on Jeffrey’s web: Genetic Roulette Movie .com or visit website: carighttoknow. org/facts
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For more info see his GMO video on Jeffrey’s web: Genetic Roulette Movie .com or visit website: carighttoknow. org/facts
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Please Support Labeling of All GMO Products
URGENT: Vote Nov. 6th and California Vote YES on Prop. 37. This proposition helps you make informed choices about food you buy and eat.
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Please Support Labeling of All GMO Products
URGENT: Vote Nov. 6th and California Vote YES on Prop. 37.
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If only that’s how people thought. It’s more like “Ron Paul has no chance, just vote for Mitt Romney.”
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Write ins are not reported in the majority of states, in many others they arent even counted. If you were a Citizen maybe you would know that, Gary Johnson will get 90million in Govt funding if he gets above 5% at which point bipartisan politics will be over.
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Yeah, that sounds right…All I hear now is that every other libertarian is just riding the “Ron Paul movement.” Ron Paul says himself that he is not the movement and it is the Liberty movement, not his. You really shouldn’t disrespect someone participating in the movement to help us.
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His flaw was putting a traitor like Jesse Benton in charge of his campaign.
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There is only 1 “r” in Gary Johnson NOT 2.
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ROMNEY=OBAMA
ENJOY DEATH BITCH!!!!!
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1:13 Ron Paul adding some auto-tune to his Texas Straight Talk series.
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not so fast mr johnson! /watch?v=uTihklVR52M&feature=plcp and /watch?v=jLq7NOB1Xm4&feature=plcp
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Most states don’t count write in votes. Garry Johnson is the only candidate (beside Obama and Romney) that will be listed on the ballot in every state. A vote for Garry Johnson now sends a message to the GOP they missed the boat on Ron Paul, and helps the libertiarian party get to the debates in 2016.
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damn i understand ppl like ron paul more than johnson but saying “fuck johnson” wtf…
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Well, most of us who know what is going on, realize that all elections are pre-fixed as to whom the top two candidates will be. So remaining willingly ignorant is alwys a sure sign you are going to be dissapointed in the results. However, in this case, the entire world is going to hell in a handbasket. But this time, it’s for real. Obama is the anti-christ.
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Been nice knowing you………enjoy death
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Whats wrong with Gary Johnson?
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GARY JOHNSON OR DIE
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If they got 5% of the vote they’d just change it to 7%, are you really that dumb to believe a libertarian will be on the debate in 2016?
Vote Ron Paul
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Gary Johnson for liberty 2012!
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Thanks for the information Dr Paul.
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IAMHEWHOAM: do you devote 24 hours of every day posting grade-school level comments on Ron Paul videos? Every single one of them has your grammar sputem all over them.
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Voted Paul in the primary, voting Johnson in the general election.
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He lost the primary he didn’t walk away… He’s still a congressman from Texas. That’s why they’re called Texas Straight Talk.
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Fuck that. As much as I like Ron, if he was serious about trying to win the election he would have switched to third party after the primary. The reason he didn’t do so is likely because of his son’s political aspirations. Gary Johnson wasn’t the guy who put this Jesse Benton character in charge of Ron’s campaign either.
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Cmon lol, that’s just mean, there are plenty of smart individuals who disagree with us. Just because they disagree with us doesn’t mean they’re stupid.
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right there with you on that
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wRONg Paul can’t even read from a script without mispronouncing the names of the people whose ideas he’s parroting! He’s not even qualified to see over a piggy bank! What a fuckin’ JACKASS! lol
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To fix what Obama has done to our Economy is going to be painful but it’s better than becoming a slave! So, GO RON PAUL because MONEY COMES and MONEY GOES but FREEDOM is Priceless!
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No thanks, a vote for Obama is a vote for Romney. They have the same stances on the majority of social, foreign policy and economic issues, so you shut the fuck up and learn the facts.
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Do you know what willfully ignorant means?
It means you want to stay in the dark.
You cannot reason or convince people who are unwilling to be educated and learn.
Look at how many people are supporting Romney and Obama when they are clearly the same and don’t give a shit about liberty.
Ron bet on the ability to make stupid people smart.
and he lost.
However you are right and Ron is right that you don’t need 51%.
Only a third of the population overthrew the brits.
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the whole thing is defacto
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Listen up Ron Paul supporters!
Here is the PAINFUL TRUTH about all of the Gary Johnson supporters lying to all of us! Ron Paul officially endorsed and supported the write in votes for his presidency in 2012!: youtube . com/watch?v=z9LqrXz3Lp4
RON PAUL 2012!
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I am voting Ron Paul. It’s very scary how easily the sheep around me are led so easily. They repeat what the media tells them like parrots. We are heading down the road to Greece’s fiscal nightmare affording only half of what our government actually does and the sheeple chew their cud with blissful indifference. Neither candidate is addressing the issue and will continue to spend when elected.
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this is a computer recording-theses cock sukers killed paul!!!!!!!!!!!!
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