by Ron Paul

Politicians did not get much time to pat themselves on the back for supposedly rescuing the economy with the debt limit deal last week. The ink was barely dry when Standard & Poor’s downgraded the US debt ratings anyway, roiling world financial markets. Anyone who has taken an honest look at the government’s fiscal situation, taken into account how Washington works and the direction it is going would have a very difficult time arguing with S&P’s decision, although a strong case can be made that this was too incremental a downgrade and that it took far too long for S&P to admit the obvious.

Nonetheless, the administration nitpicked over a $2 trillion “mistake”. S&P rejoined with the fact that $2 trillion here or there hardly makes a difference in the time frame under discussion. That, if nothing else, should tell you the magnitude of the problem. $2 trillion has become a drop in the bucket.

S&P cited Congress’s inability to act like grownups and make necessary, meaningful cuts, which is true. I must take issue however, with their suggestion that tax increases are part of the answer. Taking capital out of the private sector, where it can create real value in the form of new jobs and products, and instead giving it to Washington to waste and squander is not the solution. Tax increases may seem penny-wise to some, but in reality they would be very pound-foolish. The government currently takes in $2.2 trillion in taxes per year, which is far too much already. It spends $3.7 trillion, which is ridiculous and criminal. The problem is runaway government spending, not the American people having too much money.

And yet we can’t even have a serious discussion about bringing our troops home and ending our expensive occupations around the world – things the president used to claim to favor!

Even without this downgrade, major investors are waking up to what lies down the road for the United States in fiscal terms. China is showing more signs of losing its taste for our debt. Others are following suit. What we are about to see is the end of the dollar as the reserve currency of the world. When that happens, we will no longer be in a position to have pretend debates about things we probably should spend a little bit less on – we will be forced to implement serious spending cuts as our sources of credit dry up. Of course, we can try to postpone the day of reckoning by printing more money but the resulting “inflation tax” will be far worse than a reduction in government benefits.

Hyperinflation devastates the middle class. After Weimar Germany hyper-inflated their currency in the 1920s, an entire life savings couldn’t buy a postage stamp. The bank wouldn’t even send customers a check for all the money they had saved their whole lives. It wasn’t worth the paper it was printed on or the stamp to send it. This is what is meant when it is said that the middle class gets wiped out. The pieces for this to happen here are all falling into place, and have been since 1971. The only way to avoid that sort of chaos now is for Congress to immediately reduce federal spending and take the Constitution seriously again. The welfare/warfare state will end either way, but winding it down responsibly is a far better way to do it.

Rep. Ron Paul, R-Tex., and his son, Sen. Rand Paul, R-Ky., both blasted Tea Party critics on Monday for suggesting that the conservative movement with which they’re both linked may have had something to do with America’s recent credit downgrade by the ratings agency Standard & Poor’s.

The elder Paul, a longtime lawmaker, staunch libertarian, and presidential candidate, decried the allegations as an “attempt to scapegoat” Tea Party lawmakers. He pinned the downgrade on the Washington establishment.

Transcript

The Fox News Channel special presentation… On the Brink, Answers From the Abyss, now Neil Cavuto.

Neil Cavuto: France is ahead of us, actually as of last night, more than a dozen countries are ahead of us, because for the first time in 70 years, the United States of America is no longer the top financial dog on earth. The investment ratings agency standard board is taking care of that yesterday, officially dinging our top notch AAA rating and kicking us out of the very elite club, that includes the likes of France, Germany, Switzerland, Australia but not us, not now. We are in with Belgium and New Zealand now and just getting our arms around that one not proving easy now, for years, top of the heap, now all but kicked to the curb, and growing fears my friends come Monday morning, we are going to get kicked in the markets, we just don’t know.

Here is what we do know, after all of the spending, the world is essentially telling us we are spent, and the jig is up and the pain could be severe, and we are all over the fallout that could be swift, with the likes of presidential candidates Michele Bachmann, Ron Paul and Herman Cain who say that the spending has got to stop. Democratic Congressman Dennis Kucinich who says that the spending has actually got to double, and Mark Zandi who says both Republicans and Democrats got to talk.

But before that, first this, the latest what’s happening right now. Georgia Republican Jack Kingston calling on Congress to reconvene immediately to pass a new deal with more cuts in the wake of the downgrade, the Congressman will be here later this hour. China taking a shot at us wasting no time saying and I quote “The good old days of borrowing are over.”

In Europe, G7 finance ministers will meet this weekend to discuss the impact of the downgrade and the Dow losing 700 points this week and that was before the S&P announcement. Saudi Arabia the first market on earth to trade since this news and it wasn’t pretty, stocks there down about 5.5%, banking issues in particular getting clobbered. The problem here is not the downgrade, it’s the debt that brought it on, a message it seems to getting lost in this drama, but now with my next guest Republican Presidential candidate Ron Paul on the phone. Congressman you weren’t at all surprised, but what now?

Ron Paul: Well it looks like we’re in for big trouble because we haven’t dealt with the problem, you know I’m surprised it took them so long to downgrade, I didn’t think it should have had that rating for a long, long time, but people are coming around to reality. You wonder about S&P because they’re usually pretty slow, so I think it’s very, very bad and it’s interesting that when we were working on raising the debt limit over my objection, they can say “Well if you don’t raise the debt limit, we’re going to downgrade you” so we raised the debt limit so they downgrade which means that the spending is not under control. But the other thing that bothers me is I read where S&P said that one of the reasons they downgraded was that we weren’t accepting tax increases. So there’s a lot of confused economic ideas out there but I think we’re in for a lot of trouble which is what is what I’ve been saying for a long time.

Neil Cavuto: You know the administration is already pointing fingers at S&P that their math is a little specious and it could be a case of accusing the accused, but what do you make of that?

Ron Paul: You mean about the treasury saying well they’ve made a mistake…

Neil Cavuto: Right… in other words this is kind of S&P’s fault.

Ron Paul: Well, the Congress is making even bigger mistakes because they keep talking about slashing and cutting and all this, but there have been no suggestions of cutting anything. It’s always the cutting from the baseline which is a steady increase and finally the people who are looking at the bonds are realizing it. But to me it’s interesting that although they’re downgrading it, still the world are buying our treasury bills and our bonds and our interest rates [remain low]…

Neil Cavuto: For now, but Congressman, we got to be careful. I guess what I’m asking is, we are concerned about the downgrade and whether it’s going to cost us more just for people to buy our debt and our notes and our bonds and you’re quite right to point out that people have still been pouncing on our securities as good havens. But how long do you really think that will be the case, and are we really more benefiting because the rest of the world just stinks more than we do.

Ron Paul: Yeah, I think that though the market is more powerful than the agencies who grade the bonds and even Congress. Economic laws are powerful which means that if you follow free market economics, interest rates will go up regardless of bond ratings and this might be just the incentive to start the rates going up again. But there’s no way in the world that you can print money endlessly and bailout everybody and spend endlessly and not expect the dollar to be devalued as it is, and it’s a worldwide currency and that’s why this is so serious. Under those conditions, you depreciate the currency, interest rates are destined to go up, it’s just a matter of time.

Neil Cavuto: Alright, when I was in your fine city this past week and you guys cobbled together this deal of which you were very, very critical, as is your son the Senator Rand Paul, the issue came up that if you guys were to cut too much – not you and your son – but if you would have cut too much it would be onerous to the economy at this iffy stage, so is there even going to be an appetite for cutting more spending in this environment?

Ron Paul: No, there isn’t, there is always a special interest that comes up. If you even suggest freezing the budget, that is considered a cut. Freezing the budget is a cut and anybody who has their budget frozen yells and screams. Can you imagine what the military industrial complex would say if you suggested freezing? They’re getting a percentage increase and it’s not enough and that’s the way with every entitlement program there is, so we’re locked in on this course and until we revamp the system entirely, the monetary system, the entitlement notion, the definition of entitlements versus rights, our foreign policy, believe me, within the next year or two, we will be dealing with what kind of country we want in the future and what economic policies we’re going to follow.

Neil Cavuto: You know it’s interesting, I guess it is hard to gauge right now Congressman, but a downgrade could lead to a lot of messier things but we’ll have to watch extremely closely. Congressman, thank you very much, always good seeing you.

Ron Paul: Thank you.

Neil Cavuto: Again to outline that deal that was the source of some of this concern and maybe S&P jumping here. This $2.1 trillion debt deal you hear so much about, it’s $2.1 trillion over 10 years but 70% of those cuts come after the year 2017, $28 billion over the next year hence this criticism by the part of S&P that it really wasn’t much better than the paper it was printed on. Anyway, the stunner from the White House this morning is no word from the White House this morning.

Transcript

Ashley Martella: We’re pleased to have with us on the line now, Texas U.S. Representative and GOP presidential candidate, Ron Paul. He was one of 5 Republicans from the Texas congressional delegation to vote against the so-called Budget Control Act of 2011, which is the debt ceiling increase. Thanks for joining us, sir.

Ron Paul: Thank you, good to be with you.

Ashley Martella: You write on the Hill’s Congress Blog, that there were no real cuts in the legislation, only cuts in projected spending increases. Please explain briefly.

Ron Paul: This is one of the most annoying things about the reporting on what we’ve been trying to do in Washington and what we pretend to be doing. They’re always talking about cuts, cuts, cuts and everybody is screaming, “You can’t cut this, you can’t cut that”. But there are no cuts, there’s a baseline CBO projection that automatically goes up year after year after year. And what they’re talking about is just cutting some of these proposed increases. So it’s a real misleading definition when they talk about cuts. If you had a cut, you would actually have to cut this year. Because anything we do for future years doesn’t hold water anyway, because you can’t tell the next Congress what to do. So it’s basically a fraud.

If they were serious about it and wanted to do it and make a point of changing the way we operate, they could freeze the budget and give everybody the same amount of money they got last year, and that would be, according to the way they calculate, a big cut, because we would be cutting all the proposed increases for the next years to come.

Ashley Martella: Well, you say if we were to go back to 2004 spending levels, we would have a balanced budget right now. Please crunch the numbers for us a bit.

Ron Paul: That is, 2004 would give us enough money to balance the budget right now, that’s like 2.4 trillion dollars. And even now if you freeze the budget, within about 5 years it would be balanced again. But nobody’s quite willing to do that because they think they have to have steady increases. But there’s a strong appetite for government and that is where the problem is. People don’t want to cut back on the militarism and the people don’t want to cut back on anything that looks like it might cut into their check they’re getting from government, and you know a lot of people are getting checks from the government.

Ashley Martella: Our budget has doubled in 10 years, you ask why. Why do you think it has?

Ron Paul: The appetite for government never ends, there are more retired people because of the demographics, less people are coming into the workforce, unemployment rates go up, they can’t control that. So the benefits go up automatically. And it’s endless, there’s always new programs; this week, after we passed that budget, there was a new program, brand new program out of thin air to go around the world and tell other countries what they should do about their religious freedom. And it was a small program, but the first year was going to be a million dollars. And I thought, “Well, why are they starting a new program in the midst of this?” But that is only one little program, I mean there are hundreds and hundreds of programs that are brand new and they keep doing it. They just won’t stop, it’s like an addiction. And they don’t stop because I don’t think they even realize the seriousness of how big this problem is.

Ashley Martella: The Tea Party helped elect candidates it thought would vote to end reckless spending by Congress. Yet, most of the Tea Party backed Republicans voted yes on the bill. Where’s the disconnect here?

Ron Paul: Yea, that’s a tough one, because I think the Tea Party people have helped because it has changed the atmosphere and at least they’re talking about this. But then it has to be awfully discouraging for all of us if they’re not voting against these kinds of programs where we raise the national debt and increase this Super Congress. I mean, it’s a real mess. It represents the fact that there are no easy solutions and people realize that when you do cut, there’s a political liability there. The Tea Party people got there because there was political liability to continue the spending. So that has to be ironed out and it will be ironed out pretty soon because we cannot maintain what we’re doing.

Ashley Martella: You expect there to be a backlash by the Tea Party against the Congressmen they backed who voted yes on this deal?

Ron Paul: Yea, I think there will be, but I don’t think it will be quite the same thing that happened last year when so many were routed. And there are going to be so many people who will be disenchanted. They’ll say, “You mean we did it, we worked hard, we changed the Congress, but we didn’t change the votes?” And I don’t know whether you can keep the people up, I think the people are going to get pretty discouraged one way or the other. But I think if things don’t improve and we don’t get our house in order and get control of this budget, I think there will be a lot of people who are saying, “You know, we sent you over there, but you kept voting for more spending”.

Ashley Martella: If Republicans should win back the Senate next year, as many predict, will that change anything regarding reckless spending?

Ron Paul: Let’s hope so, but it’s no guarantee. Just like I was complaining about when George Bush was in charge and we had the Senate and the House, we didn’t do a very good job. Then the battle becomes between the two factions within the Republican Party; you know, the conservatives versus the big spenders in the Republican Party. So you don’t know, it just depends on who shows up into the Senate. But certainly, the way it’s formulated right now, there’s no way that the conservatives can win a fight and have the Senate support it and then have the President sign a bill.

Ashley Martella: You announced a while back that you were retiring from the House after your current term. Why?

Ron Paul: Well, I wanted to concentrate on the race for the presidency. Last time I ran, I did both and it was distracting and I wanted to make sure that people knew I was very, very serious about the presidential run and I was also content to know that I would be, and am ready to leave the Congress too.

Ashley Martella: The latest Gallup polling shows you with 8% ballot support among all Republicans. Now that compares to 17% for Mitt Romney, and 15% for your fellow Texan, Governor Rick Perry, who hasn’t even announced yet at the time we are recording this. How do you get your numbers up?

Ron Paul: Continue to do what I am doing and just more so, because the numbers depend on which poll you look at. They have been improving, but it is not easy. That means we have to continue to campaign, we have to continue to raise money. We have had some TV out, we hope to have a lot more TV out and the numbers certainly will go up if we do well at Ames next week.

Ashley Martella: Texas congressman and Republican presidential candidate, Ron Paul. Thanks so much and good luck on the campaign trail.

Ron Paul: Thank you, good to be with you.

Ashley Martella: And thank you for watching Newsmax TV.

Transcript

Lou Dobbs: Joining us now for more on job creation and the debt ceiling agreement, Congressman Ron Paul, who voted against raising the debt ceiling. He says the new special committee created by Congress is “disturbing and will be used instead to raise taxes”. Congressman Ron Paul, seeking the Republican Presidential nomination, joins us tonight from Clute, Texas. Good to have you with us, Congressman.

Ron Paul: Thank you, Lou, good to be with you.

Lou Dobbs: You voted again against the debt ceiling. Tell us why.

Ron Paul: Maybe because I’ve never voted for any of the spending essentially over the many years I’ve been in Congress. And I believed that debt was going to be a problem many years ago, and debt is a problem. So you don’t get out of the problem of having too much debt by allowing the Congress to spend a lot more and granting them another 2.4 trillion dollars worth of debt. So it never made any sense to me to do it that way. It just digs the hole much deeper, and then it gets harder for us to get out. So it was a very easy vote for me, but it became much easier when I saw the vehicle they were using to create this “Super Congress.” I mean, where in the world did that come from and what is that going to lead to. That is monstrous. I kept looking and looking, and I can’t find any place in the Constitution where we have the authority to create such a creature as the Super Congress.

Lou Dobbs: Let’s return to you, Congressman Paul. You told me about this super committee. You know, I could never find anything in the Constitution that would satisfy, it seems to me, a reasonable man, namely myself, that there is any constitutional authority for fast track authority for trade agreements. This super committee seems that be in that vein; how will you perceive it?

Ron Paul: That is exactly right. It’s creating committees to do the job and assume the responsibility that Congress should do it. And you’re absolutely right on the trade agreements. I happen to think that these trade agreements and giving this responsibility to the executive branch is absolutely wrong. But it’s not the only area, I think writing regulations is actually writing laws, so I’m way back on what the executive branch should do. But now for the OMB [Office of Management and Budget], it looks to me like with this Super Congress and committee, that if we don’t vote for what they recommend, OMB gets a lot of power, and that’s part of the executive branch and who knows, that’s the area that I think where they may be raising revenues, closing loopholes. Who knows what they might be doing? But it is not a good sign for a constitutional government.

Lou Dobbs: And the Supreme Court has slapped down a lawsuit brought by states and environmental groups that sought to push powers over greenhouse emissions. And the opinion written by Justice Ginsburg made it very clear that the EPA is the source and force in establishing those regulations and enforcing them; a remarkable decision by the Supreme Court. What is your reaction?

Ron Paul: Well, I think it’s rather clear in Article 1 that the Congress is supposed to write the law. This whole idea that any bureaucracy, any agency of government can write all these regulations and they’re the law of the land. One of the most annoying statements I ever heard said was not only do they write the regulations, but what about the statement that Paul Begala said once, “Stroke of the pen, law of the land. Kind of cool.” You know, that tells you what the attitude is about what they think about the Congress and what they think about the American people and what they think about the Constitution.

Lou Dobbs: I think we should point out that was a very young and ebullient Paul Begala at that time.

Ron Paul: He’s settled down now.

Lou Dobbs: And you still recognize him as a fellow Texan, do you?

Ron Paul: Yeah, but I don’t know if he would recognize me, that’s the only thing.

Lou Dobbs: Well, even reluctantly, I’m sure there’s a reciprocity among Texans. Congressman, it’s great to have you with us, always good to talk with you, I appreciate it.

Ron Paul: Thank you, Lou.

Lou Dobbs: Congressman Ron Paul.

Transcript

Reporter: To get some answers on our debt-reducing Super Committee, and the dispute that’s costing the government 30 million dollars a day, I want to bring in a man who knows the ways of Washington and has spent his career, in fact, trying to change them. Ron Paul is a long-time GOP Congressman from Texas whose 2008 run for president inspired a movement – you know it today as the Tea Party. Paul is winding down his congressional career, but running once more for President. He joins me now on the telephone from Lake Jackson, Texas. Thank you for your time, sir. I want to start with the debt deal and the big decisions that you and your colleagues decided to put off. You write today that balancing the federal budget isn’t as hard as most people think. What do you think is the secret?

Ron Paul: We have to just live within our means and live with our income like people are supposed to do. But, you know, what really is difficult is the semantics are so bad because everybody’s talking about cuts and, “Why didn’t we cut this and did we cut this much, and set up this Super Commission, we’re going to cut some more”. No place have we ever discussed any cuts whatsoever, it’s always cuts in the proposed increases.

So this is a difficulty for a person like myself who actually wants to have cuts. But you can’t have cuts unless you change the attitude of the people about what they want from their government. If they think we have to be the policeman of the world and you can’t challenge the entitlement system, there’s no way that we can do this, default is inevitable. And I think the only argument about the default was whether it would be by deflationary pressures – by just not sending out the checks – or what we’re doing today; everybody opted for just printing the money. So the default is coming, we liquidate debt by printing money and having a devalued currency, and I think that’s what the gold is telling us today. We went with the option of the printing press rather than actually facing up to the fact that we are bankrupt.

Reporter: I know that you voted against raising the debt ceiling and you also believe that a freeze in spending would be better than making these cuts at all. Is that correct?

Ron Paul: Well, yes. I would actually have cuts but since nobody is about to do that, why don’t we just settle for freezing it, give everybody what they got last year. But it seems like that would be an easy sell to the American people and it wouldn’t be so threatening. Now everybody says, “Whoa, they’re going to slash all these entitlements”. But they’re not, they’re just cutting what the proposed increases are.

But you know, even if they talk about cutting the military, they get hysterical. But they’re not cuts in the military, they’re actually cuts in proposed increases. So it takes about 4 or 5 years. If we would have frozen the budget about 5 years ago, it would be balanced right now. That is one thing.

The other thing you could do is if you’re so brave as to actually cut something, all you need to do is cut 1% of the budget and do it for about 5 years and you’d get to a balanced budget.

Reporter: What about this super committee, I take it you’re not a fan. Would you join this super committee and be a part of it if asked?

Ron Paul: Well, I’m not going to be asked, I never even thought that through, but it’s a totally unconstitutional committee, so I would have my reservations.

Reporter: Why is it unconstitutional?

Ron Paul: Reneging on our responsibilities and giving it to a small number of people, authority that the Congress should have. But this is a trend that we’ve been going through for a long time, we always deliver more authority to the executive branch and certain commissions and taking the responsibility away from the Congress. I think it’s very, very dangerous.

Reporter: What are you concerned the super-committee will fast-track?

Ron Paul: I think it’s the wrong way to go, so I doubt very much. I know they will never ask me, and I doubt very much if I would want to serve on something like that.

Reporter: I also want to ask you about this, just this tiny dispute that apparently has now 4,000 workers at the FAA furloughed, the federal government isn’t collecting more than a billion dollars now in taxes from the FAA. The administration certainly thinks that you and your colleagues should go back to work and figure this out. I want you to listen to a sound bite here and then we’ll talk about that.

Ray Lahood: We’ve heard a lot of great speeches from members of Congress about creating jobs. They talk the talk but they have not walked the walk. Their speeches ring very hallow to 4,000 FAA employees who were furloughed. Their speeches about jobs ring very hallow to 70,000 construction workers who are not working right in the middle of the construction season on construction projects all over America.

Reporter: Congressman, how is it that you now have 74,000 workers who are not collecting a paycheck, yet Congress is on vacation? How did this happen?

Ron Paul: Well, it’s part of the process and it’s the inability to admit that we’re bankrupt and we do have to cut. So the House did pass a bill recognizing the fact that some of these smaller airports are nothing more than boondoggles, tens of thousands of dollars are being spent per trip by these airplanes going in, so it’s far from a market-oriented program.

And the Senate could have passed it and it would have been more conservative and maybe backed off on some of these programs that aren’t paying, that are just draining the economy. So it’s not exactly that the Congress wouldn’t do anything, it’s the Senate that hasn’t done it. But then again, anytime there’s an attempt, everybody is screaming, “Cut back, cut back”. So they find something where there’s real waste and we shouldn’t be overspending in certain areas, and then the special interests come in and they yell and scream and demagogue the whole issue. So nothing happens.

So sure, the Congress is inapt and I complain about that all the time and I’m voting against all that, but the special interests are part of the problem too. Even like Paul Ryan made an attempt to propose something, I didn’t vote for it because I didn’t think it was enough. But he got really hit hard for this, like, “Oh, you can’t do this”. So the people whose programs are being cut come back in and this is why it is going to be very, very tough and this is the reason why I don’t predict we’re going to get this under control. It’s going to continue and we’re going to continue printing money. And it’s going to stop by economic law, which means the dollars won’t work and that’s what we should be concerned about, not some of these technical factors.

Reporter: Well, I think the people who are furloughed right now are certainly very concerned about this. You heard the administration there, transportation secretary Ray Lahood saying Congress should come back to work and figure this out. You’re running for President, would you want to bring Congress back?

Ron Paul: For this, I think we could have accomplished it before, I think pressure should have been put on the Senate to pass the bill.

Reporter: Alright, Congressman Ron Paul, I appreciate your time and your insight into these issues. We always enjoy having you on the program, thank you very much.

In a recent interview Ron Paul had argued, “We owe $1.6 trillion to the Federal Reserve. But where did they get the money to buy our debt? Well, they created it out of thin air.

So taxpayers keep working hard to pay the interest to the Federal Reserve, as well as to finance these bonds if the Fed wants to take the monies. So I would say that is not a real debt. It’s a fictitious debt. It’s a dishonest debt, and that we’re not obligated.”

HR 2768 currently has no co-sponsors. The bill was referred to the House Committee on Ways and Means. The full text of the bill will be available soon.

Today, 2012 Republican presidential candidate Ron Paul issued a statement outlining his opposition to the debt ceiling deal struck between the White House and Congress. See statement below.

Ron Paul: “While it is good to see serious debate about our debt crisis, I cannot support the reported deal on raising the nation’s debt ceiling. I have never voted to raise the debt ceiling, and I never will.

This deal will reportedly cut spending by only slightly over $900 billion over 10 years. But we will have a $1.6 trillion deficit after this year alone, meaning those meager cuts will do nothing to solve our unsustainable spending problem. In fact, this bill will never balance the budget. Instead, it will add untold trillions of dollars to our deficit. This also assumes the cuts are real cuts and not the same old Washington smoke and mirrors game of spending less than originally projected so you can claim the difference as a ‘cut.’

The plan also calls for the formation of a deficit commission, which will accomplish nothing outside of providing Congress and the White House with another way to abdicate responsibility. In my many years of public service, there have been commissions on everything from Social Security to energy policy, yet not one solution has been produced out of these commissions.

By denying members the ability to offer amendments and only allowing an up-or-down vote that will take place in the hectic time between Thanksgiving and Christmas, this Commission essentially disenfranchises the vast majority of members from meaningfully participating in the debate over reducing spending and balancing the budget. Furthermore, despite the claims of the bill’s proponents, there is nothing to stop the commission from recommending tax increases.

One of the reasons why I humbly suggest that I am the most qualified Presidential candidate is my experience to see and understand the long track record of failure, disappointments, and bad recommendations made by such commissions. Times like these require statesmanship and steady leadership, which I and the grassroots activists who have joined my campaign believe I am uniquely qualified to provide.

What should bother Americans most is that under cover of this debt ceiling circus, we learned from a recent GAO one-time, limited audit that the Federal Reserve secretly pumped $16 trillion into American and foreign banks over three years. All of the Fed’s fat cat cronies were taken care of at the expense of the American public.

To put that into perspective, our entire national debt is $14.5 trillion, and our annual deficit will be about $1.6 trillion, meaning the Federal Reserve created and appropriated more than our entire national debt to banks around the world in a few short years. We have been fighting in Congress these past few weeks over raising our debt ceiling by $2 trillion, an amount the Fed secretly gave away to just one big bank.

For decades, politicians have promised future restraint in exchange for hikes in the debt limit. We are always told that we must act immediately to avoid a crisis. But time and time again, politicians reveal themselves to be untrustworthy, and we soon find ourselves in a crisis being led by the same folks who wish only to maintain the status quo.

I believe in the great American traditions of free markets, sound money, and personal Liberty. But we are moving far away from what made us the greatest nation in human history. We must cut spending and balance our budget now, before it is too late.

Let me be clear. The cuts we must make will not be easy, and there will be difficult times in the short run. But I have the greatest confidence that if we come together as a People, work hard, and do the right things, our country will be back on track in no time and on its way to unprecedented prosperity. But, if we continue to print money and pyramid debt, we will destroy ourselves and lose the promise of America forever.

These difficult times require a President willing to stand against runaway spending. If elected, I will veto any spending bill that contributes to an unbalanced budget, and I will balance the budget in the first year of my term. I will not allow the Federal Reserve to destroy the value of our money by shoveling dollars into the pockets of its banker friends.

I remain committed to working on behalf of the American people to drastically reduce spending and implement fundamental changes that will reform government and restore our nation’s prosperity.”

by Ron Paul

One might think that the recent drama over the debt ceiling involves one side wanting to increase or maintain spending with the other side wanting to drastically cut spending, but that is far from the truth. In spite of the rhetoric being thrown around, the real debate is over how much government spending will increase.

No plan under serious consideration cuts spending in the way you and I think about it. Instead, the “cuts” being discussed are illusory, and are not cuts from current amounts being spent, but cuts in projected spending increases. This is akin to a family “saving” $100,000 in expenses by deciding not to buy a Lamborghini, and instead getting a fully loaded Mercedes, when really their budget dictates that they need to stick with their perfectly serviceable Honda. But this is the type of math Washington uses to mask the incriminating truth about their unrepentant plundering of the American people.

The truth is that frightening rhetoric about default and full faith and credit of the United States is being carelessly thrown around to ram through a bigger budget than ever, in spite of stagnant revenues. If your family’s income did not change year over year, would it be wise financial management to accelerate spending so you would feel richer? That is what our government is doing, with one side merely suggesting a different list of purchases than the other.

In reality, bringing our fiscal house into order is not that complicated or excruciatingly painful at all. If we simply kept spending at current levels, by their definition of “cuts” that would save nearly $400 billion in the next few years, versus the $25 billion the Budget Control Act claims to “cut”. It would only take us 5 years to “cut” $1 trillion, in Washington math, just by holding the line on spending. That is hardly austere or catastrophic.

A balanced budget is similarly simple and within reach if Washington had just a tiny amount of fiscal common sense. Our revenues currently stand at approximately $2.2 trillion a year and are likely to remain stagnant as the recession continues. Our outlays are $3.7 trillion and projected to grow every year. Yet we only have to go back to 2004 for federal outlays of $2.2 trillion, and the government was far from small that year. If we simply returned to that year’s spending levels, which would hardly be austere, we would have a balanced budget right now. If we held the line on spending, and the economy actually did grow as estimated, the budget would balance on its own by 2015 with no cuts whatsoever.

We pay 35 percent more for our military today than we did 10 years ago, for the exact same capabilities. The same could be said for the rest of the government. Why has our budget doubled in 10 years? This country doesn’t have double the population, or double the land area, or double anything that would require the federal government to grow by such an obscene amount.

In Washington terms, a simple freeze in spending would be a much bigger “cut” than any plan being discussed. If politicians simply cannot bear to implement actual cuts to actual spending, just freezing the budget would give the economy the best chance to catch its breath, recover and grow.