Location: CPAC 2010
Date: 02/19/2010

Transcript

Ron Paul: Thank you very much. Thank you. Wow, look at this. Thank you, thank you. It sounds to me like the revolution is alive and well. Wonderful, it’s great to see such a nice crowd. Quite a few here. 10,000 people, all interested in promoting good government, limited government, and personal liberty. I would say this is a grand opportunity for all of us to come together because something is brewing. Something is brewing big. This is a different year than anything we’ve ever experienced before, and I am optimistic to believe that a lot of good is going to come out of what is happening in this country today, whether it is the CPAC meeting or the Tea Party Movements or the recent victories in the elections. But believe me, by the end of this year I think this country is going to be a lot better off.

You know, the one thing I think brings so many of us together and what’s been happening since the last couple of years has been the idea of having change. Matter of fact, somebody won an election using that slogan: “a change”. But there is a change that we want that we haven’t gotten yet. And I think that’s what we’re here to talk about; what kind of change do we really want? And what can we agree on so that we’re not talking about different things? And to me it’s very important that we understand what conservatism means. To me, to be a conservative means to conserve the good parts of America and to conserve our Constitution.

I first got involved in politics in the 1970s because I was very concerned about the financial situation. The Bretton Woods agreement broke down, the gold standard was cast aside and I said, “This will usher in the age of big government”. And that came in under a Nixon administration and since that time we have been struggling. We have been struggling with the conservative message and we have had bits and pieces of this coming together. But we really haven’t had the follow through. We had a revolution of sorts in 1980 with Ronald Reagan. And then, of course, we had 1994 when we took over the Congress and that, of course, was very good, and that was designed to limit government. But government kept growing. Also in the year 2000 we had a remarkable event; something that hadn’t happen in more than 40 or 50 years when there was a Republican president, a Republican congress, a Republican house, and a Republican senate. But we didn’t get the revolution. There was a lot of desire and a lot of pressure by people like you, saying, “What we want is limited government. We want balanced budgets, we want our liberties back.”

You know, and I think what has happened, and I see what our problems are in philosophical terms, not in partisan terms. And I think what happened, especially back in the teens of the last century when Woodrow Wilson was president, and those boos are rightly deserved, let me tell you. But I also use this as an opportunity to put a little pressure on conservatives who had some of their views changed over time. Just think of what would Woodrow Wilson stood for. He stood for world government; he wanted an early United Nations, League of Nations. But it was the conservative Republicans that stood up against it. But how often have you heard today, maybe you did, but how many people are saying, “It’s the conservative position to not even belong to the United Nations”?

1913 wasn’t a very good year. 1913 gave us the income tax, the 16th amendment and the IRS. And what’s wrong with getting rid of the income tax and the 16th amendment. I think it would be a great idea. And, of course, I’ve already taken a very modest position on the monetary system. I do take the position that we should just end the Fed.

But there were other things that went on during Wilson’s administration. Our foreign policy changed, I think it was for the negative. His goal was to make the world safe for democracy and he prodded us into a war that we should have never gotten into. And we as conservatives, too many conservatives have accepted this principle that it is our moral and legal constitutional responsibility to engage ourselves and make the world safe for democracy. I don’t think it’s possible.

Matter of fact, if you think back just a short time ago to the year 2000 when George Bush was running, guess what he ran on, and guess what he won on? He was running against an interventionist foreign policy, he was running against Clinton’s policy of intervention and nation building and being the policeman of the world. And he was elected on that. There’s nothing wrong with being a conservative and come up with a conservative belief in foreign policy where we have a strong national defense and we don’t go to war so carelessly.

What is not conservative about saying, “Don’t go to war unless we go to war properly with a full declaration of war, and no other way”? Unconstitutional wars cost a lot of money, they undermine our constitutional principles, and, as Randolph Bourne said, “War is the health of the state”. So if you like small government, you need to work hard and have a strong national defense that is not so militant. Personal liberty is the purpose of government; to protect liberty, not to run your personal lives, not to run the economy, and not to pretend that we can tell the world how they ought to live.

Now for those who disagree, I have a few comments. Because I understand the disagreement; I’ve been there and I’ve been in the service and I’ve spent 5 years in service and I know all the argument. But the bottom line, eventually, for all conservatives and all constitutionalists will be, how are we going to pay for it? It’s driving us to bankruptcy. We are now spending 1 trillion dollars a year to manage our world empire. We’re in a 140 countries, we have 700 bases. And, quite frankly, have you noticed the debt is exploding and it’s not all because of Medicare. And believe me, we don’t have enough conservatives on the hill to start tinkering with Medicare; they’re not going to cut that.

So eventually this country probably won’t do what I suggest – that we back off and back down, spend only the money that’s constitutional. I’ve made to promises to my district. I will always vote what I have promised, I will always vote the Constitution, as well as I will not vote for one single penny that isn’t paid for, because debt is the monster, debt is what’s going to eat us up, and that is why our economy is on the brink. We haven’t had the collapse and we haven’t had the correction. We are on the brink of a financial cataclysmic event because what we’re leading to because we’re spending too much money, we borrowed too much. At the present time, the Chinese have backed off from what they’re loaning us, interest rates are starting to go up, inflation factors are coming up. Believe me, that next step is a currency crisis because there will be a rejection of the dollar. The rejection of the dollar is a big, big event.

And then your personal liberties are going to be severely threatened because then we’ll usher in people who say, well, just like they’ve had so far, “we’ve had an event”. And this is not the democrats alone. Democrats, Republicans … they said, “Oh, so what we should do is spend more money, stimulate the economy, borrow more money”. And still there won’t be enough, so what do they do? They go to the Fed and they tell the Fed, “Print more money”. Believe me, it won’t last. It’s going to end. You can’t double the money supply and not expect some really big events with inflation.

But back gain to Woodrow Wilson. He was not an individual who respected civil liberties. And the conservative Republicans at the time fought him on the Espionage and Sedition Act. The Republicans didn’t like him. He arrested thousands of people because they showed dissent against the war. Yes, how do you want it? You want it that way? Yes, you may have a position on the war. Others may have another position. But we all ought to be together, that you have a right of dissent and you should never be put in prison for dissenting.

A famous person was arrested back then. I wouldn’t have agreed with his political beliefs. But he was a famous person and he did speak out against the war; which he had a right to do. It was Eugene Debs. And he was put in prison because he spoke out and Woodrow Wilson didn’t like him and because the Congress passed these laws which the Republicans objected to. But he was put in prison indefinitely and I guess because of Woodrow Wilson’s illness and all towards the end, he never got a pardon. You know who gave him the pardon? Warren G. Hardy, a Republican.

There is nothing wrong with describing conservatism as protecting the Constitution, protecting all things that limit government. Government is the enemy of liberty. Government should be very restrained. And as I have said so many times, it’s time that we do study and understand from a conservative viewpoint on how much we should be engaged around the world. And we have good backing from good Republicans of the past. But now that is the past. I don’t live in the past because I see freedom as a very progressive modern movement. But in the past, since Woodrow Wilson’s time, we as conservatives, too many have taken on this saying that we are responsible, but that is a neoconservative viewpoint, and not true conservatism.

Who do you think it was that tried to keep us out of the wars? The Republicans did. One of the greatest republicans, and he’s called Mr. Republican, there’s a statue over in Washington of him, and that is Robert Taft. He worked hard to keep us out of war. He also thought that it was a violation of our rights to have a military draft. He strongly opposed the draft. He was strongly opposed to NATO and didn’t like the United Nations, and here we have casually accepted all this. But who was it that coined the word “The military-industrial complex, and beware of it”? It was Eisenhower that told us about that.

So there is every reason for us to think seriously about, you know, what we really believe in and what conservatism actually really means. You know, in 1956 I was in college but I thought a draft was coming because the French and the British got into a fight over the Suez canal with the Egyptians. The Egyptians wanted to run the canal. So I was worried because I thought I would be drafted. I wasn’t drafted for 10 years after that, but I thought I would be drafted because they came to Eisenhower and said, “Come help us, take care of us. We’re taking this canal.” And Eisenhower said, “I’ll have no part of it.”

But back a hundred years ago, especially around Woodrow Wilson, what happened in this country is we took freedom and we chopped it into pieces. We don’t think of freedom as something unified. There is only one kind of freedom, and that’s individual liberty. Our lives come from our creator and our liberty comes from our creator. It has not nothing to do with government granting it. If you want small government to protect liberty, that is well and good and that’s what the founders believed. And that is exactly what the Constitution was written for. But if we have some group over here defending, “Oh, economic liberty is good.” That’s right, we do. Accept a Republican president said, “We’re all Keynesians now”. We’ve been living with the Keynesian philosophy and economics are still all over the hill. And how many people on the hill are saying, “End the Fed”?

But personal liberty, if our liberties come to us as individuals, they are not collective, freedom does not come in groups. You don’t have freedom because you’re a hyphenated American. You have freedom because you’re an individual, and that should be protected.

But I do not believe freedom can survive and I do not believe we as conservatives can contribute much if we still think freedom only comes in pieces: that you can protect economic liberty but not personal liberty. Sure, I imagine everybody in this crowd would say, “Yes, protect our right of free speech. Protect our right to our religious values.” But as soon as it comes to putting something in your mouth or in your lungs, you say, “You don’t have enough sense to decide what you should do, so we are going to use the heavy hand of government, come down and protect you against yourself”.

But we have gone a long way from the dictates of the Constitution. The Constitution, of course, says that only under declaration can we go to war. But we’re in perpetual war now, in every country in the world and it’s going to last a long time until we go bankrupt. That is what I believe is happening. But we have done a few other things that aren’t conservative, as far as I’m concerned, endorsed by both political parties. And one is that we have now endorsed the principle of preventive war. Another term for preventive war is aggressive war; starting wars because someday somebody might do something to us. That is not part of the American tradition.

Just last week there was a hearing on the Hill. The subject of assassinations came up, and the administration was there and they explained that yes, they indeed do endorse the idea of assassination. And then they were asked, “Would you endorse the idea that we have the obligation to assassinate American citizens?” and the answer is yes, they do. They claim that they have a right to assassinate American citizens. Now what are the conditions? Somebody in the administration – we don’t know exactly who – makes the determination, that that individual is a threat. And if he is a threat, then he can be assassinated. Now you say, “Well, he is probably a bad guy” and he probably is… the people they pick. They only have three. But the principle is important. Some day there might be 6 or 8 or 10. What if that would have been the fact that Eugene Debs might not have been put in prison, he might have been assassinated because he was a threat.

So this is not just casual talk. This is not radical left-wing liberalism protecting civil liberties. This is protecting the whole integrity of our country and our Constitution and the rights of the individual. We now, as a country, have accepted the principle that Habeas Corpus is only worthwhile in a limited fashion; some people don’t deserve it. If they’re designed as a threat, they can be held for an unlimited time in secret detention, and still susceptible to torture. That is not what we’re all about. We’re much better than that. And we as conservatives have to realize that we have to bring this back together again. Good conservatives can believe that personal liberty is of the utmost value.

We all probably more easily agree the free market is a good way to go, and yet we still have a lot of people who reject the notion of regulations and benefits and bailouts for Wall Street and the Federal Reserve System and paper money. All these things have to be worked in. But there is nothing wrong with you being a conservative and saying the Republican conservative tradition, not too long ago, as recent as the year 2000 we won elections by saying we shouldn’t be the policeman of the world and that we shouldn’t be nation building, and it’s time we got those values back into this country.

I believe we’re on the verge of something very significant. I’ve spoken out quite a few times on college campuses in the last couple of years. And the reception is fantastic, and they want the whole package. They don’t want bits and pieces. They want their personal liberty, they want their economic liberty, and they don’t want dependency on the government because the government has failed and they know they’re not going to get their Social Security and they don’t want perpetual war. They’ll defend this country. I had more support from the military than any other one candidate during the campaign.

So let us take this opportunity. Let us take this opportunity, and for those of you who disagree, all I ask you to do is think seriously about it. Think about it and read about it and study it and put it in context and say, “Maybe that has a point”. You know, during the presidential campaign often they laughed at him all this stuff. Then all of a sudden, the crash that I was predicting and talking about and said we were on the verge of and we were beginning, it came. And then all of a sudden now Fox News Network had me on about 60 times since the campaign was over.

But let me finish by saying one reason why I really like this idea of bringing people together and why freedom works. Because I really think it brings people together. I do like different people coming together because freedom doesn’t challenge people’s personal values, they don’t challenge their religious values. They only say come together on your terms as long as you don’t mess around with me.

There are two rules that I have. One is that I want change and I want a lot of changes, but I preach nonviolent change. I want resistance to the current system. But the other thing that I have to keep reminding myself and I’ll remind others, that in the process of us pursuing our goals, that we should remain tolerant. People who disagree with you or look different or have different view, we have to allow freedom of expression. That will bring us together. Otherwise we can’t win.

So I thank you very much for this opportunity to visit with you. I hope it is challenging because we’re in challenging times. But, quite frankly, if we do the right things, we can pull out of the economic mess we have, and we can be better than ever. And I believe that’s what this type of organization and group of people coming together, because I know you want what is best for America. If we work together and are a bit more tolerant, I believe we can achieve it.

Thank you very much.

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Date: Jan/Feb 2010
Location: unknown

Transcript:

Ron Paul: The post 9/11 atmosphere that really worries me. It worries me about how much our CIA is involved overseas. And this week I could not believe a headline that said the president was considering the legality of assassinating an American citizen. No, it’s true. It’s true. He was born in this country, and he’s a Muslim and he’s identified to be with people who don’t like us. So they want to declare him an ‘enemy combatant’ which they can do like the attorney general of the president says, “Oh, he’s an enemy combatant, and therefore he has no rights. But he’s a terrorist.” Well, no. He is maybe a suspect, and nothing has been proven. He might be a bad guy, but is that the way you take care of bad guys? Talking in the White House about assassinating this guy?

I mean, what happens if conditions get really bad and we start talking to each other about some of the terrible things that Washington DC is doing to us. Are we going to be ‘enemy combatants’ because the precedent has been set already for American citizens to be imprisoned indefinitely?

This is why we should protect the civil liberties of all suspect and we shouldn’t be putting people in prison in secret rendition and without a trial, without due process, without an attorney. And then on top of that, add on torture. That, to me, is not what America is all about.

So these fears that I have and that you may have are connected to the economic system. Because if the economic system breaks down, then there are going to be more challenges. Most Americans, endorse the idea that after 9/11, “Oh, we’re under attack. What do you want us to do?” and just so many times I would hear even if going through the lines at the airport, “Well, if this is what it takes, you know, we have to give up some of our freedoms to be free.”

And, you know, it was said a while ago, which I strongly endorse, that you don’t have to give up your liberties to be free. Matter of fact, if you give them up, you can’t be free. And yet a lot of people believe that and if we have trouble in this country, the same thing is going to happen. Yes, there will be a lot of poverty and a lot of problems and law-and-order breakdown. They’ll say, “Well, do whatever you can to make us safe and secure”. Governments can’t make you safe and secure. You think you’re safe in your house because there’s a policeman guarding your house? You’re probably more safe in your house because of the second amendment than you are because of a policeman.

But because of the threat and the undermining of our civil liberties and the possibility of losing the right of Habeas Corpus and the potential of our system breaking down, this is why the monetary system so important.

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Location: House Floor
Date: 1/27/2010

Transcript:

Ron Paul: I thank you, Madam Speaker. Today we pass the supplemental bill and I’m deeply disappointed about that. I was disappointed also that I wasn’t able to get any time to enter into the debate because the time was rather limited and it was a closed rule. But I did want to make a couple of comments and the concerns that I’ve had about this supplemental.

You know, when the president sent the supplemental over, it was 84.9 billion dollars, and there were some of us that were hoping that we wouldn’t be funding the wars through supplemental, but it looks like that hasn’t changed; that process would continue even though there were some that believe there would be a change in the way we funded these wars.

When that bill came to the House, there was a lot of expression of concern about spending too much money, but by the time it got to the floor, it was 96.7 billion dollars. And things were added, for instance 2 billion dollars for the flu epidemic that didn’t occur. But they still went and spent 2 billion dollars trying to figure out whether or not we’re ever going to have an epidemic.

But it was very disappointing that even though it was a closed rule, the minority had one chance to do something about it and maybe reduce some of the spending. But lo and behold, when that amendment was offered, it was offered to increase the spending by 2.9 billion dollars. But there was a lot of expression of the outcry about this spending and the deficits we have, and the deficits exploding and the Social Security, medicare, medicade are underfunded. We were in the midst of a crisis that doesn’t seem to bother anybody about spending.

But the truth is, the treasury is bare. The treasury is empty and yet we continue to spend all this money. So where do they think they’re going to get this money? Well, we can’t tax the people anymore; the people are broke. And yet still we resort to more borrowing and more printing of money, which will not last forever; it will eventually come to an end and I think that is what we’re witnessing.

But this process bothers me a whole lot that we come to the floor with these supplementals, we rush them through, we talk about this excessive spending, and lo and behold, when we finally vote, we get a total of 60 people who would say, “You know, enough is enough”.

And besides, what are we doing? Where are we spending this money? I thought we were supposed to, with this change in administration, that we would be fighting less wars. But no, the war in Iraq continues, we expand the war in Afghanistan, we spread the war into Pakistan, and we always have on the table the potential danger of Iran.

So when will it ever end? We can’t even define the enemy. Who exactly is the enemy over there? Is it the Al-Qaida, the Taliban, is it the government of Pakistan? If you can’t define the enemy, how do you know when the war is over? If you’re in war, which we are, how can this be anything other than war, when was this war declared?

“Oh, we got this authority 5 or 10 years ago, who knows when”; perpetual war. This is what we’re involved in. perpetual spending. And then we say, “Well, we have to do that to be safe”. That is what is preposterous. It’s the very policy that makes us unsafe. We pursue this policy and the more we do, the less safe we are. It’s a big argument now about whether we’re safer now with the new administration or is it making us less safe?

The truth is, the policies of the last 10, 15, 20 years have made us less safe. And as long as we occupy countries, as long as we kill other people and civilians are being killed, we are going to build enemies. And as long we’re known throughout the world that we torture people, we will incite people to hate us and want to come here to kill us.

So we aren’t more safe. We’re less safe by this foreign policy. And some day we have to wise up, change our ways and not be the policeman of the world, not to pretend that we can be the nation-builder of the world. Square off and make sure we don’t torture because you don’t get worthwhile information from torture; all it does is incite people against us. And the occupations can never be of any benefit to us.

But what about the financial calamity that is coming? I’m afraid this is the way this will end; through another financial crisis much bigger than the one we currently have. Because you can’t create 2 trillion dollars of new money every year and expect this system to continue.

The Soviet system collapsed because they couldn’t afford it, their economic system was a total failure. We did not have to fight the Soviets. Even though they were a nuclear power, they collapsed and disintegrated. And that is what we have to be concerned about, because we cannot continue to finance this system and pursue a policy which endangers us.

So if we care about the American people and we care about our liberties and care about our Constitution, we ought to look seriously at our foreign policy and not continue to pursue these supplemental appropriations where we continue to spend money that we don’t have.

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• Balance the budget by reducing spending
• Change our foreign policy to that of non-intervention
• A full audit and more supervision of the Federal Reserve leading to abolishing the Federal Reserve
• Legalize competition to the Federal Reserve with competing currencies
• Regain respect for civil liberties and privacy while reigning in the CIA
• Wean ourselves off the dependence of wealth transfers by government
• Abolish crony capitalism: no subsidies, no bailouts, no regulatory or tax privileges to protect the powerful elite, especially the military-industrial complex
• Eliminate the income tax, inheritance tax and taxes on savings and dividends.

Transcript

Date: 01/21/2010

As we start the new year 2010, the establishment politicians, economists and Wall Street are trying to convince themselves that we have turned the corner and economic growth has once again begun. The predictions that conditions are getting back to normal come from those who never saw the crisis coming and don’t have the vaguest notion what caused it. Some of them concede that it could be a jobless recovery. That will establish a new definition for a recovery.

Official unemployment is at 10% but even the government knows that if everyone is counted, including those individuals that are too discouraged to even be looking for work, the unemployment rate is 17%. Free-market economists claim the actual unemployment rate is closer to 22%.

There’s reason to believe that the correction has just barely started and has a long way to run. If the financial bubble came from excess credit created by the Federal Reserve, doubling the money supply can hardly be a solution. It wouldn’t make much sense for a doctor taking care of a very sick patient from severe infection to deliberately give the patient another infection. Yet that’s what the PhD doctors are doing to our very sick economy. It can’t work. It will make the economy much sicker. If our leaders don’t wake up soon, the economy will be brought to its knees. Great danger lies ahead.

In foreign policy, it’s always crucial that the motives of those who would do us harm are understood. Denial of the truth and accepting more politically palatable excuses will guarantee that threats to our safety will continue as we pursue a seriously flawed involvement overseas.

It’s the same in economic policy. If there’s denial or ignorance of the real cause of financial bubbles and the inevitable corrections that must follow, the economy cannot be reenergized.

We should have learned the lesson from the Depression of the 1930s that it was a predictable result from the Federal Reserve’s orchestrated excesses of the 1920s. Instead, the new-born Keynesian economists who took charge made certain that the correction would not be a one or two year affair as were the previous corrections in our history. The aggressive intervention by Hoover and Roosevelt, the Republicans and the Democrats, turned a short recession into the Great Depression, which lasted until the end of World War II.

The real tragedy was that the interpretation of the 1930s institutionalized bad economic theories. Unfortunately, and erroneously, the Depression was blamed on the gold standard, free markets and a lack of regulations. Though monetary policy was analyzed, its importance was 100% misinterpreted. The low interest rates and excess credit of the 1920s, driven by Federal Reserve policy, was not considered a factor in producing the stock market bubble and the malinvestment.

Instead, the 1930s analysts and even later analysis by Milton Friedman and the monetarists, along with academic scholars like Bernanke, came to an opposite conclusion: the Fed was at fault, but only because it was too tight, arguing that massive monetary inflation was the only answer to the slumping economy.

And now we are witnessing a grand experiment by the very person who for years claimed special knowledge regarding the Depression. Chairman Bernanke is in the midst of trying to solve the problem of massive monetary inflation and excessively low interest rates instituted by his predecessor, Alan Greenspan, by implementing even more inflation at historic rates.

The sad part is the answer to his very risky experiment with the wealth of our country and the health of our economy will take years to analyze. The conclusions will be just as flawed as they were in the aftermath of the Great Depression by an intellectual and political community that had totally rejected commodity money and the principle of free markets with the current understanding in Washington.

One hope, though, is that free-market thinking and Austrian economic theories will have greater influence in the next decade or two, since their influence is now on a dramatic upswing. But there are a lot of hurdles to overcome.

In the 1930s, in an effort to find the true cause of the crisis, Congress ordered an official investigation. It became known as the Pecora Investigation named after Ferdinand Pecora, the aggressive chief council of the hearings. It received a lot of public attention and brought about many major changes but, tragically, every conclusion made and new policies implemented caused the depression to worsen and legitimized bad economic theories that continue to haunt us to this day.

The Federal Reserve was not blamed except for not printing enough money fast enough. Artificially low interest rates and malinvestment, the main source of the grossly distorted economy and the bubble of the 1920s, were exonerated. Not enough regulations were blamed, thus the Glass-Steagall Act and the Securities Act of 1933 were passed and deepened the depression. Separating commercial and investment banking and the newly created SEC were to have solved all future problems-as long as the Fed was free from any restraint in its money creation, operations which were to serve big-government spenders and members of the banking cartel.

Since the flaws in the monetary and economic system were not corrected but made worse after the Depression, it was to be expected that periodic booms and busts would persist. The longer these cycles could be papered over with new money and credit, the greater would be the distortions and debt that would one day have to undergo a major correction.

[That correction is now in its early stages. Since the dollar was the reserve currency of the world and totally fiat since 1971, without any linkage to gold, the financial bubble became worldwide. This bubble that burst in 2008 was the largest in history. During the formation of the bubble, the U.S. as the issuer of the world currency received undeserved benefits. We essentially became the counterfeiter of the world and no one called us on it. Even today, the trust in the dollar that persists has buffeted the pain of the correction for us. This unique setup was a prime cause for our balance of payment deficits and] the huge foreign debt we owe-the largest in the history of the world.

The discord in the world financial system is telling us that it’s time for us to pay for our profligate spending and massive foreign indebtedness. We have lived, as a nation, far beyond our means and the message is, for the foreseeable future, that we will be forced to live beneath our means as this debt is paid.

The inflation optimists are excited about current signs of economic growth and have even announced the end of the recession. It is conceivable that a reprieve can be achieved and the penalty that our economy must endure delayed. A reprieve must not be confused with a pardon; one is a temporary delay, the other an exemption. The payback for our excesses is certain to come.

Massively increasing debt and monetary inflation can slow the crash and change some government statistics encouraging the optimists. But real job growth and a return of prosperity will remain elusive. The odds of us once again becoming an exporter of manufactured goods, like steel, cars, and textiles, are remote.

Ironically, a reprieve may well restore some confidence and motivate some spending and investment. But instead of restoring long-term growth, it may well act perversely by precipitating price inflation and higher interest rates. Since today’s interest rates are artificially set, much of our investing is unproductively misdirected.

Current enthusiasm in the stock market is once again a reflection of the message that low interest rates send. Thus too, the government’s stimulus package has helped to sustain the bond bubble, which in time must be deflated in order to get back to sound economic growth.

All of this activity poses a threat to the dollar.Governments are very powerful, and when in partnership with the monetary authorities that can inflate the currency at will, big government thrives. Welfare demands and senseless wars can be financed for long periods of time through inflation, as long as trust in the currency lasts.

Trust, though ultimately controlled by facts, can be misleading, since currency values can gain benefit from a country that has a strong military and wealth and a reasonably healthy economy. Eventually, markets and reality overwhelm, and illusions about a currency’s worth become a reality.

Today, reality is setting in and the first of three major events has begun. The worldwide financial system, built on a foundation of paper, has received the shock waves of an impending collapse.

The wild speculation and the derivatives market, the stock market bubble, the insurmountable debt – public and private – and the massive malinvestments have been shattered.

The only solution so far offered worldwide, but led by the United States, has been to “print money” faster, keep interest rates low at practically zero percent, and remove all stops for controlling deficits. These are the very policies that caused the disequilibrium, and doing more of the same, but only faster, can hardly help our economy.

The addiction to easy credit and deficit defies a wise political solution. Politicians are incapable of delivering the message of frugality, common sense, and sound money.

We can expect that the course we are on to continue and accelerate, since the first event, the collapse of the financial system, is still in its early stage.

The housing crisis is far from over; the commercial property crisis has not yet gotten much attention, and the financial obligations of the government are growing exponentially. And none of this forces the slightest pause in the expanding of welfare growth. The number of regulations, which are indeed a tax, are exploding though the market was already suffering from regulatory excesses. There’s a consensus in Washington that “wise” regulations can compensate for all the mistakes made by the Federal Reserve, the Executive Branch, and the Congress. This fallacy has been around a long time and will be difficult to overcome.

The pessimism of the middle class continues to get worse despite the prognostications of Wall Street and the Administration. Most Americans know that the standard of living and real wages have not gone up for the past 10 years. If you’re not a shrewd stock trader and instead invested in stocks 10 years ago and held on, in real terms you have lost 20% of your savings.

The middle class is poorer also because house prices have crashed and many have lost their homes. On top of this, all we hear about is the trillions of dollars of debt and entitlement obligations that have been racked up for future taxpayers to pay.

When it is revealed that the insider friends of the Fed and Congress get billions of dollars in bailout at the expense of the middle class, it’s no wonder the people are taking to the streets and directing their hostilities toward both Republicans and Democrats in Washington. Many would agree it’s well-earned anger and properly directed.

This anger and frustration will certainly grow as the consequences of the collapse of the financial system become more severe. The concerted effort to prevent the correction the market demands, guarantees a prolonged agonizing crisis. Every effort to reverse the tide will depend on spending, higher deficits, increased taxes and money creation. This effort is now providing another grand bubble: the dollar/bond bubble.

The next event will be a dollar crisis. A full-blown dollar crisis will be much worse than our current financial crisis. The extent of a dollar crisis depends on whether or not the Washington politicians wake up and change their ways – a dubious hope.

More likely, the insanity will continue until some not yet known event will undermine the confidence in the dollar worldwide. Signs of less desire by foreigners to hold our dollars are already present. I’m certain our Treasury and Federal Reserve are pulling out all stops to prevent a massive run on the dollar.

At present the orderly retreat from the dollar is working. But it won’t last.

China is quite active in investing in natural resources around the world, and including in Iran. While we live in the dark ages and believe only our military presence and military threats can protect our access to oil, China is actually spending some of their savings investing in their future access to energy and other precious metals and minerals.

But the orderly retreat from the dollar won’t last forever. Since 1973, shortly after the breakdown of the Bretton Woods Agreement, the dollar has lost 32% of its value against a Federal Reserve basket of currencies. But that doesn’t tell the real story, since that is a measurement against all other currencies, and they are fiat currencies as well. This gave the dollar an artificial benefit from its position of power in great wealth and military prowess. The dollar in relationship to gold, however, is down 97% since 1971, and 82% as measured by the CPI. The dollar, mismanaged by the Fed, has not been a benefit to the savers who sought to responsibly take care of themselves. They’ve been cheated by a rotten system and are just beginning to understand exactly how the Federal Reserve has been responsible for the swindle.

It’s impossible to predict the time when confidence will be lost, but it can come quickly. Resorting to buying other paper currencies will not be of much help. When the dollar crashes, most likely the purchasing power of all currencies – since all countries hold dollars as a reserve – will go down as well.

This means that dollars and other currencies will go into buying consumer items, precious metals and other physical properties. Consumer prices will soar, as well as interest rates. The central bank will lose control; and the more they inflate, the worse the confidence becomes. The interest rates will respond to these efforts by rising sharply.

If the Fed tries to reverse the run on the dollar, interest rates will also soar, and the pain on the American citizens will be of such proportion that political chaos will result. Either scenario leads to political and social chaos – the third event, and the most dangerous.

With no ability of the federal government to fund its commitments, international or domestic, major changes will occur in our system. The social unrest will elicit cries for government to exert unusual force to head off a complete breakdown of law and order. The ultimate trap will be set for a system of government claiming to protect a free society.

If more power and police authority are not given to the federal government, it will be argued that only anarchy will result. If more government policing power is given, it will mean a lethal threat to civil liberties. Already we have permitted the notion that a single person, the Attorney General or the President, can decide who is an “enemy combatant”, thus denying that individual the right to habeas corpus, permitting indefinite detentions without charges made. This attitude toward civil liberties has changed significantly since the fear built around 9/11.

Yes, I know, declaring one an “enemy combatant” is reserved only for the radical Muslims engaged in terrorism against the United States. To be reassured by this reasoning is quite dangerous and naïve. Logic should not lead us to equate suspects with terrorists, and include American citizens, and yet this has already been set by precedent. Under difficult circumstances, our political leaders will not be hesitant to use these powers to maintain order. Tragically, the people may even demand it.

We are rapidly moving toward a dangerous time in our history. Society as we know it is vulnerable to political and social unrest.

This impending crisis comes as a consequence of our flawed foreign and domestic economic policies, a silly notion about money, ignorance about Central Banking, and ignoring the onerous power and mischief of out-of-control intelligence agencies, our unsustainable welfare state, and a willingness to sacrifice privacy and civil liberties in an attempt to achieve safety and security from an inept government. Dangerous times indeed!

What can be done about it? Must we wait for the inevitable and expect to restore our liberties in a street fight against the overwhelming power of the state? Not a good option!

The only way that we can prevent blood from running in the streets is to offer a better idea of the proper role of government in a society that desires first and foremost liberty.

And that is impossible without a firm commitment by our thought leaders to the ideas of freedom, the source of all creative energy and prosperity. An all-powerful state is the threat to that ideal.

The prevailing attitude of the people, as it once was in early America, must be that of liberty and self reliance, rather than the nanny state and dependency, relying on government force to mold all private choices.

If this is understood, a smooth, although not painless, transition to a free society is achievable. Ignoring this option will be very destructive to everything that is dear to the hearts of most Americans.

What is it that we must do? We must immediately embark on:

• Balance the budget by reducing spending
• Change our foreign policy to that of non-intervention
• A full audit and more supervision of the Federal Reserve leading to abolishing the Federal Reserve
• Legalize competition to the Federal Reserve with competing currencies
• Regain respect for civil liberties and privacy while reigning in the CIA
• Wean ourselves off the dependence of wealth transfers by government
• Abolish crony capitalism: no subsidies, no bailouts, no regulatory or tax privileges to protect the powerful elite, especially the military-industrial complex
• Eliminate the income tax, inheritance tax and taxes on savings and dividends.

None of this can happen without the restoration of Congress to its dominant position of the three branches of government as was originally intended by the Constitution. The Executive and Judicial must be reined in, and Congress must assert its prerogatives over all legislation curtailing all unconstitutional agendae through budgetary controls.

Signs abound that angry Americans are now more ready than ever before for a change in direction that is indeed real. If this program were improvised, even suddenly and dramatically, the adjustment, though significant and to a degree somewhat painful, would be much shorter and of minor consequence compared to the chaos and poverty that will result if we refuse to change our gluttonous appetite for a free lunch.

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I rise in reluctant opposition to this resolution. Certainly I am moved by the horrific destruction in Haiti and would without hesitation express condolences to those who have suffered and continue to suffer. As a medical doctor, I have through my career worked to alleviate the pain and suffering of others.

Unfortunately, however, this resolution does not simply express our condolences, but rather it commits the US government “to begin the reconstruction of Haiti” and affirms that “the recovery and long-term needs of Haiti will require a sustained commitment by the United States….” I do not believe that a resolution expressing our deep regret and sorrow over this tragedy should be used to commit the United States to a “long-term” occupation of Haiti during which time the US government will provide for the reconstruction of that country.

I am concerned over the possibility of an open-ended US military occupation of Haiti and this legislation does nothing to alleviate my concerns. On the contrary, when this resolution refers to the need for a long term US plan for Haiti, I see a return to the failed attempts by the Clinton and Bush Administrations to establish Haiti as an American protectorate. Already we are seeing many argue that this kind of humanitarian mission is a perfect fit for the US military. I do not agree.

Certainly I would support and encourage the efforts of the American people to help the people of Haiti at this tragic time. I believe that the American people are very generous on their own and fear that a US government commitment to reconstruct Haiti may actually discourage private contributions. Mr. Speaker, already we see private US citizens and corporations raising millions of dollars for relief and reconstruction of Haiti. I do not believe the US government should get in the way of these laudable efforts. I do express my condolences but I unfortunately must urge my colleagues to vote against this resolution committing the United States government to rebuild Haiti.

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