by Ron Paul

While much has been made recently of the President’s unconstitutional appointment of Richard Cordray to be director of the Consumer Financial Protection Bureau (CFPB), lost in the hubbub has been any discussion of the unconstitutionality of, or the need for, the CFPB itself. Proponents of the CFPB claim that this new bureaucracy will help consumers by protecting them from fraudulent activity. In reality, it will only expose consumers to more financial harm.

Housed within the unconstitutional Federal Reserve, and funded not through Congressional appropriations but through the Federal Reserve’s interest revenue off the trillions of dollars of US government debt it holds, the structure of the CFPB ensures that it is run by unelected, unaccountable bureaucrats, with no effective oversight from Congress. Given broad power to regulate the activities not only of banks, but also of any other entity which the government deems offers a financial product, there is almost no limit to the scope of financial activities which the CFPB can oversee.

Giving impetus to the CFPB’s creation was the poor reputation of Wall Street banks and financial firms that developed as a result of the financial crisis. Banks which received trillions of dollars of taxpayer-funded bailouts turned around and shafted their customers by foreclosing on homes, raising credit card interest rates, and introducing numerous new fees.

But rather than keeping Wall Street in check as its proponents allege, the CFPB will end up placing further restrictions on the ability of Main Street Americans to engage in productive financial endeavors. Current law already allows only the richest Americans to invest in potentially lucrative ventures such as hedge funds because such investments are deemed to be “too risky” for the average American to invest in. The government in its paternalistic wisdom treats American investors as too stupid to know what to do with their own money, and “protects” them, supposedly, by keeping them poorer than they otherwise would be. We can expect even more of this once the CFPB is running in full stride.

The CFPB will further harm consumers by encouraging them to use only financial products which have received the Bureau’s approval. Many consumers will assume that these products are “safe”, and will fail to engage in their own due diligence, with predictably unfortunate results. We have seen this with the stock markets and the cases of Bernie Madoff and Allen Stanford, where investors trusting the SEC to prevent fraud ended up suffering huge losses. Social Security is a similar case, in which millions of people placed their trust in the government to take care of them in their old age. The inability of Social Security to pay its future obligations is well understood but ignored, and millions of Americans will likely once again learn the hard way that the government cannot be taken at its word.

by Ron Paul

The Federal Reserve’s interest rate price-setting board, the FOMC, met last week. They will continue to set the federal funds rate at well below 1%, and plan to keep it low until the end of 2014. That’s a year and half longer than they planned when they met just last month. Chairman Bernanke says they are keeping interest rates so low for so long because the economic outlook warrants it.

The fallacies in their reasoning would be amusing if they weren’t so dangerous. The Fed wants to keep the price of money at essentially zero – in other words “free” – to boost the economy. But the boost they are attempting won’t get here for another three years. That’s not a recovery. And we’ve already tried this tactic. That’s how we got into this mess in the first place: with interest rates artificially low for a very long time. Free money doesn’t stimulate growth, as Japan’s two lost decades clearly show. Artificially low interest rates only serve to punish saving, distort market signals, and cause further malinvestment. They also do nothing to address the only real solution to our economic woes: liquidation of the bad debt that hangs around the neck of the world’s economy, preventing recovery. Artificially low interest rates merely ensure that we remain a debt-financed consumer economy guaranteed to end up with a weaker economy and higher prices.

What baffles me even more is that two decades after the collapse of Soviet planning and decades more since the U.S. and economists purportedly rejected the idea of price setting, we find nothing wrong with the Fed setting the price of money. We all agree it is a bad idea to have a board saying the price of wheat should be $250 a ton today, or carpenters wages should be $25 an hour until the end of 2014. But we are perfectly comfortable with having a board set the price of one half of every transaction in our economy. And our markets are supposedly free.

The Fed policies of low interest rates, Operation Twist, and rounds of quantitative easing are all attempts to keep the economy alive artificially. But the 12 FOMC participants cannot manage the economy any better than the bureaucrats of the Soviet Union. The policies haven’t worked. They won’t work. Real economic recovery cannot come until we liquidate the bad debt, until we eradicate the poor decisions we made over the last decade, and start with a sound foundation. It is time we acknowledge the truth of the Fed’s activities: they are merely using fancy words for price setting.

Treasury Secretary Andrew Mellon was correct in the 1920s when he said “liquidate everything.” That’s what we did in the severe depression of 1920-21, and we recovered so quickly it is never even talked about. We didn’t take his advice after the 1929 crash, and ended up with the Great Depression. We are committing the same mistakes, destined to live in this Great Recession for a decade or more—it has already been four years, the Fed says it will be at least three more! It’s time we start rethinking what the Fed’s policies are really doing to our economy, because obviously, by their own admission, they haven’t helped.

Tonight, President Obama once again showed that he does not represent the fundamental change this country needs. Instead of offering solutions to the problems our country faces, the President was intent on delivering a campaign speech, further dealing in the typical Washington political gamesmanship that has gotten us exactly nowhere close to improving the lives of the American people.

In a speech where much of the rhetoric was devoted to job creation, it was strange that President Obama would brag about his job-destroying national health care plan, Obamacare, and the Dodd-Frank bill, which, contrary to the President’s claims, guarantees future taxpayer bailouts of large institutions. Unfortunately, President Obama’s ‘job creation’ policies amount to little more than continuing to allow government bureaucrats to pick winners and losers, which is a recipe for continued economic stagnation.

President Obama claims to want an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. Yet he remains committed to the same old system of debt, deficits, bailouts, and cronyism that created our economic problems. The President speaks of giving us energy independence from unstable nations, yet he refuses to allow the type of development needed to achieve this goal, while at the same time his administration hands out favors to the politically connected – those given to the likes of Solyndra, who fail to produce jobs or energy but succeed in ripping off the taxpayers.

Of course, President Obama refuses to even mention the role the Federal Reserve plays in creating an economic system where some are denied a fair shot or even to support my efforts at bringing transparency to the Federal Reserve. Also not mentioned by President Obama is the very crucial need for reining in spending and balancing the federal budget. What is called by some ‘the greatest threat to our national security’ seems not to be of great importance to this President, although I, like many Americans, believe it to be cause for immediate measures, like the $1 trillion in spending cuts that would take place in my first year as President under my Plan to Restore America.

In the area of foreign policy and civil liberties, President Obama’s rhetoric may be different, but the substance of his polices – as shown by his administration’s defense of the TSA’s treatment of my son, Senator Rand Paul, is hardly ‘change we can believe in.’ No wonder more and more Americans, especially young people, are rejecting the phony alternatives of Obama and establishment Republicans and embracing my campaign to Restore America Now.

by Ron Paul

Although Congress was back in session for scarcely more than a day last week, private citizens across the country managed to cause an uproar felt across Capitol Hill. The uproar took the form of hundreds of thousands of phone calls to both Senators and Representatives, urging them to oppose two draconian new bills that threaten the free and unbridled flow of information on the internet.

On Wednesday last week, dozens of prominent websites like Wikipedia, Reddit, and Craigslist, were blacked out in protest of two bills known in DC jargon as SOPA and PIPA. SOPA is the House bill; PIPA is its Senate companion. These bills ostensibly will combat internet piracy, and of course we also are told they will help us wage the never ending “war on terror.”

What these bills actually do is force website owners to police the internet; create entry barriers to the only relatively free and open medium of communication; and threaten to break the technological structure of the internet itself. They also violate our 1st Amendment right to freedom of speech and our 4th Amendment freedom from unreasonable searches and seizures.

SOPA and PIPA have been drafted not only without respect for the Constitution, but also without an understanding of the how the internet works. These bills attack the very system upon which the entire orderly organization of the web depends. Search engines, internet service providers, advertising sites, and sites with user-generated content such as Facebook, YouTube, and Twitter–all magnificent creations of the market– are directly threatened by these bills. They will be held responsible if even a single of their millions of users posts even one link to a website that a copyright holder claims is violating a copyright.

Note that under the bills as written, the Department of Justice or a copyright holder do not have to prove that their copyright was violated– they simply have to claim copyright infringement and an entire site is shut down. The burden of these regulations on the internet will be enormous, shifting resources away from productivity and innovation and into monitoring and censoring. It turns internet companies into involuntary tools for Big Brother government, further eroding our Constitutional rights.

As is typical of so many bills in Congress, SOPA and PIPA were not crafted to make life better for the American people, but rather were written at the behest of big business trying to enlist the federal government as its strong-arm. For example, the Motion Picture Association of America spent more than $1.2 million so far lobbying for their passage.

But the internet community is fighting back effectively, not just with websites that went black but with millions of users who expressed their solidarity. Congressional sponsors of both bills have been jumping ship in response to the outrage. The House Judiciary Committee canceled the SOPA hearing they were planning to hold last Wednesday; the House leadership announced they have no intention of considering this bill; and at the end of the week Senator Reid announced he was postponing the vote until a “compromise” could be reached. The American people are speaking, and with their continued grassroots efforts the marketplace for free ideas and communication will prevail over government controls and censorship.

by Ron Paul

Last week the Supreme Court heard arguments in Sackett v. EPA, a case of blatant federal agency overreach and abuse of private property rights. Without any proof or reason, and no chance for appeal, the Environmental Protection Agency determined that a small single home lot was a “protected wetland.” The owners, Mike and Chantell Sackett, were ordered to halt construction already underway, to remove all of the work already done, and plant trees and shrubs consistent with a wetlands environment. After making these costly changes, the Sackets then would have to wait several years for the EPA to decide if they would be allowed the use of their own property. Refusal to comply with these outrageous and arbitrary commandments would result in daily fines greater than the value of the property!

Outraged, the Sacketts sought relief through the courts, but court after court determined that they had no standing. The actions of the EPA were not subject to judicial review until a mountain of fees had already been assessed. This is just another example not only of how federal agencies wield enormous power over average citizens, but also how little practical protection our court system provides when such citizens are harmed by those agencies.

Constitutionally, when the government determines private property is needed for public use, it is taken through eminent domain. In that process the owner is due fair market value in compensation for any condemned property. The EPA not only refuses to compensate the Sacketts for effectively taking their land, they are assessing– or threatening to assess– ruinous penalties that greatly exceed the value of the land. They arrogantly claim the power to determine how certain property owners can use their land, while assessing fines or ordering actions that must be undertaken at the property owner’s expense. All of this is done at the administrative level, with no judicial oversight. In short, the EPA does not believe the Constitution applies to them.

A decision on this case is expected this summer. My fervent hope is that the Supreme Court will thwart this rogue agency and stand up for property rights and the right of people to have their day in court when they find themselves unwittingly accosted by the EPA.

My own district in Texas is no stranger to these issues. Again, with no evidence to support their decision, the EPA arbitrarily determined Matagorda County to be an “Ozone Nonattainment Region”, meaning the air quality is substandard. In fact, the population in this county has been decreasing and the small amount of emissions reported from Matagorda County has actually declined in recent years. The Texas agency charged with environmental protection disagrees with the EPA. Yet Matagorda County, like the Sacketts, finds itself at the mercy of the EPA. New business and construction will be stymied until the Washington masters are satisfied.

Unless Congress acts, EPA bureaucrats will continue to inflict potentially devastating economic consequences on communities like Matagorda County and people like the Sacketts. Destroying the economy is no way to save the environment. A thriving economy and a fair judicial system that respects property rights and the Constitution provide the best protection of the environment.

by Ron Paul

This week, partisan games in Washington reached a fevered pitch as Congress acted to prevent recess appointments, yet the administration made them anyway. Congress has been gaveling into session for less than a minute every three days for the express purpose of technically staying in session. The 40 second “pro forma” sessions may strike supporters of the President as obstructionist, but Congress was using its clear constitutional authority and playing by the rules. Frustrated, the President simply disregarded the Constitution, and appointed Richard Cordray as head of the new Consumer Financial Protection Board, and Sharon Block, Richard Griffin, and Terence Flynn to the National Labor Relations Board anyway.

Playing fast and loose with the Constitution only gets worse with every administration. Because of the dangerous precedents being set, both parties would be wise to defend constitutional bounds, no matter who crosses the line. Defending a constitutional overstep always comes back to haunt them once power changes hands.

The Obama administration expressed extreme frustration with the Senate’s refusal to confirm its nominees. The truth is, for better or worse, these are the cards the voters have dealt Washington. The Constitution, with its system of checks and balances, not only allows for gridlock, it practically guarantees some degree of it. The Founders knew that gridlock can be a very good thing. If nothing can be agreed upon in Washington, harm to the country is limited. Considering the Obama administration’s ideas of what caused our problems, and how to solve them, the wisdom of the founders certainly shines through today.

According to the administration, the new Consumer Financial Protection Board is an absolute necessity. Another bureaucracy, with more rules and red tape and paperwork and procedures is supposed to protect the people from bad actors in the marketplace. On the contrary, the answer was staring us in the face in late 2008 when these bad banks and corporations threatened to go belly-up. The laws of economics were working to remove corrupt companies from the market forever, to never abuse or defraud another customer or depositor or shareholder again. Bankruptcy is the ultimate consumer protection, and what did Washington do? It protected the banks instead, and created more bureaucrats.

This is exactly why constitutionally-inflicted gridlock should be respected. But instead it is clearer than ever that we are now a nation ruled by men, not laws. This nation needs to respect the Constitution again. No exceptions. The oath of office to protect and defend the Constitution is still in effect when checks and balances get in the way of a political agenda. If not, it has no meaning at all.

by Ron Paul

Last week, as most Americans were celebrating the holidays with family and friends, the Obama Administration announced plans to seek yet another debt ceiling increase in the New Year. While some fiscal conservatives will try to block this increase, their efforts are designed to fail thanks to the procedure set up by the last debt ceiling negotiations. Congress would have to pass a joint resolution opposing the increase, which the president could simply veto. Thus, an additional $1.2 trillion on top of our already unsustainable debt is a foregone conclusion. Our Gross Domestic Product continues to contract and now stands at $14.5 trillion. The debt already far exceeds that and will soon hit the new ceiling of $16.39 trillion.

Everyone in DC acknowledges that the debt is unsustainable, yet few are willing to take serious steps toward addressing it. Politicians in Washington cannot face the fact that the blank checks must stop. Many think we can ignore the mounting debts and deficits and eventually the economy will magically turn around and grow its way out of the mess. If you really understand why the economy is foundering, you understand the burden cannot all be put on the backs of the American people while politicians stick their heads in the sand.

According to a USA Today analysis, there are currently over $61.6 trillion in unfunded future government liabilities, which amounts to $528,000 per American household. A huge part of these liabilities are Medicare, Medicaid and Social Security – promises made to make the American people feel secure in their futures. But how secure should the American people feel knowing that a default is becoming more mathematically unavoidable with every NEW program added, every bailout, every debt ceiling increase, every new war we rush into, and every round of quantitative easing from the Federal Reserve? The last thing politicians should be doing is adding to that $528,000 household burden, with either more spending or more taxes. This is unequivocally a problem of too much spending by a government far outside its Constitutional bounds.

It is especially a slap in the face to the American family when the Federal Reserve dilutes the dollars we work for in order to bail out profligate banks and governments in Europe. The already perilous state of our economy and our currency should not be further endangered in a futile attempt to save the Euro. The least the government can do is allow Americans a choice in how to actually secure their financial futures that doesn’t depend on a sinking dollar and irresponsible government. My competing currency bill allows for that and I will continue to fight for economic freedom from foolish and selfish whims of the central bank.

It is nothing new for Washington to kick economic pain down the road. Optimistic politicians hope things will stay cobbled together just long enough to get through another election cycle, or that another administration will have to deal with the mess. The longer this cowardly attitude prevails, the bigger the problems become. Congress and the administration should exercise some good judgment, some political courage, and make the needed budgetary changes now. It would not be that difficult to do if Washington would simply work its way back to the Constitution instead of straying even further from it.

by Ron Paul

Little by little, in the name of fighting terrorism, our Bill of Rights is being repealed. The 4th amendment has been rendered toothless by the PATRIOT Act. No more can we truly feel secure in our persons, houses, papers, and effects when now there is an exception that fits nearly any excuse for our government to search and seize our property. Of course, the vast majority of Americans may say “I’m not a terrorist, so I have no reason to worry.” However, innocent people are wrongly accused all the time. The Bill of Rights is there precisely because the founders wanted to set a very high bar for the government to overcome in order to deprive an individual of life or liberty. To lower that bar is to endanger everyone. When the bar is low enough to include political enemies, our descent into totalitarianism is virtually assured.

The PATRIOT Act, as bad is its violation of the 4th Amendment, was just one step down the slippery slope. The recently passed National Defense Authorization Act (NDAA) continues that slip toward tyranny and in fact accelerates it significantly. The main section of concern, Section 1021 of the NDAA Conference Report, does to the 5th Amendment what the PATRIOT Act does to the 4th. The 5th Amendment is about much more than the right to remain silent in the face of government questioning. It contains very basic and very critical stipulations about due process of law. The government cannot imprison a person for no reason and with no evidence presented or access to legal counsel.

The dangers in the NDAA are its alarmingly vague, undefined criteria for who can be indefinitely detained by the US government without trial. It is now no longer limited to members of al Qaeda or the Taliban, but anyone accused of “substantially supporting” such groups or “associated forces.” How closely associated? And what constitutes “substantial” support? What if it was discovered that someone who committed a terrorist act was once involved with a charity? Or supported a political candidate? Are all donors of that charity or supporters of that candidate now suspect, and subject to indefinite detainment? Is that charity now an associated force?

Additionally, this legislation codifies in law for the first time authority to detain Americans that has to this point only been claimed by President Obama. According to subsection (e) of section 1021, “[n]othing in this section shall be construed to affect existing law or authorities relating to the detention of United States citizens, lawful resident aliens of the United States, or any other persons who are captured or arrested in the United States.” This means the president’s widely expanded view of his own authority to detain Americans indefinitely even on American soil is for the first time in this legislation codified in law. That should chill all of us to our cores.

The Bill of Rights has no exemptions for “really bad people” or terrorists or even non-citizens. It is a key check on government power against any person. That is not a weakness in our legal system; it is the very strength of our legal system. The NDAA attempts to justify abridging the bill of rights on the theory that rights are suspended in a time of war, and the entire Unites States is a battlefield in the War on Terror. This is a very dangerous development indeed. Beware.

by Ron Paul

The economic establishment in this country has come to the conclusion that it is not a matter of “if” the United States must intervene in the bailout of the euro, but simply a question of “when” and “how”. Newspaper articles and editorials are full of assertions that the breakup of the euro would result in a worldwide depression, and that economic assistance to Europe is the only way to stave off this calamity. These assertions are yet again more scare-mongering, just as we witnessed during the depths of the 2008 financial crisis. After just a decade of the euro, people have forgotten that Europe functioned for centuries without a common currency.

The real cause of economic depression is loose monetary policy: the creation of money and credit out of thin air and the monetization of government debt by a central bank. This inflationary monetary policy is the cause of every boom and bust, yet it is precisely what political and economic elites both in Europe and the United States are prescribing as a resolution for the present crisis. The drastic next step being discussed is a multi-trillion dollar bailout of Europe by the European Central Bank, aided by the IMF and the Federal Reserve.

The euro was built on an unstable foundation. Its creators attempted to establish a dollar-like currency for Europe, while forgetting that it took nearly two centuries for the dollar to devolve from a defined unit of silver to a completely unbacked fiat currency note. The euro had no such history and from the outset was a purely fiat system, thus it is not surprising to followers of Austrian economics that it barely survived a decade and is now completely collapsing. Europe’s economic depression is the result of the euro’s very structure, a fiat money system that allowed member governments to spend themselves into oblivion and expect that someone else would pick up the tab.

A bailout of European banks by the European Central Bank and the Federal Reserve will exacerbate the crisis rather than alleviate it. What is needed is for bad debts to be liquidated. Banks that invested in sovereign debt need to take their losses rather than socializing those losses and prolonging the process of adjusting their balance sheets to reflect reality. If this was done, the correction would be painful, but quick, like tearing off a large band-aid, but this is necessary to get back on solid economic footing. Until the correction takes place there can be no recovery. Bailing out profligate European governments will only ensure that no correction will take place.

A multi-trillion dollar European aid package cannot be undertaken by Europe alone, and will require IMF and Federal Reserve involvement. The Federal Reserve already has pumped trillions of dollars into the US economy with nothing to show for it. Just considering Fed involvement in Europe is ludicrous. The US economy is in horrible shape precisely because of too much government debt and too much money creation and the European economy is destined to flounder for the same reasons. We have an unsustainable amount of debt here at home; it is hardly fair to US taxpayers to take on Europe’s debt as well. That will only ensure an accelerated erosion of the dollar and a lower standard of living for all Americans.

by Ron Paul

Maryanne Godboldo, a mother in Michigan, noticed that pills prescribed by her daughter’s doctor were making her condition worse, not better. So Mrs. Godboldo stopped giving them to her. That’s when the trouble began. When Child Protective Services (CPS) bureaucrats became aware that the girl was not receiving her prescribed medication, they decided the child should be taken away from her mother’s custody on grounds of medical neglect. When Ms. Godboldo refused to surrender her daughter to the state, CPS enlisted the help of a police SWAT team! On March 24 of this year a 12 hour standoff ensued and young Ariana was taken into custody. The drug involved was Risperdal, a neuroleptic antipsychotic medication with numerous known side effects. Ms. Godboldo had decided on a more holistic approach for her daughter. She is still engaged in a costly legal battle with the state over Ariana’s treatment and custody.

This is one example of how government’s increasing proclivity to medicate children with questionable psychiatric drugs violates the rights of parents. Just recently, the Government Accountability Office released a report on the astonishingly high rate of prescriptions for psychotropic drugs for children in the foster care system. It is absolutely astounding that nearly 40% of kids in foster care are on psychotropic drugs, some of them taking up to 5 different pills at a time. Some of these children are under one year of age – too young to safely take over the counter cold medication!

To fight this dangerous trend I reintroduced the Parental Consent Act of 2011, HR 2769, which prohibits federal funds from being used to establish or implement any universal or mandatory mental health or psychiatric screening program. The previous administration pushed hard for this type of federal intrusion into the medical decisions of families through its wildly misnamed “New Freedom Commission on Mental Health.” Everyone interested in parental rights and true health freedom must fight to make sure the commission’s findings and dubious psychiatric science are never used as justification to force mental health screening on American kids at school without their parents’ consent.

There has been a persistent lobbying effort, funded by pharmaceutical companies, to increase the number of these prescriptions to even more children. A universal screening program is the stated goal of these lobbyists. I would not be at all surprised to see the recent attention to the issue of schoolyard bullying used as a tool towards these ends.

Imagine the potential ramifications of a universal, mandatory psychiatric health screening program in a public school, considering how some bureaucrats are wont to behave! The diagnostic criteria for many mental illnesses remain vague and subjective. Therefore it is all too easy for a bureaucrat in a white coat to label a child with some sort of psychiatric syndrome simply because they were having a bad day, or behaving as a typical rambunctious child. That label could follow them around the rest of their school career and come with a number of prescriptions attached, which the state, as in the Godboldo case, may try to force the parents to administer, whether they want to or not.

I plan to continue the fight to ban federal funding of any universal screening program that imposes mental healthcare screening on children without express informed consent from parents.