By RonPaul.com on May 1, 2006
by Ron Paul
A recent Hudson Institute study found that, last year, American citizens voluntarily contributed three times more to help people overseas than did the United States government. This should not surprise us at all, as Americans are generous to those in need, whether here or abroad. There are so many moral, religious, and human reasons to help our fellow men and women in need. It is only when government gets in the way and tries to crowd out private charity that problems arise. There are good reasons why the US Constitution does not allow our government to send taxpayer money overseas as foreign aid. One of the best is that coerced “charity” is not charity at all, but rather it is theft.
If someone picks your pocket and donates the money to a good cause it does not negate the original act of theft. There are also practical reasons to oppose governmental foreign aid. Though it may be given with the best intentions, government agencies simply cannot do the kind of job that private charities do in actually helping people in need. Government-to-government assistance seldom helps those really in need. First, because it comes from governments it usually has political strings attached to it, and as such is really a cover for political interventionism. Take our own National Endowment for Democracy for example. The “aid” money it spends is usually spent trying to manipulate elections overseas so that a favored foreign political party wins “democratic” elections. This does no favor to citizens of foreign countries, who vote in the hope that they may choose their own leaders without outside interference.
Likewise with the so-called Millennium Challenge Account, which sends US aid to countries that meet US-determined economic reform criteria. The fact is, countries that enact solid economic policies will attract many times the amount of private foreign investment on international capital markets than they receive through the Millennium Challenge program. Another problem is that when a government gives aid to another government there are so many layers of middlemen involved that by the time the actual aid trickles down to those in need it is a small fraction of the original amount given. Not to mention that much of this aid finds its way into the pockets of corrupt foreign leaders. Private assistance organizations, on the other hand, are more subject to market forces and thus much more effective. When Americans feel motivated to part with their hard-earned money to help someone overseas, they want to make sure it goes only to the most effective charities. Bad news travels fast, and private charities are unlikely to send their resources where they are likely to be wasted because their contributions would soon dry up.
We all recall what happened several years ago when it was revealed that the top management of a major charity organization was paid extremely high salaries: people stopped sending money. The problem corrected itself. Sadly, this does not happen when government aid is mismanaged. More often than not, the very government agencies that mismanaged the assistance in the first place come back to Congress for a budget increase to solve the problem they created. So we should be happy to hear that Americans are willing to give so much to help those less fortunate in foreign lands. And we should think hard about all the good we could do both at home and abroad if our government did not take so much from us for its ineffective and wasteful foreign aid priorities. True charity is never coerced.
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Posted in Foreign Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Charity, Foreign Aid |
By RonPaul.com on April 24, 2006
by Ron Paul
President Bush has been under pressure to fire Defense Secretary Donald Rumsfeld, whom many view as the architect of a failed approach in Iraq. Even many ardent war hawks are unhappy with the Secretary for not having more troops on the ground in Iraq, and for conducting the war less aggressively than they would like. But the issue is not who serves as Secretary of Defense, the issue is how, when, and why the United States uses military force. It makes no sense simply to replace Mr. Rumsfeld with someone else who holds the same view, namely that it’s the job of American soldiers and U.S. taxpayers to police the world. We should be debating the proper foreign policy for our country– utopian nation building vs. the noninterventionism counseled by our founding fathers– rather than which individual is best suited to carry it out.
I happen to agree with Mr. Rumsfeld on the matter of downsizing the military as a whole and remaking it to reflect modern realities of warfare. A swifter, nimbler military would be better suited to tracking individuals like bin Laden who do not operate under the flag of any particular nation or army. The war in Iraq shows that we’re trying to adapt our military to fit our foreign policy, rather than the other way around. For all our high-tech advantages, we are mired in a simmering urban civil war that does not play to the true strengths of our troops. The old model of warfare, based on invading and occupying whole nations, is unsustainable. Both financially and in terms of manpower, American simply cannot afford any more Koreas, Vietnams, or Iraqs. Many people in the Pentagon understand that America’s armed forces are not trained in occupation, policing, and nation building.
The best way to support the troops is through a sensible foreign policy that does not place them in harm’s way unnecessarily or force them into uncomfortable, dangerous roles as occupiers. It’s interesting to note that our founders warned against maintaining standing armies at all, both because of the taxes required to do so and the threats to liberty posed by a permanent military. Consider the words of James Madison, often considered the father of the Constitution: “A standing military force, with an overgrown Executive will not long be safe companions to liberty. The means of defence against foreign danger, have been always the instruments of tyranny at home…” Madison continues: “Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few….. No nation could preserve its freedom in the midst of continual warfare.” In other words, Madison understood that large military forces can become the tools of tyrants, and can bankrupt the nations that support them. Instead of debating who should be Secretary of Defense, we should be studying the writing of our own founding fathers. Perhaps then we will question the wisdom of an open-ended, vague war on terror and the realities of trying to remake whole societies in our image.
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Posted in Foreign Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Donald Rumsfeld, Iraq |
By RonPaul.com on April 17, 2006
by Ron Paul
As the drumbeat for military action against Iran grows louder, some members of Congress are calling to expand the longstanding U.S. trade ban that bars American companies from investing in that nation. In fact, many war hawks in Washington are pushing for a comprehensive international embargo against Iran. The international response has been lukewarm, however, because the world needs Iranian oil. But we cannot underestimate the irrational, almost manic desire of some neoconservatives to attack Iran one way or another, even if it means crippling a major source of oil and destabilizing the worldwide economy. Make no mistake about it: Economic sanctions are acts of aggression. Sanctions increase poverty and misery among the very poorest inhabitants of targeted nations, and they breed tremendous resentment against those imposing them. But they rarely hurt the political and economic elites responsible for angering American leaders in the first place.
In fact, few government policies are as destructive to our economy as the embargo. While embargoes sound like strong, punitive action, in reality they represent a failed policy that four decades of experience prove doesn’t work. Conversely, economic engagement is perhaps the single most effective tool in tearing down dictatorships and spreading the message of liberty. It is important to note that economic engagement is not the same thing as foreign aid. Foreign aid, which should be abolished immediately, involves the US government spending American tax dollars to prop up other nations. Embargoes only hurt the innocent of a targeted country. While it may be difficult for the leader of an embargoed nation to get a box of American-grown rice, he will get it one way or another. For the poor peasant in the remote section of his country, however, the food will be unavailable. It is difficult to understand how denying access to food, medicine, and other products benefits anyone.
Embargo advocates claim that denying people access to our products somehow creates opposition to the despised leader. The reality, though, is that hostilities are more firmly directed at America. Father Robert Sirico, a Paulist priest, wrote in the Wall Street Journal that trade relations “strengthen people’s loyalties to each other and weaken government power.” To imagine that we somehow can spread the message of liberty to an oppressed nation by denying them access to our people and the bounty of our prosperity is contorted at best. For more than thirty years we have embargoed Cuba in an attempt to drive Fidel Castro from power. Yet he remains in power. By contrast look at the Soviet Union, a nation we allowed our producers to engage economically. Of course the Soviet Union has collapsed. Embargoes greatly harm our citizens.
As the American agricultural industry continues to develop new technology to reduce costs and increase yields, it becomes more important for farmers and ranchers to find markets outside the United States to sell their goods so they can make ends meet. By preventing our farmers and ranchers from competing in the world market, we deny them very profitable opportunities. Government meddling is always destructive to the free market; people inevitably will make wiser decisions about how to spend their money, with whom, and when, than politicians in Washington. Embargoes simply do not accomplish the ends advocates claim to desire, and are extremely harmful to the well-being of Americans.
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Posted in Foreign Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Iran, Sanctions |
By RonPaul.com on April 10, 2006
by Ron Paul
April 15th, our national tax day, comes this year just as Congress prepares to pass the 2007 federal budget. If you think paying taxes was painful this year, I’ve got some bad news: the new budget is a grotesque illustration of everything wrong with the federal government. At $2.7 trillion, it’s the largest budget in U.S. history by a long shot. Like it or not, the pressure to raise your taxes will be enormous in coming years no matter who controls Congress. The amount of money government spends, borrows, and prints simply cannot be sustained. For most people, their income tax return represents their most meaningful interaction with the federal government.
It requires them to confess their actions over the past year to the IRS in excruciating detail. It’s an annual ritual guaranteed to elicit strong feelings of disgust. Thanks to the deception of income tax withholding, however, some people actually look forward to tax time and a much-anticipated refund. Imagine how quickly Americans would demand lower taxes and spending if they had to write the federal government a check each month. Most people understandably want a simpler income tax system, but it’s useless to discuss tax reform without spending reform. Who wants a 40% flat tax? Who wants a national sales tax if it adds 50% to the retail price of everything we buy? In other words, why change the tax structure if spending stays the same? Once we accept that Congress needs $2.7 trillion from us, the only question is how it will be collected. The current answer is the labyrinthine tax code, which pits taxpayers against each other in a political scramble to make sure the other guy pays.
The truth is that Congress does not need $2.7 trillion, or anything close to it, to fund the proper constitutional functions of the federal government. The only tax reform needed is to lower or abolish existing taxes. When reform proposals seem complicated, the reason is simple: they obscure their true nature as schemes to shift the tax burden around. It’s not who pays or how we pay; it’s how much we pay. The real enemy of tax reform is the spending culture in Washington. Let me repeat: we will never have tax reform in this country until Congress changes its spending habits. The reform rhetoric, regardless of which party it comes from, never changes the reality that federal spending grows every year. Congress spent $2.4 trillion in the last Bush budget; the new budget proposes to spend $2.7 trillion. The same unconstitutional agencies are funded, the same unwise programs are perpetuated, but at higher levels than last year. The previous budget serves merely as a baseline; the only question in any given year is how much spending will increase. Once created, no spending program is ever eliminated. The cycle goes on and on, with different administrations and different people in Congress.
But could America exist without an income tax? The idea seems radical, yet in truth America did just fine without a federal income tax for the first 126 years of her history. Prior to 1913, the government operated with revenues raised through tariffs, excise taxes, and property taxes, without ever touching a worker’s paycheck. Even today, individual income taxes account for only approximately one-third of federal revenue. Eliminating one-third of the proposed 2007 budget would still leave federal spending at roughly $1.8 trillion– a sum greater than the budget just 6 years ago in 2000! Does anyone seriously believe we could not find ways to cut spending back to 2000 levels? Perhaps the idea of an America without an income tax is not so radical after all. It’s something to think about this week as we approach April 15th.
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Posted in Ron Paul's Writings, Tax Freedom, Texas Straight Talk | Tagged April 15 |
By RonPaul.com on April 3, 2006
by Ron Paul
The recent immigration protests in Los Angeles have brought the issue to the forefront, provoking strong reactions from millions of Americans. The protesters’ cause of open borders is not well served when they drape themselves in Mexican flags and chant slogans in Spanish. If anything, their protests underscore the Balkanization of America caused by widespread illegal immigration. How much longer can we maintain huge unassimilated subgroups within America, filled with millions of people who don’t speak English or participate fully in American life? Americans finally have decided the status quo is unacceptable, and immigration may be the issue that decides the 2008 presidential election. We’re often reminded that America is a nation of immigrants, implying that we’re coldhearted to restrict immigration in any way.
But the new Americans reaching our shores in the late 1800s and early 1900s were legal immigrants. In many cases they had no chance of returning home again. They maintained their various ethnic and cultural identities, but they also learned English and embraced their new nationality. Today, the overwhelming majority of Americans- including immigrants- want immigration reduced, not expanded. The economic, cultural, and political situation was very different 100 years ago. We’re often told that immigrants do the jobs Americans won’t do, and sometimes this is true. But in many instances illegal immigrants simply increase the supply of labor in a community, which lowers wages. And while cheap labor certainly benefits the economy as a whole, when calculating the true cost of illegal immigration we must include the cost of social services that many new immigrants consume- especially medical care. We must reject amnesty for illegal immigrants in any form. We cannot continue to reward lawbreakers and expect things to get better. If we reward millions who came here illegally, surely millions more will follow suit.
Ten years from now we will be in the same position, with a whole new generation of lawbreakers seeking amnesty. Amnesty also insults legal immigrants, who face years of paperwork and long waits to earn precious American citizenship. Birthright citizenship similarly rewards lawbreaking, and must be stopped. As long as illegal immigrants know their children born here will be citizens, the perverse incentive to sneak into this country remains strong. Citizenship involves more than the mere location of one’s birth. True citizenship requires cultural connections and an allegiance to the United States. Americans are happy to welcome those who wish to come here and build a better life for themselves, but we rightfully expect immigrants to show loyalty and attempt to assimilate themselves culturally. Birthright citizenship sometimes confers the benefits of being American on people who do not truly embrace America. We need to allocate far more resources, both in terms of money and manpower, to securing our borders and coastlines here at home. This is the most critical task before us, both in terms of immigration problems and the threat of foreign terrorists. Unless and until we secure our borders, illegal immigration and the problems associated with it will only increase.
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Posted in Illegal Immigration, Ron Paul's Writings, Texas Straight Talk | Tagged Birthright Citizenship |
By RonPaul.com on March 27, 2006
by Ron Paul
Last week in this column I wrote of a perfect economic storm facing America, caused by a federal government that spends, borrows, and prints so much money that our dollars are eroding in value at an alarming rate. Year after year our federal government spends beyond its revenues, prints new money to pay its debts, and borrows hundreds of billions abroad in the form of Treasury obligations that someday must be paid. With too many dollars and debt instruments in circulation, and no political will in Washington to cut spending, we’ve created a monster. Our perceived prosperity depends on keeping the great debt and credit engine pumping, but the only way to attract new lenders to fuel the engine is higher interest rates. At some point one of two things must happen: either the party in Washington ends, or the supremacy of the dollar as the world’s reserve currency ends.
It’s a sobering thought, but a choice must be made. How did this happen? How did we get to such a state? The answer is found in the nature of politics itself. The truth is that many politicians and voters essentially believe in a free lunch. They believe in a free lunch because they don’t understand basic economics, and therefore assume government can spend us into prosperity. This is the fallacy that pervades American politics today. I believe one of the greatest threats facing this nation is the willful economic ignorance of the political class. Many of our elected officials at every level have no understanding of economics whatsoever, yet they wield tremendous power over our economy through taxes, regulations, and countless other costs associated with government. They spend your money with little or no thought given to the economic consequences of their actions. It is indeed a tribute to the American entrepreneurial spirit that we have enjoyed such prosperity over the decades; clearly it is in spite of government policies rather than because of them. I certainly have seen firsthand a great deal of economic ignorance in Congress over the years.
Few members pay any attention whatsoever to the Federal Reserve Bank, despite the tremendous impact Fed policy has on their constituents. Even many members of the banking and finance committees have little or no knowledge of monetary policy. Perhaps this is why so many in Congress seem to believe we can all become rich by printing new dollars, or that we can make 2+2=5 by taking money from some people and giving it to others. We cannot suspend the laws of economics or the principles of human action any more than we can suspend the laws of physics. Yet this is precisely what Congress attempts to do time and time again, no matter how many times history proves them wrong or economists easily demonstrate the harms caused by a certain policy.
I strongly recommend that every American acquire some basic knowledge of economics, monetary policy, and the intersection of politics with the economy. No formal classroom is required; a desire to read and learn will suffice. There are countless important books to consider, but the following are an excellent starting point: The Law by Frederic Bastiat; Economics in One Lesson by Henry Hazlitt; What has Government Done to our Money? by Murray Rothbard; The Road to Serfdom by Friedrich Hayek; and Economics for Real People by Gene Callahan. If you simply read and comprehend these relatively short texts, you will know far more than most educated people about economics and government. You certainly will develop a far greater understanding of how supposedly benevolent government policies destroy prosperity. If you care about the future of this country, arm yourself with knowledge and fight back against economic ignorance. We disregard economics and history at our own peril.
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Posted in Economy, Ron Paul's Writings, Texas Straight Talk |
By RonPaul.com on March 20, 2006
by Ron Paul
Congress funds the federal government through 13 enormous appropriations bills, but even an annual budget of more than $2 trillion is not enough to satisfy Washington’s appetite for new spending. As a result, a new category of spending bill has emerged, known as the “emergency supplemental” appropriation. There’s no real emergency, however; Congress simply needs a 14th spending bill as a grab bag filled with hundreds of pages of goodies for countless favored groups, industries, individual companies, and foreign governments.
It’s common for dozens of amendments to be added to the supplemental bill, all with more money for somebody. So-called emergency supplemental spending bills, once a rarity, have become the norm over the last ten years in Washington. There’s always some excuse why Congress cannot stick to its budget, so supplemental bills are passed to permit spending extra “off-budget” funds. “Emergency” spending now has become routine, planned spending. American taxpayers should know this latest emergency supplemental bill spends almost $92 billion, making it the largest supplemental appropriation in the history of the U.S. Congress. The entire federal budget was less than $92 billion in the early 1960s! Is there really an “emergency” that requires $1.2 billion to pay off our allies for their help in Afghanistan? If Pakistan, Jordan, and other nations chose to join our war effort, why can’t their taxpayers foot the bill? Won’t those nations in closer proximity to Afghanistan benefit from the stability we are told U.S. troops will provide?
Perhaps they should pay us for stabilizing their neighborhood. But it’s always American taxpayers who end up paying. What is the emergency that requires $36 million for taxpayer-funded broadcasting programs overseas? How about $30 million to build roads in Liberia? If we’re serious about spending money for emergencies, surely $92 billion could be better spent addressing the aftermath of two domestic emergencies, namely hurricanes Katrina and Rita. The real emergency is in Washington, where Congress is spending and borrowing America into a perfect storm. As economist James Turk explains, the federal government now relies upon debt to finance 20% of its spending. Low interest rates during the 1990s and early 2000s kept interest payments on government debts- Treasury Bonds and Treasury Bills- somewhat manageable. During the same period, however, the Federal Reserve greatly increased the money supply, which has caught up to us in the form of price inflation.
The Fed now must raise rates to combat this inflation, but higher interest rates will chill economic growth and slow tax revenue. To quote Mr. Turk, “The federal government faces a potentially toxic mix of constrained revenues, soaring expenditures, ballooning debt, and rising interest rates.” This is the real emergency that must be addressed in Washington, and the only solution is to reduce government spending substantially. If we don’t put the brakes on the spending spree soon, we may find ourselves facing another period of economic malaise that rivals the 1930s.
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Posted in Ron Paul's Writings, Spending, Texas Straight Talk |
By RonPaul.com on March 13, 2006
by Ron Paul
Today our national debt stands at $8.2 trillion, which represents about $26,000 for every man, woman, and child in America. Interestingly, the legal debt limit is only $8.18 trillion, a figure that was reached a few weeks ago. This means the Treasury department must ask Congress to raise the debt limit very soon, most likely as part of a larger bill so it can be hidden from the American people. Raising the debt ceiling is nothing new. Congress raised it many times over the last 15 years, despite the supposed “surpluses” of the Clinton years.
Those single-year surpluses were based on accounting tricks that treated Social Security funds as general revenues. In reality the federal government ran deficits throughout the 1990s, and the federal debt rose steadily. Former Federal Reserve Chairman Alan Greenspan made it easier for Congress to obscure the extent of federal debt. He endorsed a change in the law that redefined Social Security and veterans pensions. In reality those obligations are debts, just like any other bill that must be paid in the future. But Mr. Greenspan urged renaming these obligations “intergovernment accounts,” which magically changed them from debts to “accrued liabilities.” This semantic shift frees up lots of room under the debt ceiling for more borrowing. Debt and credit, wisely used, can be proper tools for individuals and businesses.
In a free society, however, we can never view expansion as a proper goal for government. Unlike a private business, our federal government should not be seeking out new ways to increase the scope of its dubious “services.” Any government that consumes at least 25% of the American economy and still can’t balance its books is a government that vastly overspends. I disagree with the supply-side argument that government debt doesn’t matter. The issue is not whether the Treasury has sufficient current income to service the debt, but rather whether a government that spends so much ultimately will destroy its own economy. Debt does matter, especially to future generations that will be asked to pay for our extravagance. When government borrows money, the actual borrowers- big spending administrations and politicians- never have to pay it back. Remember, administrations come and go, members of congress become highly paid lobbyists, and bureaucrats retire with safe pensions. The benefits of deficit spending are enjoyed immediately by politicians, who trade pork for votes and enjoy adulation for promising to cure every social ill.
The bills always come due later, however. Nobody ever looks back and says, “Congressman so-and-so got us into this mess when he voted for all that spending 20 years ago.” For government, the federal budget is essentially a credit card with no spending limit, billed to somebody else. We hardly should be surprised that Congress racks up huge amounts of debt! By contrast, responsible people restrain their borrowing because they will have to pay the money back. It’s time for American taxpayers to understand that every dollar will have to be repaid. We should have the courage to face our grandchildren knowing that we have done all we can to end the government spending spree.
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Posted in Debt, Ron Paul's Writings, Texas Straight Talk |
By RonPaul.com on March 6, 2006
by Ron Paul
April 15th is once again approaching and with it the necessity of filling out your tax return. It is a good time to reflect on the taxes you do pay – and especially on the taxes you may soon be forced to pay. Throughout the year you paid federal taxes through withholding, including Social Security payroll taxes. You also paid state income taxes, unless you’re fortunate enough to live in Texas or another state without an income tax. You paid local property taxes. You paid local sales taxes and numerous miscellaneous taxes on your vehicles and gasoline and so many other things. Like most people, you probably feel taxed to death by all these layers of taxes.
Well, hold on to your wallets, because the United Nations once again has launched a plan to impose a whole new level of global taxes on us. The latest UN tax scheme was revealed at the World Economic Forum in Davos, Switzerland in January. At this conference of the world’s financial elite, the United Nations Development Programme (UNDP) unveiled a UN plan to take seven trillion dollars from developed nations for use by the UN to save the rest of the world from all of its problems. The United Nations remains determined to rob from wealthy countries and, after taking a big cut for itself, send what’s left to the poor countries. Of course, most of this money will go to the very dictators whose reckless policies have impoverished their citizens. According to the international bureaucrats of the UN, wherever poverty exists in the rest of the world it is always our fault. According to them, our prosperity comes not from hard work, legal protection of property rights, and our capitalist system, but rather because we exploit the poor of the third world. Somehow, it’s always our fault. Where will the seven trillion dollars to fund the latest UN scheme come from? Much of it is to come from a UN-imposed fine on countries that in the UN’s judgment are polluting too much.
This attack on productivity will slow our economy and lead to a loss of jobs in the United States. The UN global tax plan also resurrects the long-held dream of the “Tobin Tax,” and doubles the targeted income from such a tax to a whopping three trillion dollars. The “Tobin tax,” named after the Yale professor who proposed it, would be imposed on all worldwide currency transactions. Such a tax could prove quite lucrative for the UN, given the vast amount of currency that trades hands at certain times. It also might be a politically acceptable starting point, because most average people do not engage in cross-border currency transactions. A dangerous precedent would be set, however: the idea that the UN possesses legitimate taxing authority to fund its operations. Since I was elected to Congress I have been fighting continuously against these UN efforts to pick your pocket. In the 109th Congress I successfully amended the Foreign Operations Appropriations Act of 2005 to prohibit any of the funds in the Act from being used by the U.N. to develop or publicize any proposal concerning taxation or fees on any United States person to raise revenue for the U.N. or any of its specialized or affiliated agencies. I also introduced H. R. 1017 in the current Congress which would permanently prohibit United States contributions to the United Nations if that organization develops, implements, or publicizes any proposal to tax Americans.
Of course, my preference is that the United States end its participation in the corrupt UN entirely, and I introduce HR 1146 in every Congress to do just that. But until my colleagues are willing to take this important step, I will continue to offer measures like my amendment last year to help protect your hard-earned money from the greedy hands of the globalist United Nations.
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Posted in Ron Paul's Writings, Texas Straight Talk | Tagged April 15, IRS, Tobin Tax |
