In his latest column, Ron Paul once again prescribes the only cure that could save America: Cut taxes, cut spending, bring our troops home, downsize government, abolish the Federal Reserve, return to sound money and start living within our means.
Cures for Our Economic Disease
by Ron Paul
I have recently had several opportunities on various news programs to discuss the economy and what is wrong with the so-called economic stimulus package. I have said over and over what we shouldn’t be doing, and now I’d like to explain what we should be doing.
But to improve the situation, you must first have a solid grasp of how we got here. Government policies and central planning created the housing bubble, now going bust. About a decade ago the government made expanded homeownership and affordable housing a public goal. Through Fannie Mae, Freddie Mac and the secondary mortgage market the government incentivized creative, low down-payment, more widely available mortgage products, and discouraged the market-proven lending standards of the past. The Federal Reserve kept interest rates artificially low, which added more fuel to this fire. Many related sectors temporarily flourished because of this, and many people got into homes they otherwise could not have afforded. The increased demand for housing sent prices soaring until in many markets housing became even more unaffordable, necessitating even more creative mortgages, and impossibly leveraging homeowners. Many risky investment vehicles such as mortgage-backed securities, derivatives, credit default swaps grew out of this unsustainable situation. As the foreclosures began, the house of cards started to tumble. Too many people have confused the symptoms and the pain of the bust with the problematic policies that caused the bubble, which is really what needs to be treated.
First of all, just as the best cure for a hangover is not to drink so much, the best cure for a recession is a recession. It is time to sober up and return to free market sanity, risk and reward, supply and demand, without political intervention. Politicians are good at catering to the needs of special interests, but very bad at determining what needs to take place in the market. Government should stick to punishing fraud and enforcing contracts. When they use the tax code, bureaucratic departments and their manipulative rules and regulations to dictate social and economic behavior, we end up with distortions and malinvestments. Bailing out banks, continuing failed Fed policies and strapping the taxpayer with toxic debt will worsen the pain, and punish the innocent.
If Congress really wanted to do something helpful, it would cut taxes. Ideally, we would repeal the income tax altogether and get the IRS off the economy’s back, which would be a huge boon. We should also cut spending. Cut every unconstitutional department and program, every wasteful governmental encroachment on the people’s liberty and money, starting with our massive overseas empire. The cost of our empire is bringing us to our knees, just as the Soviets’ empire did to them. Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests.
These things would constitute real change, real economic stimulus. The plans being bandied about Washington are just more of the same. As long as no one seriously considers the cure, we are unfortunately destined to prolong the disease.
In a speech to the Mises Circle in Houston, Ron Paul recounts how the “biggest bubble of all history” was created, inflated, reinflated, and papered over, until it finally burst. He says that there is only a small amount of confidence left in the dollar, and describes the rapidly growing support for the movement to end the Fed. Finally, he expresses his hopes and fears for the future, and explains that building an intellectual consensus among people who can make a real difference is more effective than trying to achieve an electoral majority.
Source: Mises Institute / Mises Circle in Houston
Event: Our Enemy, Inflation
Date: 1/24/2009
Transcript:
Welcome to Houston. For those who’ve come from outside Houston, it’s good to be here. I would like to introduce my wife, my wife Carol’s with me today. She had to show up because she has played hooky a couple of times this summer and so she has to make up for that, but she’s doing well and I’m very pleased with that.
But I am very pleased to come and speak and Lew, he may have given me a topic, but he didn’t announce it, so that means I can say anything I want, right? Well you know, I do have some good news though, and the good news is this, that it is very clear that when governments and government officials act, you know, outside the law, it’s an encouragement for individuals to act outside the law. And if you’re looking for a revolution, believe me, there’s going to be a lot of activity going on. Just think about it. We could start with this little insurance, well-endowed insurance program called Social Security, run honestly and ethically and above board. But lo and behold, they complain when a guy who like Mad ol’ Madoff goes in and does the same thing, you know?
But isn’t it wonderful who’s going to be Secretary of Treasury? You don’t believe in paying taxes, so what the heck? What is going to happen these days? I mean we may truly see some exciting times ahead, but no, he believes in collecting taxes now and he’ll probably be very ruthless in collection of taxes, but obviously it does make a strong point. Continue reading “Ron Paul: End The Fed, Stop Inflation, Restore Sound Money”
Ron Paul is interviewed about “dumping the faith-based Federal Reserve system”. He talks about the history of the gold standard and the dollar, and proposes a transition period where free-market gold currencies could openly compete against the dollar.
Channel: Fox Business
Date: 1/30/2009
Transcript:
Reporter: It’s not too long ago the dollar was as good as gold. In fact, dollar bills were labeled gold certificates, so just imagine if the dollar was as good as gold once again. If confidence is one of the failures of our financial system right now, would a gold standard restore the faith and confidence and allow us to move on? The loudest voice in favor of dumping the faith based Federal Reserve System going back to the gold standard is Congressman Ron Paul; he joins us now by phone tonight. Good to hear you Congressman, thanks for coming in, appreciate it.
Ron Paul: Thank you, good to be with you.
Reporter: So, tell us what the possibility, how would we go about going back to gold standard?
Ron Paul: Well we have some pretty good history to look at; we can look at our own history. We went off the gold standard during the civil war period, and the gold price soared, a couple hundred dollars, from twenty dollars. We lived in a different time then, in the 1970s they passed a Resumption Act and they had a three year period and a lot of part 1870s, and there was a transition. They quit printing greenbacks, they withdrew some greenbacks, they balanced the budget and we weren’t running a welfare-warfare state. And the people, believe it or not, trusted their government and it was a non-event and three years the dollar was as good as gold at twenty dollars an ounce. England, after World War I, tried to do the same thing, but they had too many pounds circulating. They went back to an old price and they didn’t withdraw any pounds so it didn’t work, and now we have a bigger problem. The transition would be pretty tough, not written and talked a lot about this and you’d have to device a system where there would be a transition where maybe you could have a gold standard competing with a paper standard and then obviously gold would win out.
Reporter: Well sure.
Ron Paul: People would eventually go to gold because the paper, we’re getting down to the bottom right now. The last thing before they really rushed to gold is the Treasury bill.
Reporter: And that’s about popped hasn’t it the dues on that?
Ron Paul: Look at what the rates have done just recently so if money quits flowing in there or what if a few foreigners decide to dump some of that stuff then the panic is uncontrollable. Then you’re going to see gold instead of being pressed twenty dollars a day, it might be a hundred dollars or two hundred dollars a day, I believe that is conceivable. Continue reading “Going Back To The Gold Standard?”
Statement of Congressman Ron Paul
United States House of Representatives
Statement on the Tax Free Tips Act
January 29, 2009
Madame Speaker, I rise to help millions of working Americans by introducing the Tax Free Tips Act. As the title suggests, this legislation makes tips exempt from federal income and payroll taxes. Tips often compose a substantial portion of the earnings of waiters, waitresses, and other service-sector employees. However, unlike regular wages, a service-sector employee usually has no guarantee of, or legal right to, a tip. Instead, the amount of a tip usually depends on how well an employee satisfies a client. Since the amount of taxes one pays increases along with the size of tip, taxing tips punishes workers for doing a superior job!
Many service-sector employers are young people trying to make money to pay for their education, or single parents struggling to provide for their children. Oftentimes, these workers work two jobs in hopes of making a better life for themselves and their families. The Tax Free Tips Act gives these hard-working Americans an immediate pay raise. People may use this pay raise to devote more resources to their children’s, or their own, education, or to save for a home, retirement, or to start their own businesses.
Helping Americans improve themselves by reducing their taxes will make our country stronger. I, therefore, hope all my colleges will join me in cosponsoring the Tax Free Tips Act.
Statement of Congressman Ron Paul
United States House of Representatives
Statement Introducing Legislation Allowing Interstate Shipment of Unpasteurized Milk
January 29, 2009
Madame Speaker, I rise to introduce legislation that allows the shipment and distribution of unpasteurized milk and milk products for human consumption across state lines. This legislation removes an unconstitutional restraint on farmers who wish to sell or otherwise distribute, and people who wish to consume, unpasteurized milk and milk products.
My office has heard from numerous people who would like to obtain unpasteurized milk. Many of these people have done their own research and come to the conclusion that unpasteurized milk is healthier than pasteurized milk. These Americans have the right to consume these products without having the federal government second-guess their judgment about what products best promote health. If there are legitimate concerns about the safety of unpasteurized milk, those concerns should be addressed at the state and local level.
I urge my colleagues to join me in promoting consumers’ rights, the original intent of the Constitution, and federalism by cosponsoring my legislation to allow the interstate shipment of unpasteurized milk and milk products for human consumption.
Ron Paul takes caller questions on C-SPAN, covering the financial crisis, the TARP bailout, the stimulus package, the Republican party, and his ongoing efforts to spread the idea of liberty.
Source: Washington Journal
Channel: C-SPAN
Date: 1/29/2009
Transcript:
Reporter: Former presidential candidate and physician, Representative Ron Paul, of Texas’ 14th district and member of the financial service committee, our final guest this morning. Mr. Paul, I was thinking when I was listening to some of Senator Sanders’ answers that there are many areas where your views intersect. Both of you are strong critics of NAFTA, neither of you voted for the TARP program and yet your prescriptions for how to fix the economy couldn’t be more different. What do you think will work with what ails United States right now?
Ron Paul: Nothing’s going to work unless you understand how we got into the problem. A lot of people object to me saying that because they [don't] want to do what we have to do right now. But as a physician I was always taught that you have to know what caused the disease to know how to give the treatment. And if you look at that you’ll find out that it was too much government from my viewpoint, too much spending, too much debt, too much inflation by the Federal Reserve, too much interference in the marketplace, too much price fixing of interest rates, too much propping up of certain industries like housing, and then you get a bubble. You have to understand how a bubble is formed and then you can expect, you know, the collapse of a bubble, which we as Austrian economists have predicted would happen, and it did. So therefore what you want to do is if you know if there’s a lot of pain and suffering and malinvestment and excessive debt, the treatment is you got to get rid of it. That means you have to liquidate the debt and remove all the mistakes, the malinvestment, which politically it means, take more of a hands-off position. And that, of course, nobody can do that. Politicians are trained to do stuff. But government can do things to improve things. They could lower spending, they could lower taxes, they could deregulate, they could regulate the Federal Reserve which we don’t, we could regulate the treasury when they are given $350 billion to spend. So the regulation is directed in a different manner but we’re doing exactly the opposite. We are doing more like we did in the Depression. The Federal Reserve and excessive government caused the boom of the 20s and the depression of the 30s by not allowing the correction, not allowing the treatment. The treatment is the liquidation. There is some pain with that but the pain is a result of the mistakes made previously. The question is only now do you have short-term pain that lasts for a years, or do you keep propping the bad system up and allow this pain and agony to grow and lengthen. And that’s what we’re doing and that’s why we’re in great danger now of taking a very very serious recession and turning it into a depression.
Reporter: What we are seeing in the very short period of time, the second half of the TARP, the second tranche $350 billion. The Senate price tag on the stimulus package $880 billion and news that the treasury secretary is likely to announce a large package which may include the creation of something called a bad bank. What do you see as the outcome of these measures? Where are we going with this? Continue reading “Ron Paul on C-SPAN’s Washington Journal”
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Ronald Reagan and Ron Paul
Ronald Reagan: "Ron Paul is one of the outstanding leaders fighting for a stronger national defense. As a former Air Force officer, he knows well the needs of our armed forces, and he always puts them first. We need to keep him fighting for our country."
Ron Paul in the Air Force
Ron Paul is a proud Air Force veteran. He served as a flight surgeon in the U.S. Air Force from 1963 to 1965 and then in the U.S. Air National Guard from 1965 to 1968. During his military service Ron Paul spent time on the ground in Iran, Pakistan, South Korea, Turkey, Ethiopia and other countries.
Ron Paul has been married to his wife Carol Wells since 1957. They have five children: Ronald, Lori, Rand, Robert, and Joy. Paul's son Rand is the junior senator from the state of Kentucky.
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