By RonPaul.com on February 26, 2007
by Ron Paul
Hundreds of thousands of American troops already occupy Afghanistan and Iraq, a number that is rising as the military surge moves forward. The justification, given endlessly since September 11th, is that both support terrorism and thus pose a risk to the United States. Yet when we step back and examine the region as a whole, it’s obvious that these two impoverished countries, neither of which has any real military, pose very little threat to American national security when compared to other Middle Eastern nations. The decision to attack them, while treating some of region’s worst regimes as allies, shows the deadly hypocrisy of our foreign policy in the Middle East. Consider Saudi Arabia, the native home of most of the September 11th hijackers. The Saudis, unlike the Iraqis, have proven connections to al Qaeda. Saudi charities have funneled money to Islamic terrorist groups. Yet the administration insists on calling Saudi Arabia a “good partner in the war on terror.”
Why? Because the U.S. has a longstanding relationship with the Saudi royal family, and a long history of commercial interests relating to Saudi oil. So successive administrations continue to treat the Saudis as something they are not: a reliable and honest friend in the Middle East. The same is true of Pakistan, where General Musharaf seized power by force in a 1999 coup. The Clinton administration quickly accepted his new leadership as legitimate, to the dismay of India and many Muslim Pakistanis. Since 9/11, we have showered Pakistan with millions in foreign aid, ostensibly in exchange for Musharaf’s allegiance against al Qaeda. Yet has our new ally rewarded our support? Hardly. The Pakistanis almost certainly have harbored bin Laden in their remote mountains, and show little interest in pursuing him or allowing anyone else to pursue him. Pakistan has signed peace agreements with Taliban leaders, and by some accounts bin Laden is a folk hero to many Pakistanis.
Furthermore, more members of al Qaeda probably live within Pakistan than any other country today. North Korea developed its nuclear capability with technology sold to them by the Pakistanis. Yet somehow we remain friends with Pakistan, while Saddam Hussein, who had no connection to bin Laden and no friends in the Islamic fundamentalist world, was made a scapegoat. The tired assertion that America “supports democracy” in the Middle East is increasingly transparent. It was false 50 years ago, when we supported and funded the hated Shah of Iran to prevent nationalization of Iranian oil, and it’s false today when we back an unelected military dictator in Pakistan- just to name two examples. If honest democratic elections were held throughout the Middle East tomorrow, many countries would elect religious fundamentalist leaders hostile to the United States. Cliché or not, the Arab Street really doesn’t like America, so we should stop the charade about democracy and start pursuing a coherent foreign policy that serves America’s long-term interests. A coherent foreign policy is based on the understanding that America is best served by not interfering in the deadly conflicts that define the Middle East. Yes, we need Middle Eastern oil, but we can reduce our need by exploring domestic sources.
We should rid ourselves of the notion that we are at the mercy of the oil-producing countries- as the world’s largest oil consumer, their wealth depends on our business. We should stop the endless game of playing faction against faction, and recognize that buying allies doesn’t work. We should curtail the heavy militarization of the area by ending our disastrous foreign aid payments. We should stop propping up dictators and putting band-aids on festering problems. We should understand that our political and military involvement in the region creates far more problems that it solves. All Americans will benefit, both in terms of their safety and their pocketbooks, if we pursue a coherent, neutral foreign policy of non-interventionism, free trade, and self-determination in the Middle East.
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Posted in Foreign Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Middle East |
By RonPaul.com on February 19, 2007
by Ron Paul
Federal Reserve Chairman Ben Bernanke testifies twice every year before the congressional Financial Services committee, and I look forward to these opportunities to raise questions about monetary policy. I believe monetary policy is critically important yet overlooked in Washington. Money is the lifeblood of any economy, and control over a nation’s currency means control over its economic well being. Fed bankers quite literally determine the value of our money, by controlling the supply of dollars and establishing interest rates. Their actions can make you richer or poorer overnight, in terms of the value of your savings and the buying power of your paycheck.
So I urge all Americans to educate themselves about monetary policy, and better understand how a small group of unelected individuals at the Federal Reserve and Treasury department wield tremendous power over our lives. The following are some excerpted comments from my opening remarks at the hearing with Mr. Bernanke: Transparency in monetary policy is a goal we should all support. I’ve often wondered why Congress so willingly has given up its prerogative over monetary policy. Astonishingly, Congress in essence has ceded total control over the value of our money to a secretive central bank. Congress, although not by law, essentially has given up all its oversight responsibility over the Federal Reserve.
There are no true audits, and Congress knows nothing of the conversations, plans, and actions taken in concert with other central banks. We get less and less information regarding the money supply each year, especially now that M3 is no longer reported. The role the Fed plays in the President’s secretive Working Group on Financial Markets goes unnoticed by members of Congress. The Federal Reserve shows no willingness to inform Congress voluntarily about how often the Working Group meets, what actions it takes that affect the financial markets, or why it takes those actions. But these actions, directed by the Federal Reserve, alter the purchasing power of our money. And that purchasing power is always reduced.
The dollar today is worth only four cents compared to the dollar in 1913, when the Federal Reserve started. This has profound consequences for our economy and our political stability. All paper currencies are vulnerable to collapse, and history is replete with examples of great suffering caused by such collapses, especially to a nation’s poor and middle class. This leads to political turmoil. Government officials consistently claim that inflation is in check at barely 2%, but middle class Americans know that their purchasing power–especially when it comes to housing, energy, medical care, and school tuition– is shrinking much faster than 2% each year. We look at GDP numbers to reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the higher standard of living that monetary inflation brings to the privileged few. Those few have access to the newly created money first, before its value is diluted. For example: Before the breakdown of the Bretton Woods system, CEO income was about 30 times the average worker’s pay.
Today, it’s closer to 500 times. It’s hard to explain this simply by market forces and increases in productivity. One Wall Street firm last year gave out bonuses totaling $16.5 billion. There’s little evidence that this represents free market capitalism. In 2006 dollars, the minimum wage was $9.50 before the 1971 breakdown of Bretton Woods. Today that dollar is worth $5.15. Congress congratulates itself for raising the minimum wage by mandate, but in reality it has lowered the minimum wage by allowing the Fed to devalue the dollar. We must consider how the growing inequalities created by our monetary system will lead to social discord. How can a policy of steadily debasing our currency be defended morally, knowing what harm it causes to those who still believe in saving money and assuming responsibility for themselves in their retirement years? Is it any wonder we are a nation of debtors rather than savers? We need more transparency in how the Federal Reserve carries out monetary policy, and we need it soon.
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Posted in Federal Reserve, Monetary Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Dollar, Inflation |
By RonPaul.com on February 12, 2007
by Ron Paul
Two weeks ago I discussed how Congress and the administration use our fiat money system to literally create some of the funds needed to prosecute our ongoing wars in Iraq and Afghanistan. We’ve already spent more than $500 billion in Iraq, mostly through supplemental spending bills that are not part of the normal appropriations and budget process. But with costs soaring and no end to the war in sight, yet another supplemental spending bill must be passed soon—and both parties in Congress are only too willing to provide the money under the guise of supporting the troops. Never mind that the American people showed their dissatisfaction with the war in the fall elections.
Congress lacks the political will to stand up to the administration and assert its power over the purse strings, and too many vested interests in the defense sector benefit from the supplemental bills. A cynic might even suggest that many Democrats want the war to drag on, despite their supposed opposition, to damage the president politically and benefit them in 2008. But whatever the reason, the money for war keeps flowing. Defense Department officials will ask Congress for the next supplemental bill in coming weeks. The amount requested is likely to be at least $140 billion. If we stay in Iraq beyond 2007–and the administration has made it clear that we will– the bill to American taxpayers easily could top one trillion dollars in another year or two. I doubt very seriously that most Americans think the war in Iraq is worth one trillion dollars. Even those who do must face the reality that the federal government simply doesn’t have the money. Congress continues to spend more than the Treasury raises in taxes year after year, by borrowing money abroad or simply printing it. Paying for war with credit is reckless and stupid, but paying for war by depreciating our currency is criminal. Even the most modest suggestions for controlling spending in Iraq have been rejected.
Some in Congress argued that reconstruction money should be paid back when Iraq’s huge oil reserves resume operation. Another idea was to find dollar-for-dollar offsets in the rest of the federal budget for every dollar spent in Iraq. But the administration adamantly opposed both ideas. Budget cuts are unpopular, and the profits from Iraqi oil will never compensate American taxpayers. The mentality in Washington is simple: avoid hard choices at all costs; spend money at will; ignore deficits; inflate the money supply as needed; and trust that the whole mess somehow will be taken care of by unprecedented economic growth in the future. We have embarked on the most expensive nation-building experiment in history. We seek nothing less than to rebuild Iraq’s judicial system, financial system, legal system, transportation system, and political system from the top down– all with hundreds of billion of US tax dollars. We will pay to provide job training for Iraqis; we will pay to secure Iraq’s borders; we will pay for housing, health care, social services, utilities, roads, schools, jails, and food in Iraq. In doing so, we will saddle future generations of Americans with billions in government debt. The question of whether Iraq is worth this much to us is one Congress should answer now– by refusing another nickel for supplemental spending bills.
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Posted in Foreign Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Iraq |
By RonPaul.com on February 5, 2007
by Ron Paul
With the elections over and the 110th Congress settling in, the media have been reporting ad nauseam about who has assumed new political power in Washington. We’re subjected to breathless reports about emerging power brokers in Congress; how so-and-so is now the powerful chair of an important committee; how certain candidates are amassing power for the 2008 elections, and so on. Nobody questions this use of the word “power,” or considers its connotations. It’s simply assumed, in Washington and the mainstream media, that political power is proper and inevitable. The problem is that politicians are not supposed to have power over us– we’re supposed to be free. We seem to have forgotten that freedom means the absence of government coercion. So when politicians and the media celebrate political power, they really are celebrating the power of certain individuals to use coercive state force. Remember that one’s relationship with the state is never voluntary.
Every government edict, policy, regulation, court decision, and law ultimately is backed up by force, in the form of police, guns, and jails. That is why political power must be fiercely constrained by the American people. The desire for power over other human beings is not something to celebrate, but something to condemn! The 20th century’s worst tyrants were political figures, men who fanatically sought power over others through the apparatus of the state. They wielded that power absolutely, without regard for the rule of law. Our constitutional system, by contrast, was designed to restrain political power and place limits on the size and scope of government.
It is this system, the rule of law, which we should celebrate–not political victories. Political power is not like the power possessed by those who otherwise obtain fame and fortune. After all, even the wealthiest individual cannot force anyone to buy a particular good or service; even the most famous celebrities cannot force anyone to pay attention to them. It is only when elites become politically connected that they begin to impose their views on all of us. In a free society, government is restrained–and therefore political power is less important. I believe the proper role for government in America is to provide national defense, a court system for civil disputes, a criminal justice system for acts of force and fraud, and little else. In other words, the state as referee rather than an active participant in our society. Those who hold political power, however, would lose their status in a society with truly limited government.
It simply would not matter much who occupied various political posts, since their ability to tax, spend, and regulate would be severely curtailed. This is why champions of political power promote an activist government that involves itself in every area of our lives from cradle to grave. They gain popular support by promising voters that government will take care of everyone, while the media shower them with praise for their bold vision. Political power is inherently dangerous in a free society: it threatens the rule of law, and thus threatens our fundamental freedoms. Those who understand this should object whenever political power is glorified.
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Posted in Ron Paul's Writings, Texas Straight Talk |
By RonPaul.com on January 29, 2007
by Ron Paul
The Pentagon recently reported that it now spends roughly $8.4 billion per month waging the war in Iraq, while the additional cost of our engagement in Afghanistan brings the monthly total to a staggering $10 billion. Since 2001, Congress has spent more than $500 billion on specific appropriations for Iraq. This sum is not reflected in official budget and deficit projections. Congress has funded the war by passing a series of so-called “supplemental” spending bills, which are passed outside of the normal appropriations process and thus deemed off-budget. This is fundamentally dishonest: if we’re going to have a war, let’s face the costs– both human and economic– squarely.
Congress has no business hiding the costs of war through accounting tricks. As the war in Iraq surges forward, and the administration ponders military action against Iran, it’s important to ask ourselves an overlooked question: Can we really afford it? If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I’m quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted. Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular.
The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve system is a creation of Congress. The result of this arrangement is inflation. And inflation finances war. Economist Lawrence Parks has explained how the creation of the Federal Reserve Bank in 1913 made possible our involvement in World War I. Without the ability to create new money, the federal government never could have afforded the enormous mobilization of men and material. Prior to that, American wars were financed through taxes and borrowing, both of which have limits. But government printing presses, at least in theory, have no limits. That’s why the money supply has nearly tripled just since 1990. For perspective, consider our ongoing military commitment in Korea.
In Korea alone, U.S. taxpayers have spent $1 trillion in today’s dollars over 55 years. What do we have to show for it? North Korea is a belligerent adversary armed with nuclear weapons, while South Korea is at best ambivalent about our role as their protector. The stalemate stretches on with no end in sight, as the grandchildren and great-grandchildren of the men who fought in Korea give little thought to what was gained or lost. The Korean conflict should serve as a cautionary tale against the open-ended military occupation of any region. The $500 billion we’ve officially spent in Iraq is an enormous sum, but the real total is much higher, hidden within the Defense Department and foreign aid budgets. As we build permanent military bases and a $1 billion embassy in Iraq, we need to keep asking whether it’s really worth it. Congress should at least fund the war in an honest way so the American people can judge for themselves.
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Posted in Federal Reserve, Foreign Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Inflation, Iran, Korea, War |
By RonPaul.com on January 22, 2007
by Ron Paul
Former President Carter’s new book about the ongoing conflict between Israel and Palestine has raised the ire of Americans on two sides of the debate. I say “two sides” rather than “both sides,” because there is another perspective that is never discussed in American politics. That perspective is the perspective of our founding fathers, namely that America should not intervene in the internal affairs of other nations. Everyone assumes America must play the leading role in crafting some settlement or compromise between the Israelis and the Palestinians. But Jefferson, Madison, and Washington explicitly warned against involving ourselves in foreign conflicts.
The conflict in Gaza and the West Bank is almost like a schoolyard fight: when America and the world stand watching, neither side will give an inch for fear of appearing weak. But deep down, the people who actually have to live there desperately want an end to the violence. They don’t need solutions imposed by outsiders. It’s easy to sit here safe in America and talk tough, but we’re not the ones suffering. Practically speaking, our meddling in the Middle East has only intensified strife and conflict. American tax dollars have militarized the entire region. We give Israel about $3 billion each year, but we also give Egypt $2 billion. Most other Middle East countries get money too, some of which ends up in the hands of Palestinian terrorists.
Both sides have far more military weapons as a result. Talk about adding fuel to the fire! Our foolish and unconstitutional foreign aid has produced more violence, not less. Congress and each successive administration pledge their political, financial, and military support for Israel. Yet while we call ourselves a strong ally of the Israeli people, we send billions in foreign aid every year to some Muslim states that many Israelis regard as enemies. From the Israeli point of view, many of the same Islamic nations we fund with our tax dollars want to destroy the Jewish state. Many average Israelis and American Jews see America as hypocritically hedging its bets. This illustrates perfectly the inherent problem with foreign aid: once we give money to one country, we have to give it to all the rest or risk making enemies.
This is especially true in the Middle East and other strife-torn regions, where our financial support for one side is seen as an act of aggression by the other. Just as our money never makes Israel secure, it doesn’t buy us any true friends elsewhere in the region. On the contrary, millions of Muslims hate the United States. It is time to challenge the notion that it is our job to broker peace in the Middle East and every other troubled region across the globe. America can and should use every diplomatic means at our disposal to end the violence in the West Bank, but we should draw the line at any further entanglement. Third-party outsiders cannot impose political solutions in Palestine or anywhere else. Peace can be achieved only when self-determination operates freely in all nations. “Peace plans” imposed by outsiders or the UN cause resentment and seldom produce lasting peace. The simple truth is that we cannot resolve every human conflict across the globe, and there will always be violence somewhere on earth. The fatal conceit lies in believing America can impose geopolitical solutions wherever it chooses.
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Posted in Foreign Policy, Ron Paul's Writings, Texas Straight Talk | Tagged Gaza, Israel, Middle East, Palestine, Peace |
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