By RonPaul.com on November 14, 2005
by Ron Paul
Congress is poised to consider a budget bill this week in a vote both parties consider critical, but in reality the bill is nothing more than a political exercise by congressional leaders designed to convince voters that something is being done about runaway federal spending. Having spent the last five years out-pandering the Democrats by spending money to buy off various voting constituencies, congressional Republicans now find themselves forced to appeal to their unhappy conservative base by applying window dressing to the bloated 2006 federal budget. Ignore the talk about Congress “slashing” vital government programs in this budget bill, which is just nonsense. This Congress couldn’t slash spending if the members’ lives depended on it. Remember, this is a Congress that has increased spending by 33% since President Bush took office in 2001.
And we’re not talking about national defense or anti-terrorism spending. We’re talking about a one-third increase in garden variety domestic spending. This is also a Congress that passed the 2003 Medicare prescription drug bill, the single largest increase in entitlement spending since the Great Society programs of the 1960s. So there’s not much credibility to be found on Capitol Hill when it comes to reducing the federal budget. The proposed bill calls for such tiny reductions in spending that frankly it’s shameful for Republicans to claim it represents a victory for fiscal conservatism. And it’s equally preposterous for Democrats to claim it represents some great threat to precious entitlements. The dollar amounts contained in the bill are so insignificant that both parties are guilty of meaningless grandstanding. The budget reconciliation bill reduces spending by a mere $5.6 billion in a 2006 budget of nearly $2.5 trillion. This represents just a fraction of one percent, a laughable amount. Does anyone seriously believe the federal budget cannot be trimmed more than this? Consider that the federal budget was only about $1 trillion in 1990, a mere 15 years ago- and government was far too large and too intrusive then. After all the talk about deficit spending, this is the best a Republican congress and Republican president can come up with? What a farce. Projections of big savings beyond 2006 because of this bill are pure fiction.
Congress has no authority to pass budgets or appropriate money beyond the next fiscal year. Future Congresses will not pay one whit of attention to this bill, and its hopeful predictions will be forgotten. Furthermore, we need to get our budget cutting priorities in order. Why are we cutting domestic programs while we continue to spend billions on infrastructure in Iraq? In just the past two weeks Congress approved a $21 billion foreign aid bill and a $130 million scheme to provide water for developing nations. Why in the world aren’t these boondoggles cut first? The spending culture in Washington creates an attitude that government can solve every problem both at home and abroad simply by funding another program. But we’ve reached a tipping point, with $8 trillion in debt and looming Social Security and Medicare crises. Government spending has become a national security issue, because unless Congress stops the bleeding the resulting economic downturn will cause us more harm than any terrorist group could ever hope to cause. And we’re doing it to ourselves, from within. Congress is running out of options in its game of buy now, pay later.
Foreign central banks are less interested in loaning us money. Treasury printing presses are worn out from the unprecedented increase in dollars ordered by the Federal Reserve Bank over the past 15 years. Taxpayers are tapped out. Where will the money for Big Government conservatism come from? Congressional Republicans and Democrats can posture until doomsday, but the needed course of action is clear. Declare an across-the-board ten percent cut for the federal 2006 budget, and focus spending on domestic priorities. If congressional leaders cannot take this simple step toward balancing the 2006 budget, they should at least not attempt to delude the American people that serious spending cuts are being made.
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Posted in Debt, Ron Paul's Writings, Texas Straight Talk | Tagged Budget |
By RonPaul.com on November 7, 2005
by Ron Paul
In the wake of Hurricanes Katrina and Rita, and with an ongoing war in Iraq that costs more than $1 billion per week, taxpayers might think Congress has better things to do with $21 billion than send it overseas. Yet that’s exactly what Congress did last Friday, approving a useless and counterproductive foreign aid spending bill. Never mind that the total federal debt recently topped $8 trillion, or that a major US city was virtually destroyed only a few months ago. Arrogant is the only word to describe a Congress that cares so little about its own taxpaying citizens while pretending to know what is best for the world. Consider just a few of the ways your money will be used under the new bill:
$638 million for the unelected Musharraf government in Pakistan; $735 million to continue dangerous drug meddling in South America; $150 million for development in Gaza, in addition to the millions we already give the Palestinians every year; $110 million for the Middle East Partnership Initiative, ostensibly for economic development, although the recipient nations include oil-rich Kuwait and Saudi Arabia. Why in the world are American taxpayers giving welfare to OPEC governments? Over $500 million for various republics in the former Soviet Union. Even as those nations spawn millionaires and even billionaires, Americans are expected to provide welfare for their poor. $95 million in new money for the United Nations Democracy Fund, which meddles with foreign governments but never seems to change them; $34 million for the pro-abortion United Nations Population Fund, which lectures poor people about having too many children; $440 million for international population planning; $80 million for the dubious Global Environment Facility, run by the World Bank to fund anti-capitalist environmental projects around the world. Constitutionally, of course, none of this spending is authorized. But there also is a strong moral case to be made against taking money from Americans and giving it to foreign governments. Foreign aid doesn’t help poor people; it helps foreign elites and US corporations who obtain the contracts doled out by those foreign elites.
Everyone in Washington knows this, but the same lofty rhetoric is used over and over to sell foreign aid programs. Corporate welfare is bad enough, but corporate welfare in the guise of helping poor foreigners is indecent. In many cases, foreign aid money simply distorts foreign economies and props up bad governments. In countries that pursue harmful economic policies, an infusion of US cash only exacerbates and prolongs problems. No amount of money can help nations that reject property rights, free markets, and the rule of law. Since American foreign aid programs began in earnest decades ago, tens of billions of US tax dollars have been given to nations around the globe. The utter failure of this money to change things for the better in those nations is no longer in question; even the most earnest advocates deep down must admit the obvious. Most of the recipient nations remain endlessly mired in poverty, political and legal corruption, and cultural malaise. A rational person would argue that failed aid programs should be eliminated. In Washington, however, failed programs get more money thrown at them. The American public deserves to know why there is room in the budget for foreign aid, when taxpayers face record deficits and debt at home.
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Posted in Debt, Ron Paul's Writings, Texas Straight Talk | Tagged Foreign Aid |
By RonPaul.com on October 31, 2005
by Ron Paul
Many Americans understandably are upset with the sharp spike in gas prices since Hurricane Katrina hit the gulf coast in August, and are concerned by reports of oil company profits. But we must understand that high oil prices are not the result of an unregulated free market. On the contrary, the oil industry is among the most regulated and most subsidized of U.S. industries. Perhaps we need to ask ourselves whether too much government involvement in the oil markets, rather than too little regulation, has kept the supply of refined gasoline artificially low.
Consider Marathon Oil, which operates a refinery in Texas City. Marathon recently announced the construction of new refinery that will bring several hundred thousand barrels of oil online every day- which is exactly what the nation needs. But building a new refinery is a daunting task that requires billions of dollars in capital investment. The process of obtaining federal permits alone can take several years. As a result, we won’t see a drop of refined gasoline from the new Marathon facility until 2009. Federal subsidies and regulations are largely responsible for limiting the supply of refined gasoline in this country. The demand for gasoline has risen dramatically in America due to population growth in recent decades, but virtually no new refining capacity has been added. Basic economics tells us that rising demand and a fixed supply will lead to higher prices. No amount of congressional grandstanding about price gouging will change this economic reality. We must increase domestic exploration, drilling, and refining if we hope to maintain reasonable gas prices. We need more competition, which means we need less government. Most Americans agree that the American economy should not be dependent upon Middle East oil.
Economist George Reisman, however, explains that our own domestic regulations make us slaves to OPEC: “Today, it is possible once again to bring about a dramatic fall in the price of oil- indeed, one even larger than occurred in the 1980s. And it could begin right away. All that is necessary is to abolish the U.S. government’s restrictions on domestic energy production inspired by the environmentalist movement.” Reisman also explains how abolishing restrictions on coal production, natural gas production, and nuclear power would further reduce the OPEC stranglehold. By increasing the supply of these other energy sources, demand for oil would decrease and prices would drop. Note that much of the support for unrealistic environmental regulations comes from northeastern politicians and media, who weren’t nearly as interested in oil fortunes when the business hit rock bottom in the 1980s.
Texas and the gulf coast have always been willing to supply the nation’s energy, and it’s a bit disingenuous to hear criticism from those who are happy to use oil but don’t want refineries in their backyards. Oil is critical, but it is not a magic commodity that somehow is immune from the laws of economics. In fact, it is precisely because oil is so critical to our economy that we must allow the free market to deliver it. Absent government interference in the oil markets, gas prices would rise or fall according to concrete realities affecting supply and demand. High prices would encourage conservation better than any environmental regulations. Entrepreneurs would race to develop viable alternate fuels if gas prices rose too much. Centralized government planning, on the other hand, cannot solve our energy dilemmas. The Nixon-era price controls on gasoline in the 1970s produced nothing but disastrous shortages. By contrast, the Reagan administration’s immediate deregulation of the oil industry resulted in an unprecedented boom in oil production and a dramatic reduction in prices. This is the lesson we must remember. What can Congress do to provide Americans with some relief at the pump?
First it can suspend federal gas taxes, which would save consumers nearly 20 cents per gallon. In the long term, Congress must pass legislation like HR 4004, which I introduced earlier this month. HR 4004 takes a comprehensive approach by allowing offshore drilling, eliminating regulations that restrict refining, and suspending harmful tax rules that discourage domestic oil production. If we hope to have a stable, affordable supply of gas, we must allow the free market to operate.
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Posted in Ron Paul's Writings, Texas Straight Talk | Tagged Gas |
By RonPaul.com on October 24, 2005
by Ron Paul
Just two years ago, Congress was poised to eliminate the hated estate tax permanently. Today, however, several U.S. Senators are using their own wasteful spending habits to justify retaining the tax. In the eyes of these Senators, budget deficits are never the result of too much spending, but rather too little taxing. They cannot imagine giving up even the tiny fraction of federal revenues raised by the estate tax. Why is a one percent revenue cut unthinkable to these lawmakers, while annual three or five percent spending increases are considered business as usual?
To answer this question, look no further than the transportation bill passed last week in the Senate. It is perhaps the most pork-filled, wasteful appropriations bill passed in years. The bottom line is that spending money is what keeps these Senators in office. They won’t stop pork spending because the American voting public rewards them for it. The estate tax, more accurately known as the death tax because it is levied when a taxpayer dies, confiscates anywhere from 37% to 55% of a individual’s assets. While these rates are unconscionable, the death tax also represents an especially galling form of double taxation. Americans already pay federal and state income taxes throughout their working lives.
They pay income and capital gains taxes on money they save and invest. They pay local property taxes on their homes. They pay various sales taxes whenever they buy something. They even pay steep federal taxes on gasoline and telephone use. Yet after a lifetime of burdensome taxes, the death tax punishes Americans one last time simply because they worked hard, saved, and invested to pass something on to their families. In 2001 the House debated an outright repeal of the estate tax. Political considerations– based on the false argument that the estate tax only applies to some imagined class of dynastic families– prevented the passage of an immediate repeal. Instead, a slow ten-year phaseout bill passed in both the House and Senate chambers. Incredibly, however, the Senate added a provision that would cause the tax rules to revert back to the current system after the ten-year period. In other words, the death tax will return after 2011!
So a taxpayer dying in 2010 would pay no estate tax, while his unfortunate neighbor dying the next year would get a whopping bill from the IRS. Accountants and tax attorneys might support this crazy system, but it creates an estate planning nightmare for American families. Some doctors even warn it could give elderly people a morbid incentive to time their deaths out of concern for their loved ones. The tired argument that the estate tax only affects the rich simply is false. Many of my constituents are farmers, ranchers, and small business owners. They are hardly rich, but some of them have built up valuable businesses they would like to pass on to their children. Yet when they die, their children rarely have the liquid cash needed to pay the death tax bill. Often the business must be sold or divided to raise money for the IRS. Many family farms across this country have been bought by large corporations because of the estate tax. Ultimately, the argument against the death tax is a moral one.
People should not be punished for working hard, saving, and building wealth. Our society should respect the most basic property right, namely the right to dispose of one’s property as one chooses. The American dream is based on making a better life for one’s children, despite the empty rhetoric of the class-warfare politicians in Washington. Building wealth is not sinister, it is admirable. Our tax rules should encourage the decidedly American virtue of saving for the future.
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Posted in Ron Paul's Writings, Tax Freedom, Texas Straight Talk | Tagged Death Tax, Estate Tax |
By RonPaul.com on October 17, 2005
by Ron Paul
The president’s advisory panel on tax reform held a public meeting last week to discuss possible changes to our tax code, which most Americans view as a disgrace. Unfortunately, the reform panel consists almost entirely of Washington beltway insiders who have absolutely nothing in common with ordinary American taxpayers. The members are former Congressmen and Senators, DC think tank scholars, university professors, and– unbelievably– a former commissioner of the IRS! It’s hard to imagine someone more opposed to taxpayer interests than the head of the IRS, the very agency that millions of Americans want abolished. It’s doubtful that former politicians and tax bureaucrats will propose meaningful tax reform.
After all, we’ve heard this song before. Remember the big tax reform bills of 1986, 1997, and 2001? We were promised a simpler tax code each time, but it never happened. Some slight progress has been made in terms of very modest rate reductions and a slow phaseout of the estate tax, but even those changes may be reversed by revenue-hungry future congresses. The reform panel should have two simple goals: make taxes lower, and make taxes simpler. Anything else quite frankly is insulting to the American public. But during several hours of discussion last week, the various panelists talked about everything but those two objectives. Instead they embraced the practice of using the tax code as a tool for social engineering, debating what exemptions, credits, and deductions should be tinkered with to steer taxpayers toward or away from certain activities.
The panelists also misused the term “tax subsidy” over and over. A true subsidy is very simple: certain individuals or businesses receive taxpayer money from the government. But the panel members clearly have accepted the thoroughly leftist idea that all income belongs to the state, and therefore the state “subsidizes” you by letting you keep some of the money you earned. This is nonsense. If the government uses tax dollars to build you a house, you have received a subsidy. Taxpayers have given you something. But if you pay less in income taxes because of the mortgage interest deduction, you have not been “subsidized” by anyone. The government has not given you something; it simply has taken less. What kind of tax reform proposals can we expect from people who can’t understand the fundamental difference between a subsidy and a tax cut? When it comes to actual tax reform legislation in Congress, don’t underestimate the lobbying influence of accountants, tax attorneys, tax preparers, IRS employees, and mortgage companies, just to name a few.
Many, many groups and industries benefit from our Byzantine tax system in one way or another. They will not accept major changes to the tax code without a fight. True tax reform is as simple as cutting or eliminating taxes. No studies, panels, committees, or hearings are needed. When reform proposals seem complicated, they almost certainly don’t cut taxes. Government spending is the problem! When the federal government takes $2.5 trillion dollars out of the legitimate private economy in a single year, whether through taxes or borrowing, spending clearly is out of control. Deficit spending creates a de facto tax hike, because deficits can be repaid only by future tax increases. By this measure Congress and the president have raised taxes dramatically over the past few years, despite the tax-cutting rhetoric. The real issue is total spending by government, not tax reform.
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Posted in Ron Paul's Writings, Tax Freedom, Texas Straight Talk | Tagged IRS, Tax Code |
By RonPaul.com on October 10, 2005
by Ron Paul
The nomination of White House lawyer Harriet Miers to the Supreme Court has raised questions about her qualifications and political ideology. Conservatives and liberals alike fear that Ms. Miers will not represent their views, and will rule on issues in ways that harm our nation. But clearly we are not asking the right questions about Supreme Court nominees. The issue is not how candidates intend to wield judicial power, but rather whether they understand that the Constitution imposes limits on that power in the first place. We are guilty of permitting our federal courts to become politicized, when the proper role of those courts is to protect us from the very abuses that arise from politics.
Instead of viewing federal judicial nominees as liberals or conservatives, we ought to be viewing them as activists or originalists. Judicial activism is a popular and often misused term in politics today, but if we define it properly we can better understand the problem with our courts. Judicial activism is the practice of judges legislating from the bench, by interpreting law in a manner that creates an outcome to fit their political views. But judicial activism is more than this. Activist federal judges not only craft laws, they also ignore the laws in place– particularly the enumerated powers listed in Article I of the Constitution and underscored by the 9th and 10th amendments. By ignoring the strict constitutional limits placed on the federal government and bulldozing states’ rights, federal judges opened the door to the growth of wildly extra-constitutional government in the 20th century. Activist courts enable activist government. The bitterness and controversy that often surround the nomination of Supreme Court justices in recent decades makes perfect sense when we consider the lawmaking and lawbreaking power that activist federal courts possess.
Federal courts in general, and the Supreme Court in particular, have long since ceased serving as referees who guard against government overreaching. Instead they have become unelected, unaccountable purveyors of social policy for the entire nation. Bitter partisan fights over Supreme Court nominees are inevitable simply because so much is at stake. How did this come to pass? Unfortunately, our nation has embraced the flawed notion that only scholars, judges, or attorneys are qualified to understand and interpret the Constitution. We have come to accept that constitutional law must be revealed to us from on high by our black-robed masters. Yet nothing could be further from the ideal of constitutional jurisprudence envisioned by our founders. The Constitution is written in plain, forthright text, and there is nothing mystical about it. It simply establishes a system of shared, limited power between the three branches of the federal government, while reserving most government power to the states themselves.
It seems that schoolchildren once knew far more about the Constitution than many adults do today. Yet we cannot hold intelligent opinions about Supreme Court nominees unless we understand this basic constitutional framework. It is therefore incumbent upon every American to read the text of the Constitution, study the history of its drafting and ratification, and consider whether federal judicial nominees will properly abide by their originally intended roles. The Constitution above all is a document that limits the power of the federal government. The fundamental point that has been lost in our national discourse is this: the Constitution prohibits the federal government, including the federal judiciary, from doing all kind of things. Until we have federal judges who understand this, it matters little what political stripes or experience they bring to the bench. The Constitution does not empower government and grant rights, it restricts government in order to safeguard preexisting rights. When federal courts disregard this principle, acting as legislatures or failing to enforce constitutional limitations, we get the worst kind of unaccountable government.
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Posted in Ron Paul's Writings, Texas Straight Talk | Tagged Harriet Miers, Supreme Court |
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