May 21st, 1997
Mr. PAUL. Mr. Speaker, I rise to make some comments about the Marshall plan because my interpretation is somewhat different than the conventional wisdom of the past 50 years.
I happen to believe the understanding of the Marshall plan is probably one of the most misunderstood economics events of the 20th century. The benefits are grossly overstated. The Marshall plan through these many years has been used as the moral justification for all additional foreign aid. And once I hear it, I assume we are on the verge of extending and expanding our foreign aid overseas.
When we look at the total amount of money that flowed into Europe following World War II, the amount that came from the American taxpayers was not large. The large amount came from corporations and investors who believed that Europe would be safe and secure, so the large number of dollars then flowed into Europe.
It was interesting that the conditions were improved in Europe not so much because of America but sometimes in spite of America, because many of our economists went to Europe at this time and advised them that the most important thing that they do, especially in Germany, was to maintain price controls. Here in this country we did not learn, and hopefully we have finally learned the lesson, but we had not learned until at least 1971 that wage and price controls were not a good idea.
Yet Ludwig Erhard at that time defied the strong advice by the American advisers and took off wage and price controls, kept taxes low, kept regulations low, produced political conditions which were very conducive to investment, and this is what caused the real recovery in Europe.
Political assistance, funds flowing into a country through political maneuvers, are never superior to those funds that flow into a country for reasons of the political stability. Because Europe did invite capital, this was the real reason why Europe recovered.
Foreign aid is used frequently throughout the world to help people. But if we look at Zaire and Rwanda and the many countries of the world, foreign aid has really been a gross failure. As a matter of fact, it does harm because it encourages the status quo. The market is much smarter than we as politicians, because if the market and the political conditions are not right, that country that wants capital must improve those conditions to invite the capital. A good example might be in Vietnam at the current time. They changed their conditions to invite capital. So there must be an incentive for those countries to change their condition.
Foreign aid very often and very accurately, I believe, is a condition of taking money from the poor people in a rich country and giving it to the rich people of a poor country. I think there is a lot of truth to that, because the burden of taxation and inflation and the many things that our average citizen and our middle-class citizen suffer comes from overexpenditures and good intentions whether they are here at home or overseas. We believed at that time, and strongly so, I guess, still, that the government’s responsibility, whether it is through government expenditures or through the inflationary machinery of the Federal Reserve, that if we stimulate an economy, if we prime the pump, so to speak, that we can stimulate the economy. This was the argument after World War II, that we would prime the pump. That is not a free market notion, that is a Keynesian notion. There has been no proof that this is beneficial. Really what counts is a sound currency. Germany after World War II and even to this date is known to have a harder and sounder currency than any other currency in Europe. Political stability is what is necessary, not taking money from taxpayers of one country and shifting it to another one.
Foreign aid very often, not so much the foreign aid that went to Europe, and I would grant my colleagues, the other conditions compensated and did not allow the foreign aid to be damaging so much as the foreign aid, say, to a country like Rwanda. That was so destabilizing, because the politicians get hold of the money and they use it for political reasons. Money to help a country must go in because conditions are beneficial, that encourage investment, that encourage the market to work.
Mr. Speaker, I would argue that there is a different interpretation, but I know that the support for this measure is justified.
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May 21st, 1997
Mr. PAUL. Mr. Speaker, I rise in opposition to H.R. 1377, the Savings are Vital to Everyone’s Retirement Act [SAVER]. Although I applaud the good intentions of the sponsors of this bill, I must oppose H.R. 1377 for two reasons.
First, the proper level of savings should be determined by the free choices of individuals acting in the market. Saving should be a voluntary decision, undertaken because individuals value the greater future rate of return from saving over the value of present consumption not because the Government instructed them that they needed to save. We in Washington cannot judge what the correct level of savings is for any individual much less the entire country. I ask my colleagues, if this program increases the rate of savings beyond the level Congress considers necessary, will we then enact a ‘Spending is Vital’ bill to encourage greater consumption?
Second, and perhaps more importantly, H.R. 1377 ignores the primary reason Americans forgo savings: Government policies that discourage the American people from saving. Even creating a Department of Labor-run education program and spending a million dollars on a series of White House conferences will further reduce the rate of savings as payment for these new initiatives will come either from taxes paid directly by the American people or from inflating the currency to monetize the national debt, thus eroding American’s purchasing power. Either way, working Americans will be left with less funds available for saving.
I respectfully suggest that it is not the people who need a savings education. They especially do not need it from a government which, the recent claims of the leadership and the administration notwithstanding, cannot balance its own books. Rather, Congress needs to be educated on how the interventionist policies of this Government are eroding the people’s standard of living and making it nearly impossible for many Americans to save an adequate amount for their retirement, or any other vital needs, such as their children’s education.
Today, the average American pays more than 40 percent of this income in Federal, State, and local taxes. Thus, before the average American even has a chance to consider saving, a substantial portion of his paycheck is stripped from him in order to fund the welfare-warfare state. Federal tax policy further discourages savings through the exorbitant Federal taxes on capital gains, estates taxes, and the double taxation on corporate dividends.
Government policy further reduces incentives Americans have available for savings through the inflationary policies of the Federal Reserve, which erode the average consumer’s purchasing power. The average consumer must spend an ever-increasing share of his or her income purchasing necessities, meaning they have less income available to devote to savings. Today, prices are more than 15 times higher, in normal terms, than when the Federal Reserve was established.
This diminishing purchasing power also creates a disincentive to save. When one’s earnings will purchase more today than they will in the future, the rational action may very well be to spend the funds in the present. After all, who would trade a dollar’s worth of goods today for 50 cents worth of goods in 20 years?
Clearly, a major reason why the United States has a low rate of saving is the crushing tax burden imposed on the American people by the Government and the erosion of their purchasing power. Yet, rather than address how Government policy is destroying American’s ability to save, Congress is planning to spend more taxpayer money to educate the American people on the importance of saving.
Mr. Speaker, the American people neither need nor want Congress to spend another penny of their hard-earned tax dollars on educating them on the importance of savings, and they certainly do not need the Federal Government to spend a million dollars to create a conference on savings. Rather, Congress must cease all unconstitutional spending, cut taxes, and prohibit the Federal Reserve from debasing the currency.
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May 20th, 1997
Mr. PAUL. Mr. Speaker, I rise today to offer into the Record two record examples of the fine writing often found in one of district newspapers, The Brazosport Facts. While many find it easy to deride the press as liberal and closed to the notions of liberty, free markets, and constitutional principles, I am pleased to report that The Brazosport Facts in general, and these two authors in specific, seek to bring a fair, even balance to the coverage of news and ideas.
Today I enter into the Record an editorial written by Glenn Heath, a former executive editor of The Brazosport Facts and now a retired member of the community active yet active on the paper’s editorial board. Also, I enter into the Record a column written by Bill Sturdevant, a frequent contributor to the Facts.
Mr. Speaker, I strongly encourage my fellow Members of Congress to read these principled writings. I offer my congratulations and thanks to these two men for supporting the ideas of liberty; and to the entire staff of The Brazosport Facts for their ongoing dedication to presenting fair coverage of events and ideas.
A larger principle than the bill itself is involved. The principle applies to many human circumstances where a mandated gain entails a substantial loss.
For decades, a safety measure has been before the Legislature, either asking the state to require motorcycle riders to wear a protective helmet, or asking the state to repeal such a law. Riders have been in the gallery in force to oppose one or support the other.
This time it’s repeal. Sen. Jerry Patterson’s bill would relieve all motorcycle riders aged 21 or over of wearing the helmet. Legislators deleted a provision that they must carry added insurance if they did so.
The Senate is expected to vote on Patterson’s bill Thursday or Friday.
From a purely practical standpoint, the arguments for the original bill had merit. In case of an accident, the helmet would help protect against head injuries.
Even most riders would admit that motorcycles can be dangerous. In the best of road conditions, their speed capability is often abused; and on slick surfaces or loose surfacings they can be treacherous. In a crash with a four-wheel vehicle, the motorcycles always lose.
But motorcycles are designed as much for fun as for practical transportation. Even those who accept the helmet for its safety would agree that using one diminishes the pleasure of motorcycling.
More important, the helmet protects no one but the one wearing it. So the effect of the law is to force a person to do something entirely for personal safety.
That should be that person’s choice. No government should regulate an individual’s right to accept risks, and in doing so deprive that person of the freedom to enjoy a pleasure.
That doesn’t mean there should be no rules of highway safety. Faulty brakes threaten not just the driver of an auto, but every other vehicle on the road. Slick tires, malfunctioning lights endanger others. These are concerns of government.
But not air bags. These don’t prevent crashes and they don’t protect others on the road; they only tend to reduce the injuries to a driver and possibly a passenger after a crash.
When air bags were a prospective federal mandate, the estimated cost for each was about $300. Once they were in place, they were said to have saved 1,600 lives. For this to happen, tens of millions of motorists must pay the high cost of the devices.
And in a few cases, the air bags have actually killed people. New proposals would soften the impact, and would allow a motorist to have the air bag disabled. Then why shouldn’t the motorist be allowed to avoid the expense altogether?
These are only two examples. We need protection from the negligence of others, but there should be limits on how much government limits our freedom and pleasure in protecting us from ourselves.
Benjamin Franklin had words for it: ‘Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.’
(BY BILL STURDEVANT)
Rights are counterbalanced with responsibility; juxtaposed and eternally linked. In the United States of America, we have a government created by a group of individuals collectively called ‘the people,’ who are not only ‘endowed by their Creator with certain unalienable rights,’ those being ‘life, liberty and the pursuit of happiness,’ but also have the ‘equal right to the use of our own faculties, to the acquisitions of our own industry,’ and ‘to honor and confidence from our fellow-citizens, resulting not from birth, but from our actions and their sense of them.’ (Thomas Jefferson).
In short, we have the right to choose what is best for us. We have the right to pursue happiness as we define it, we have the right to keep the fruits of our labor that we earn in that pursuit, and we have the right to decide how to dispose of those rewards. At the same time, we must reconcile these rights with the responsibility of respecting the rights of others, and living with the consequences of our decisions and actions. If our country’s founding fathers had written a golden rule for our citizens, it would have read ‘Respect the God-given rights of others, while at the same time protecting your own rights.’
What bothers me is that there seem to be fewer and fewer people who understand and live by this golden rule. More and more often, people are turning to the federal government to secure the force necessary to take from others something that they are not by right entitled to. I may have the right to eat, but I don’t have the right to steal someone else’s food. I have the right to have children, but I don’t have the right to force someone else to pay for my child’s food, house, clothes or education. The decision is mine; it therefore follows that the responsibility is also mine. Many federal ‘entitlement’ programs, including Medicare, Medicaid and Social Security, are morally wrong because they require, by threat of force, that people give up part of what they earn so that it can be redistributed to someone who did not earn it.
But wait a minute, you say. All of the above mentioned federal programs were created by the will of the majority of Americans, and it is therefore our civic duty to contribute. My response to that is, ‘So what?’ My rights are not bestowed to me by government or by a majority of the electorate. They do not have the legitimate authority to force me to contribute to programs that are not enumerated in the Constitution. In too many cases in the history of mankind, the majority has used the power of government to enslave the minority, or at least create an unfair advantage for themselves.
Say that a congressman and a police officer were riding in a bus that was full of other passengers. On the bus was a ‘rich’ man, who had one dollar more than the others. The Congressman announced: ‘If you vote for me, I will use the government’s police power to take the dollar from the rich man, and redistribute it to you.’ A vote was held, and the majority of those on the bus decided the rich man should contribute his dollar for the good of all the rest. The policeman seized the dollar, and the congressman divided it up. He gave 25 cents to the policeman, 25 cents was given to the people on the bus, (which they immediately started fighting over), and he kept 50 cents for himself. It seemed that everyone, except the rich man, was happy, but were they right?
In his first inaugural address, Thomas Jefferson said of the ‘sacred principle’ of our federal government, ‘that though the will of the majority is in all cases to prevail, that will, to be rightful, must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression.’ It could be argued that it was wrong to take the dollar from the rich man because he could have used it to build a factory, employ everyone on the bus, and thus create wealth for all.
My point is that it doesn’t matter what you or I may think, the person who earns the money is the only one with the right to decide how to spend it, so long as doing so does not infringe on your or my legitimate rights. Jefferson continued by defining the ‘good government’ as being ‘wise and frugal, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.’
The next time a politician promises you an ‘entitlement,’ think about who he is going to rob to pay for it. Ask yourself if, by accepting it, you would have to abdicate your personal responsibility and therefore your freedom. Ask yourself if you are legitimately entitled to it because you earned it. If the government has the power to ‘take from Peter to pay Paul,’ what is to stop it from taking from both? Ask yourself why the politician isn’t battling to restore your lost liberty.
Please understand that I am not against charity. There are people who, through no fault of their own, need temporary assistance, and I believe we have a moral obligation to help them if we can. But to lose our freedom, in the name of ‘charity,’ by allowing confiscatory taxation of our money, really only benefits politicians and bureaucrats. This is not only dangerous, it is absurd.
Only by accepting our responsibility to honor the rights of others can we hope to protect our own rights. As Jefferson said, only by protecting our rights can we hope to ‘regain the road which alone leads to peace, liberty, and safety.’
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May 20th, 1997
Mr. PAUL. Mr. Speaker, I rise today in opposition to H.R. 1650. At the same time, I rise in total support of, and with complete respect for, the work of Mother Teresa, the Missionaries of Charity organization, and each of Mother Teresa’s Nobel Peace Prize-winning humanitarian efforts. I oppose the Gold Medal for Mother Teresa Act because appropriating $30,000 of taxpayer money is neither constitutional nor, in the spirit of Mother Teresa who dedicated here entire life to voluntary, charitable work, particularly humanitarian.
Because of my continuing and uncompromising opposition to appropriations not authorized within the enumerated powers of the Constitution, several of my colleagues found it amusing to question me personally as to whether, on this issue, I would maintain my resolve and commitment of the Constitution–a Constitution, which only months ago, each Member of Congress, swore to uphold. In each of these instances, I offered to do a little more than uphold my constitutional oath.
In fact, as a means of demonstrating my personal regard and enthusiasm for the work of Mother Teresa, I invited each of these colleagues to match my private, personal contribution of $100 which, if accepted by the 435 Members of the House of Representatives, would more than satisfy the $30,000 cost necessary to mint and award a gold medal to the well-deserving Mother Teresa. To me, it seemed a particularly good opportunity to demonstrate one’s genuine convictions by spending one’s own money rather than that of the taxpayers who remain free to contribute, at their own discretion, to the work of Mother Teresa and have consistently done so. For the record, not a single Representative who solicited my support for spending taxpayer’s money, was willing to contribute their own money to demonstrate the courage of their so-called convictions and generosity.
It is, of course, very easy to be generous with other people’s money.
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May 16th, 1997
Mr. PAUL. Mr. Chairman, I move to strike the last word.
Mr. Chairman, this bill is an attempt to improve the Federal jobs training program. We now have over 700 different programs, and quite literally, it is a mess. This bill is a well-intentioned piece of legislation that does make some token changes and some improvement. They may work, they may not.
I would like to address another subject, which is, should we be involved at all? If we have tried it for 30 years and it is not working, when will we ask ourselves, should we be in the business of job training? Quite frankly, I am not very confident that we here in the Congress are smart enough to do it.
Always the argument is that if this is a slightly better approach to last year’s approach, this is a movement in the right direction. But some day we have to ask the question whether or not endorsing the same philosophic principle of a bad program is really going to solve our problems. We have no evidence that this approach will work. Most likely this will become just a bureaucratic adjustment. There will be a cost in the adjustment, but ultimately Government will once again fail in its attempt to do something that it was not designed to do. This idea of local control and block grants is something that sounds good, it sounds like they are moving in the right direction, but the odds of it really benefiting are very, very slim.
Government really is not smart enough to do what is intended in a program like job training. We are not, here in the Congress, smart enough to know what the future is and to make business decisions. It is rather sad to see our business leaders advocating a piece of legislation like this, rather than them understanding and resorting to the market to decide when and how to train workers.
Instead, they use their energies to come and transfer funds from one group to another in the pretense that they are able, in partnership with the Government, to design a program that will fit the marketplace. There is no sign, there is no evidence that a program like this has been permitted under the Constitution. But better yet, under today’s circumstances, and eventually this will prevail, do we really have the funds to do something that is not working? The funds are not there, and any time we deal with a program like this, we have to think that it is a contribution to the high deficits that we are running.
Mr. Chairman, H.R. 1385 is flawed in that it endorses the very same principles that have been used for 30 years, arguing that the Federal Government and government bureaucrats know more than what the market knows.
I would like to list a few mandates of the bill. No. 1, it mandates that States submit a 35-year plan for adult job training and literacy on the approval of the Secretaries of Education and Labor. It mandates that States establish local work force development boards whose functions and composition are determined by Federal law.
It mandates that the local work force board meet Federal core indicators. It mandates that local work force boards be dominated by representatives of the business community. That does not give me a whole lot of encouragement, another step toward replacing the free enterprise system with corporatism.
If Members like mandates, they certainly will be pleased with this piece of legislation. It spends taxpayers’ dollars, the victims, for skill upgrading for incumbent workers. Those who are still working are required to pay for those who think they are going to get trained, thus creating a new entitlement program for already-employed workers.
It spends taxpayers’ dollars on grants to business and unions for demonstration projects. It spends taxpayers’ dollars on family literacy services. It spends taxpayers’ dollars on the National Institute for Literacy, the type of bureaucracy this Congress should be shutting down, not expanding. It spends taxpayers’ dollars on job training services which the business community and individual workers should be paying for themselves.
Incidentally, Mr. Chairman, and I know this would be of the least amount of interest to so many here, but the truth of the matter is, Congress has no constitutional authority to mandate or operate any job training programs.
Mr. HYDE. Mr. Chairman, will the gentleman yield?
Mr. PAUL. I yield to the gentleman from Illinois.
Mr. HYDE. Mr. Chairman, I thank the gentleman for yielding to me. I wanted to associate myself with the thrust of his remarks. I may feel a little more benignly toward the uses of government than he, but essentially his critique of this bill I share.
(Responding to Congressman Paul:)
Mr. SOUDER. Mr. Chairman, : I wanted to respond to two of my good friends, first my distinguished colleague, the gentleman from Texas [ Mr. Paul]. He is one of the most consistent Members I have ever met in Congress. As a Libertarian he does not believe in Federal job training or most Federal anything, and in that he has been consistent and logical. I appreciate that, and I support him and vote with him most of the time. But I am not a Libertarian and so sometimes we are going to disagree:
Mr. RIGGS. Mr. Chairman, : I know that we are anxious to conclude the debate, but I simply could not allow, in good conscience, the gentleman from Illinois [Mr. Hyde] and the gentleman from Texas [Mr. Paul] to mischaracterize this bill.
Let me preface my remarks by saying that the gentleman from Illinois has a very well-deserved reputation for being one of the most respected, even revered Members of Congress, and the gentleman from Texas, as the gentleman from Indiana [Mr. Souder], pointed out, has been absolutely consistent and constant in his views both as a private citizen and as a political leader in the country . :
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May 16th, 1997
Mr. PAUL. Mr. Speaker, it is safe to say that we now live in what we call a command society, we do not live in a free society where social and economic problems are solved through voluntary and free market solution. Whether it is food for the poor, homes for the homeless, medical care for the sick, we endlessly call on the Government to use force to redistribute wealth and distribute our production of welfare, with total disregard for the conditions required to produce the wealth.
In this misdirected humanitarianism, great harm is done to the very people who are supposed to be helped, both the recipients, as they are forced into a degrading dependency, and the working poor, who bear the greatest tax and inflation burden. In a command society, the Government continuously says, do this, do that, and we obediently do it. But smoldering anger and resentment results, confusion arises, because all the Government does is supposed to be good and helpful.
We are endlessly forced to get licenses for all that we do. Rules and regulations are all around us, from morning till night, cradle to grave. We tax life, we tax death, we tax success, and we tax savings. We suffer from double and triple taxation. Taxes are everywhere, as we work half the time for our Government.
We meet Government regulations and rules and paperwork everywhere we go. We cannot walk, talk, pray, or own a gun without a Government permit. We cannot drive a car without bells and buzzers and horns and belts and bags, without being reminded that Big Brother is watching, just waiting for one misstep, while the rapists and murderers go unpunished. We are intimidated by political correctness to the point that an innocent joke is a crime and the laws are a joke.
Our businesses are subject to invasion at will by Government bureaucracy without warning, pretending to save us from ourselves, while destroying our freedoms. As the bureaucracy thrives, the command society expands.
I see no evidence, sadly, of a reversal of this trend. We continue to tinker with the bureaucracy through disbursement and talk of great benefits of block grants and local controls and never talk of the philosophic or moral principles that permit the command society; that is, the concession that the arbitrary use of force to mold personal behavior in the market in our entire society is permissible.
Without change in our philosophic approach to government, we will find all the adjustments and revamping of the command society will not and cannot succeed. It cannot change the course upon which this Nation is set.
Placing confidence in pseudo-reform does great harm by postponing the day we seriously consider the moral principles upon which a free society is built. I am anxiously waiting for that day.
Mr. Speaker, at this time I enter into the Record this recent commentary by one of America’s leading television newsmen, Hugh Downs. During his May 10, 1997, radio program ‘Perspective,’ this commentary was broadcast, making many of the same points I have made today.
BATF’s in the Belfry
(BY HUGH DOWNS)
Not too long ago, the California State Legislature passed a law permitting women to breast feed their children in public. Legislators felt obliged to pass a law about this despite the fact that courts have already upheld the practice. Also breast feeding has long been recommended to women by their physicians as the feeding method of choice. And quite aside from the legal precedent and the medical advantage, breast feeding is the natural way to feed infants; obviously women are equipped to serve sustenance to their offspring this way and it is the safest way to nourish an infant. So why would we need a law to state the obvious?
A law permitting public breast feeding is part of a tradition of inane legal redundancies generated by America’s criminal justice empire.
I say empire because legislators, by nature, think they possess, like Roman Caesars, the imperium, as if the laws they pass somehow wield supreme power over the universe. For example, in the past, legislators in Arkansas prohibited the river in Little Rock to swell any higher than the bridge. That’s right, the river, by law, was ‘commanded’ not to flood. Wasn’t that wonderful? This inane and redundant bit of arrogance reminds me of Canute, the ancient Danish King of England. Canute put his throne on the beach and commanded the sea to retreat. You will not be surprised to hear that the sea dragged Canute, throne and all, to a watery embarrassment. Legislators, from Canute to Congress, can imagine themselves as imperium, because the power to create law seems as if it should include the laws of nature, or the laws of the universe, or let’s be honest about it, the laws of the Almighty.
I’ve also heard that, in the past, legislators once passed a law that forbade chickens to lay eggs before 8 o’clock in the morning and no later than 4 o’clock in the afternoon. I’m told this law is, or at least was, on the books in Norfolk, Virginia. Legislators commanded chickens, under penalty of law, only to lay eggs between the daylight hours of 8 and 4. (If you’re looking for ‘bird brains’ here, you could have trouble figuring out which species had more of them.) I wonder what the penalty was for laying eggs after 4 o’clock? Maybe criminal chickens were threatened with being ‘cooped up.’
To be fair, a lot of stupid laws are just old laws that may have seemed liked a good idea at the time but now seem quaint. When automobiles first appeared around the turn of the century, legislators rushed laws to regulate them. Since early automobiles made enough noise to spook a horse, several states passed laws that required runners to precede automobiles so that horse riders and buggy drivers could be forewarned of the approaching menace. I can only imagine what modern Interstate highways would look like if such laws were enforced today. I heard that in Pennsylvania somewhere, there is still a law requiring motorists to pull over at the sight of a team of horses and cover the vehicle with a cloth that has been painted to match the local foliage. I looked in my trunk the other day and noticed that I don’t carry a camouflage cover. I hope I never need one in Pennsylvania.
Many old laws seem dumb and dumber today, and are innocently amusing. Who cares if it’s against the law in Grand Haven, Michigan to toss an abandoned hoop skirt in the street? It may have happened in the 1860′s but it’ll never happen today because women don’t wear hoop skirts anymore. In addition to antiquated laws, some laws can be ludicrous prohibitions that deal with situations that are patently obvious. Is it really true that someone passed a law in Alabama prohibiting motorists from operating a motor vehicle while blind folded? What was in their beverages? And what about that Florida law prohibiting sex with a porcupine? I’m not kidding. This is supposed to be a real law. What were these lawmakers thinking? At least sex with a porcupine must be one crime with a very low rate of recidivism.
Obviously, hubris can propel legislators well beyond the asinine to the really dangerous. America’s burgeoning criminal justice empire doesn’t just churn out useless laws, it also creates unnecessary law enforcement agencies–whole police forces that we don’t need. We don’t need them because we already have local police departments. The DEA, or Drug Enforcement Agency is anything but local. The DEA performs a job that used to be done by the War Department during World War II. The DEA sends American GI’s into foreign countries and wages war. Prosecution of a drug war sounds like a policy hatched by Dumb and Dumber. Without a war there would be no need for the DEA, or its staggering budget.
Of course, the DEA does not police alcohol and tobacco. We have a completely separate police force (the Dumber half of this duo) just to deal with cigarettes and liquor. The BATF, or Bureau of Alcohol, Tobacco and Firearms, is what you might call an ‘offbeat’ police force. The name itself is off the wall?
You might wonder why we need a completely separate organization to police things that are all legal, especially when local police already do that. Local police have been doing it for centuries in America. But lawmakers, anxious to serve in the drug war, decided that extra federal agencies were needed too. We may have too many laws and too many agencies. After the catastrophes at Waco and Ruby Ridge, the BATF came under Congressional scrutiny as an unnecessary organization that sometimes over-steps its bounds.
When they’re not being investigated by Congress, the BATF is tracking down dangerous criminals and keeping America safe. For example, America was recently threatened by a naked angel–that’s right a naked angel–and the BATF fought valiantly to repel her. They lost. Kermit Lynch, a wine merchant in northern California, reports that he tried to import some Chianti wine that had a naked angel on the label. The BATF pounced. Agents told Lynch that pictures of naked ladies on containers of alcohol are forbidden. So Kermit Lynch looked up the law. He discovered that pictures of women in the all together are permissible on containers of alcohol if the pictures are art. The BATF had to backtrack when Mr. Lynch demonstrated that the picture wasn’t really a naked woman, it was really an artistic nude from a 13th century tapestry.
A stunned Kermit Lynch says ‘The BATF is in the business of judging art. Can you believe it?’ In an interview, Mr. Lynch told reporter Paul Kilduff that the Kenwood winery in Sonoma County, California hired artist David Goines to do a label. When Mr. Goines came up with a naked woman standing in a vineyard, the BATF pounced again. So, a now angry Mr. Goines submitted a new label with the skeleton of a woman standing in a vineyard. You guessed it. The BATF approved that one.
How many useless laws and useless police agencies do we really need? Surely, we should throw out what we don’t need and keep what we do. Like the law that I’m told exists in Tennessee, that prohibits shooting game animals from moving vehicles. The law has one exception: whales. It’s legal to shoot whales in Tennessee from a moving vehicle. Now there’s a law that we need.
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May 16th, 1997
Mr. PAUL. Mr. Speaker, we have just finished the debate on the jobs programs bill, and in the discussion I was referred to as a libertarian, but a very consistent one that voted the same way on each type of legislation.
I would like to remind my colleagues that voting for libertarianism is voting for liberty. Also it is a very consistent vote with the doctrine of enumerated powers. It is said in the Constitution that we can only do here in the Congress which is enumerated by the clauses within the document. So therefore, if it is said that I am very consistent and want to be labeled as libertarian, that is one thing, I do not deny that. But in the other sense, I am a strict constitutionalist that obeys and listens very carefully to my pledge to the Constitution as well as paying close attention to the ninth and tenth amendment.
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May 16th, 1997
After 30 years of Federal Government involvement and two major legislative overhauls, there are now over 160 Federal programs dedicated to job training. The Federal Government has spent approximately $4.5 billion just on the Job Training and Partnership Act of 1997. However, the U.S. Congress cannot measure whether or not they are getting a good return on their investment since both Federal agencies do not even know if their programs are helping people find jobs.
The very idea that a government board can somehow determine what occupations will be in demand at any point in the future is an example of what Nobel Laureate Friedrich Hayek calls “The Fatal Conceit.” No central board, even one dominated by local officials and businessmen, can predict which jobs will be in demand in 5, 10, or 15 years. It is doubtful that a local work force board in Silicon Valley in 1978 would have tried to link job training services to personal computer markets. In fact, it is highly unlikely that Steve Jobs will be appointed to the work force development board. The very fact that the boards are compiled of already established leaders for business practically ensures that the entrepreneurs creating the jobs of the future will not be represented on the board.
In this high-technology information age where financial and, more importantly, intellectual capital can travel around the world in a matter of seconds, the jobs in demand in any area can change faster than any geographical local work force board could conceivably update the skills with which to link job training.
The private actions of individual citizens working together in a free market can best build a job training system that meets the needs of its citizens. Private individuals, local communities, and State governments are also more capable than the Federal Government of providing adequate help to those unable to provide training for themselves.
If the Federal Government returns to constitutional size and reduces the tax and regulatory burden on the American citizen, Federal job training programs of any sort furthers the destructive idea that the proper role of the Federal Government is to provide for all the needs of the citizens. The belief that Congress has a moral duty to administer to the health and welfare of the populace, both of America and the world, is directly responsible for the growth of the welfare state, which threatens to destroy America’s economic prosperity and liberty itself.
I am strongly opposed to this legislation, and believe freedom and free choices and the marketplace and the Constitution is a much better approach.
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May 15th, 1997
Mr. PAUL. Mr. Chairman, I rise in opposition to the automatic continuing resolution amendment to H.R. 1469, the so-called Supplemental Appropriations for Fiscal Year 1997.
Nestled within all the rhetoric and debate surrounding H.R. 1469, the Supplemental Appropriations for Fiscal Year 1997, is an amendment offered to fund national government operations throughout Fiscal Year 1998. Funding that is, at 100 percent of the current level of overspending. This amendment abdicates the responsibility of Congress to legislate and appropriate; that for which Congress was elected by citizens of this country. Rather than accepting the responsibility and corresponding accountability to constituents for voting in favor of or against particular appropriations, this amendment allows Congress, in the name of strategizing against the President and averting blame for a government shutdown, to approve in an autopilot-type approach, Federal spending through the end of fiscal year 1998.
This strategy sets a dangerous precedent of bypassing the constitutional checks on governmental powers by minimizing the separate roles of the executive and legislative branches. Rather than a Presidential veto on congressional appropriations–thus demanding a new consensus between the Congress and the Executive–the veto power of the President becomes merely the power to continue funding at a level already burgeoning with spending on constitutionally suspect programs. Once again, Congress grants to the executive branch, powers never intended by the Constitution.
The amendment also introduces a dangerous ratchet-up feature in Federal Government spending. For should this precedent be later followed and should Congress ever decide to make amends for its habit of spending beyond its means, the Presidential veto power then becomes a tool by which the President can ignore the will of Congress absent a two-thirds majority to override the veto. Recent history suggests that Congress is rather unlikely to decrease its spending and this certainly would be much more unlikely in the event a two-thirds majority is required.
For these reasons and others, I oppose abdication of congressional responsibility, putting the Federal Government appropriation process on autopilot, and, therefore, approval of the automatic continuing resolution amendment to H.R. 1469.
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May 14th, 1997
Mr. PAUL. Mr. Chairman, we, the Congress, are once again asked to reenact Federal housing legislation that is unconstitutionally, philosophically, economically, and practically unsound.
Prior to the Constitution-circumventing New Deal policies of the Fed-induced Depression era, such redistributionist policies whereby Government takes money from one citizen to pay the housing costs–or some other cost–of another was forbidden. Supreme Court Justice Samuel Chase, in Calder v. Bull , opined that ‘a law that takes property from A and gives it to B: It is against all reason and justice, for a people to intrust a legislature with such powers.’ Yet, this redistributionary scheme, rather than the exception, has become the rule as well as the rule of law in this 20th century, special interest state.
But even setting aside the unconstitutionality of Government’s 20th century housing policy for the moment, such redistributionary schemes are philosophically bankrupt as well. A right to housing, as espoused by proponents of this legislation, or a right to more than the fruits of one’s own labor, by definition must deprive some other the right to keep the fruit of his or her own labor. Moreover, such a right cannot be a right as it is not enjoyable by all simultaneously. For if each is entitled by right to more than the fruit of one’s own labor, one must then ask from where this additional production will come. It is this fallacy that prompted Frederic Bastiat, the brilliant 18th century political-economist to remark: ‘The State is the great fictitious entity by which everyone seeks to live at the expense of everyone else.’ Bastiat understood that Government was an agreement entered into for the purpose of protecting one’s own property rather than the tool by which individuals could collectively band together to deprive others of theirs.
The problems with Government housing extends even beyond these not-so-insignificant barriers. The economic and practical aspects of such a policy warrant serious scrutiny as well. One must not forget that individuals respond to incentives and incremental measures moving this country further in the wrong policy direction must be actively opposed.
There are those in this Congress who concede that there are serious problems with our Federal housing policy but argue that we must reform it to correct these problems. By incrementally moving in the right direction we can look out for those affected–not just the tenants but the others dependent upon the Government miscreant as well.
This incrementalist approach has not worked in the past and will not work in the future. This bill will not move us incrementally in the right direction. The direction in which this legislation will lead us could be referred to as a continuation of mission creep. An idea for a small program or expenditure, no matter how deserving or well meaning, will only feed an ever-growing appetite for more Government money.
This bill will demonstrate yet again the innate nature of a Government subsidy to grow exponentially. Despite the confident assurances of flatlining the HUD budget for a few years, Government subsidized housing will continue to grow. A GAO report points out that there are an additional $18 billion in FHA insured mortgages at risk. While not a part of H.R. 2 directly, the liabilities associated with the subsidized mortgages on the housing projects and other factors virtually assure it, even if it were not the nature of Government’s quest to sate its ravenous consumption of our money.
The social reformers of the New Deal era persuaded a pliant Government to address the issue of unemployment and the needs of the slum dwellers. Presumably, no one bothered to address the responsibility issue. John Weicher of the Hudson Institute explains well the logic that brought us the current situation.
The social reformers of that era chose to ignore market forces, human nature, and the nature of Government. If Government spends enough of other people’s money, Government can change lives. ‘We know better for them than they do–and just how to do it,’ was the condescending implication.
They claimed that poor tenement housing largely caused the social ills of the urban dwellers. These so-identified breeding grounds of crime, delinquency, disease, mental illness, and worse were regarded as the result of the poor living conditions, not the cause. If Government could give them decent housing, Government could eliminate these problems, they dreamed. That dream has become a nightmare for all too many people–both for the people trapped by the constraints of the public dole and those forced through taxation to pay for it.
The erstwhile social reformers thought Government could eliminate the slums, create jobs in a depression and even encourage home ownership. Through Government, they could realize their dreams. They were wrong.
The United States Housing Act of 1937 established public housing, our oldest subsidy program, in order to create affordable, Depression-era housing for those temporarily unemployed or underemployed, eliminate slums, and increase employment through make-work construction jobs. The Great Depression has long been over, but its misguided largesse and Constitution-circumventing redistribution schemes continue. Of course, we are still paying the deficit–with compound interest–for those jobs despite having institutionalized slum life.
The War on Poverty demonstrated the mission creep. In 1965 government created the Housing and Urban Development [HUD] Agency following the beginning in 1961 of federally subsidized construction of privately owned housing projects. Subsidized housing has now mutated into three forms: public housing, privately owned projects and, section 8 certificates and vouchers for use in privately owned housing. Each of these three forms of Government-subsidized housing makes up roughly one-third of the subsidized housing stock.
Of the public housing projects, over 850,000 of the 1.4 million units were built between 1950 and 1975. Only about 100,000 new units were added to the public housing stock in the last 10 years. These units are built entirely with public funds, and the Federal Government pays part of the cost of operation. Over time, the Federal Government has to pay to modernize these developments too.
However, the local Public Housing Authorities [PHA's] run the projects with such ineptitude in so many cases they are literally run into the ground. Costs to operate the public housing projects are comparable to private housing, according to HUD numbers, only if one does not consider the cost of building the units in the first place–as if the cost of the mortgage on a private housing building should not be a factor in setting the rent.
The Federal Government then picks up the tab for the so-called modernization, or rehabilitation, of the projects as they deteriorate. With this setup, there is no incentive for the local PHA officials to reinvest the rental income back into the units. As a consequence, the local PHA does not maintain them sufficiently, and the tenants suffer a life in substandard housing. Standards that are deemed unacceptable in private housing are somehow good enough in the Government’s eyes for those on the lower rungs of the socioeconomic ladder.
The privately owned projects also bilk taxpayers on a grand scale, according to HUD Secretary Andrew Cuomo. He lambastes the fact that the Government is overpaying rents compared to what his department considers Fair Market Rent. HUD is subsidizing rents of $849 a month in Chicago neighborhoods where the market rate is only $435 a month; paying $972 a month in Oakland, CA, against a market rate of $607 a month; and in Boston, Government is paying $1,023 a month vis-a-vis $667 monthly in the private market, he says.
Mr. Cuomo attacks these abuses and decries the State of subsidized housing, but he does not recognize that these abuses are symptomatic of the system he is trying to preserve. ‘For years we have been trying to grapple with this issue,’ he tells us and dangles promises of huge future savings if Government tinkers around the edges of an ill-conceived system that tries to cheat the market, tries to circumvent human nature, and ignores the nature of Government subsidies.
His current promises are as false as the promises of his predecessors. One of his successors will 1 day lament the horrible State of subsidized housing he inherited and will promise grandiose reforms that will save billions if Government only passes a future subsidized housing bill.
One of the worst complications of this approach is the builtin disincentives to proper management. Under a convoluted setup, these privately owned projects rely on FHA insurance and a Federal subsidy paycheck to pay for it. Too often, these ill-managed projects deteriorate so quickly that the units are torn down before they pay for their own construction. Under Mr. Cuomo’s directives, HUD will decide the market rate concerning its subsidies. The market distortions of the tax code and FHA insurance make the situation worse.
Vouchers and certificates are the best of the inherently flawed approaches. About 80 percent of people with vouchers find suitable housing of their choice–very often at only 40-60 percent of the cost of less desirable public housing. After enacting certificates in 1974 and vouchers in 1983, about 1.5 million households have been served by this approach–1.1 million through certificates and 400,000 through vouchers.
The benefits of the tenant-based approach include the reliance of a quasi-free market competition with the attendant bonuses of lower costs, great efficiency, rewards for personal initiative, and individual choice. Under tenant-based rental assistance, recipients are less likely to live in concentrated poor urban communities that often lack basic necessities: safety, good schools, employment opportunities, access to financial services, and so forth. They have a way out of the trap of project-based public housing units that have become a way of life.
Market incentives through tenant choice put the renters in charge of their housing decisions. They may find the housing of their choice and even keep the difference between the rent and the voucher if they find housing for less than their voucher enabled them. This is not the case with the certificates. Unfortunately, the household remains tied to the State with the contingent constraints and perverse incentives that this arrangement implies.
Unfortunately, H.R. 2 does not address these concerns. It leaves uncertain the ‘proper’ approach to subsidizing housing despite the fanfare of a ‘new’ approach. While formally repealing the 1937 housing act, the mentality remains along with the compendium of problems inherently associated with it.
The bill leaves uncertain whether a ‘tenant-based approach’ or a ‘project-based approach’ will be instituted. In the Washington tradition, a compromise is offered. Again, in the Washington tradition, this bill embraces the worst aspects of both approaches and fuses them together.
This bill tries to ‘target’ their social reforms now. By this Government’s attempts to force social reforms through osmosis by luring better role models into the modern slums. Perhaps the Ellen Wilson housing project in Washington, DC, just blocks away from the Capitol, would reassure us as to the benefits of incrementalism. In a city with a waiting list of 16,000 people, Government is spending about $186,000 per unit to build subsidized housing instead of spending less per unit and housing more people.
One would hope that at least such incredible sums are going to the most needy of the 16,000 people waiting for subsidized housing. Yet even those earning up to $78,000 a year could qualify. Incremental social reform is not cost efficient.
The Washington Post wrote on April 24, 1997, that Valley Green, a Washington, DC, housing project built in early 1960′s, was launched ‘to house people displaced by ‘slum clearance,’ [and] soon became a slum itself, poisoned over the decades by a toxic brew of poverty, rampant vandalism, violent drug dealing, and government neglect. The resulting wasteland, which stretches across 20 acres of silent concrete courtyards and rutted city streets, has come to serve in recent years as a convenient backdrop of politicians looking to cast blame for decades of despair.’
This story is very indicative. It is one that has been retold far too many times in too many places. This expenditure has not even provided decent housing to those Government was trying to help. According to HUD inspection general reports, up to 80 percent of the units fail inspections.
It is a story that will be retold again and again if this bill passes. It is a testimony of the effects of Government-engineered social reform of housing. One must not forget the lofty goal of slum elimination of the 1930′s that spawned this misadventure. That lofty goal of the 1960′s spawned the dreamily named Valley Green. One can only wonder what name Government shall bestow upon the next housing project born under H.R. 2′s new legislative regime.
Aside from the simple accounting costs associated with Government subsidized housing, there are other real costs. Unfortunately even this simplicity eludes HUD which routinely demonstrates that it is incapable of understanding basic accounting and accountability. Just this month, a congressionally instigated investigation of section 8 contract reserve accounts discovered $5 billion in addition to the $1.6 billion in excess reserve funds recaptured late last year. I sincerely doubt that the residents of Valley Green, other housing projects and taxpayers think this is a well-run program.
Just since HUD was created, Government has appropriated over $572 billion to the agency. Of course, this figure does not include rents and fees collected by the agency, so that it could be argued that total funding for public housing has been much higher. HUD is budgeted annually around $21.7 billion for each of the next 5 years, but the figure for last year was only $19.4 billion. More money will be wasted.
For fiscal years, 1965-75, the agency’s budget authority totaled less than $40 billion. In other words, Government has spent over half a trillion dollars of taxpayers’ hard-earned money on subsidized housing in the last 20 years.
Nor has this half a trillion dollars increased the home ownership rates of Americans. The fourth quarter averages of home ownership between 1965-74 averaged 64 percent. Despite such Governmental largesse, fourth quarter rates of home ownership averaged 64 percent between 1965-96. Certainly HUD has not made a significantly positive contribution to the goal of home ownership. They will be able to point to the easily identified few who have been helped at the expense of the less easily identified many who were negatively affected.
One must not forget that the increased Government expenditures derived through taxation have stifled the ability of many would-be homeowners to save for the down payment and purchase the home of their dreams. Instead, they pay the taxes to bankroll the dreams of the social reformers, past and present.
They are paying not only the bills of today but the taxes necessary to pay for the deficit spending dreamed up by previous social reforms. There is a real economic cost to these deficits. The distortions to the free market whereby the most efficient allocations of resources are made. HUD shows us the alternative–and considered enlightened–path to allocating resources better. The HUD bureaucracy consumes valuable resources that are best spent elsewhere. Even the new HUD Secretary concedes very readily that HUD is inefficient and wasteful. Government just needs to give it more time and more money, the Secretary pleads. Of course more time and more money have already cost us too much.
This irresponsible pipe dreaming has contributed to unsound fiscal and monetary policies and introduced new iterations in the business cycle. As the market tries to factor in these Government-spending-induced booms and busts, security against its ravages of higher unemployment and higher interest rates takes their toll. This added cost fuels the cycle which exacerbates the problem.
Not only the taxpayers suffer under this approach. The civil rights of the tenants of subsidized housing are discarded as housing sweeps violative of the fourth amendment are conducted in the name of a misdirected war on poverty and lack of affordable housing.
Of course, it is the middle class and working poor who pay the cost most directly. The rich shelter their money from many income taxes and have their FICA taxes for Social Security capped. This regressive Social Security tax takes an unfair toll on the working poor and middle class. Many more people could afford better housing absent paying for the inefficiencies of the Government’s approach to housing.
H.R. 2 is not the solution to our problems. Rather, it is an illustration of the creeping mission of more Government for a longer period of time not fulfilling the dreams of its engineers. This bill is more of the same incremantalism that began in the 1930′s. Despite proof that it was not working, we are asked to vote again to throw more money at the problem, give government more control of our lives and reap the rewards.
In the 1960′s, Government acknowledged again the failure of the mission and expanded the reach of Government exponentially. With those promises demonstrably unfulfilled, Government find itself again at a crossroads. Continue creeping incrementally towards more Government spending and a loss of civil and economic liberties or the path of freedom. I urge Government to offer liberty.
I do not doubt the compassion and intentions of many of the social reformers, then or now. They are, indeed, well-meaning folks. The problem is that the effects of their good intentions run counter to the aims of their endeavors.
Instead of a safety net that merely prevents a newly unemployed single mother from falling, the public housing project traps her and her family in its net and holds them hostage to the whims of the local Public Housing Authorities. These PHA’s are not accountable to her. She has sacrificed her liberty to PHA’s that are too often sinecures provided by political cronyism. Tales of their abuse are legendary.
This corrupt scenario produces crime statistics proportionately twice as high in and around subsidized housing projects as in the communities as wholes, according to HUD’s Office of Public and Indian Housing. Without the accountability inherent in a market situation, abuses are almost predictable. The public housing projects are but one of the worst examples of flouting the free market and the loss of accountability.
H.R. 2 attempts to improve the lot of those benefiting from subsidized housing and make the bureaucracy less burdensome. Unfortunately, by the time this proposal goes to the floor, so many changes will have been made, compromises accepted and political deals consummated that we end up with a bill in some ways worse than the status quo, as bad as that is.
The end result of this well-meaning attempt to care for those less fortunate is higher taxes, especially on the working poor, slower economic growth, fewer job offers and a reaffirmation of Government’s determination to keep tenants trapped in substandard housing whose managers are not accountable to them.
At the same time, those politically astute suppliers of Government housing encourage the continuation of such programs at the expense of the more productive suppliers whose political polish does not place them in he ambit of those doling out the grants.
We should end this misguided approach to such legislation. It punishes all taxpayers with the future additional expense of increased eligibility requirements while limiting further the availability of subsidized housing for those who currently qualify. It rewards special interest favors for the politically connected–both unaccountable subsidized housing managers, department bureaucrats, politically contributing public construction businesses and the landlords cashing above market Government rent checks for substandard housing.
The opportunity that H.R. 2 provides is squandered in an extension of more of the same. While consolidating programs could make oversight easier and bureaucrats and local PHA’s more accountable, it is unlikely that this bill will go far enough to address the problems with our subsidized housing programs. New problems resulting from targeting are almost certain. Many of the critics of the left are correct to point out this mean misallocation of funds from the working poor and middle class to tenants with higher incomes than current tenants despite the waiting list.
Only by rewarding individual initiative, choice, responsibility and the resultant accountability can Government reforms better serve the recipients. Of course, only less Government and lower taxes will truly meet those aims.
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