April 29th, 1998
I rise in support of this rule. It is obviously a very fair rule because I am allowed to offer an amendment later on, so I am pleased to be able to vote for this rule. I have an amendment that I am going to offer in Title I which will be designated so that the Social Security number cannot be used for the electronic personal identifier for any of the programs in this educational bill.
The American people have become very worried about how often the Social Security number is being used as a national identification number, and we are working quickly toward a time where we have a national identification card. We certainly have abused the Social Security number as being the number. It was never intended that way. That is not what was intended when the Social Security was started that this number would be a universal number for everything.
In 1974, it was stated rather explicitly that the Social Security number should not be used for programs like this, and I would like to just quote the Privacy Act of 1974: ‘It shall be unlawful for any Federal, State or local government agency to deny any individual any right, benefit or privilege provided by law because of such individual’s refusal to disclose his Social Security number.’
I think this is a good idea, because today we are very much aware of the fact that if a company, if a loaning company, or if one is going into a store to buy something, and they get one’s name and one’s Social Security number, one knows that they can call up more information about somebody than they know about themselves. I think this is a serious threat to the privacy of every American citizen, and we should be cautious about using the Social Security number. It is being used all the time.
Mr. Speaker, prior to coming to this Congress, I was an obstetrician delivering babies, and babies cannot leave the hospital these days without a Social Security number. So they are born, get a Social Security number, they do not leave the hospital without it, and do my colleagues know that one cannot have a death certificate without a Social Security number? They are everyplace. It is an intrusion on our privacy. We do not need to use a Social Security number.
When I was in the Air Force, we used to have an identification number, but now, today, it is the Social Security number. Not too many years ago a law was passed here in the Congress that mandates that each State licensing agent for our automobile says that one has to have a Social Security number. So now they will be cross-checking with Social Security number and all of our driver’s license numbers.
We are losing our privacy in this country. The American people know it. We do not need this number to be used in this program for it to be successful, and we should move very cautiously, and I hope I can get support for this amendment so that we do not use the Social Security number as the electronic personal identifier.
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April 29th, 1998
Mr. PAUL. Mr. Speaker, I rise in support of this legislation. It makes no sense to pay somebody, pay for free needles to do something that is currently illegal. It is very questionable whether it will do any good.
As a physician, I would have to agree with the opposition that a clean needle certainly is better than a dirty needle. I do not think there is a question about that. But I do believe that there is a message sent that if we provide free needles to do something that we are condoning or encouraging it. But there is also a strong moral as well as an economic argument against this.
What we are talking about here is lowering costs of risky behavior. We are saying that we will pay for the needles to perform this risky behavior. But there is another much larger element that has not been discussed so far, and that has to do with the concept that all risky behavior be socialized; that is, through the medical system, it is assumed that those who do not participate in risky behavior must pay for the costs of the risky behavior, whether it has to do with cigarettes or whether it has to do with drugs or whether it has to do with any kind of safety.
So, therefore, the argument is that we have to save money in medical care costs by providing free needles. But there is another position, and that is that we might suggest that we do not pay for free needles and we might even challenge the concept that we should not be paying people and taking care of them for risky behavior, whether it is risky sexual behavior or risky behavior with drugs.
I think this is very clearly the problem, and I do not believe we should be socializing this behavior because, if we do, we actually increase it. If we lower the cost of anything, we increase the incidence of its use. So if the responsibility does not fall on the individual performing dangerous behavior, they are more likely to, and this is just part of it, the idea that we would give them a free needle.
But there is a moral argument against this as well. Why should people who do not use drugs or do not participate in dangerous sexual procedures and activities have to pay for those who do? And this is really the question, and there is no correct moral argument for this. And the economic argument is very powerful. It says that if we lower the cost, we will increase this behavior.
But this is not only true when we are dealing with drugs. It has to do with cigarettes. I mean, the whole tobacco argument is dealing with the same issue, that we have to pay for the costs of people who get sick from dangerous behavior with cigarettes and, therefore, we have to come in and regulate the tobacco companies and nobody can assume responsibility for themselves.
Same thing with alcohol and safety. This is the reason we have so much government regulation dealing with helmet laws and seat belts and buzzers and beepers and air bags. So this concept has to be dealt with if we are ever to get to the bottom of this.
So, Mr. Speaker, I strongly support this legislation.
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April 29th, 1998
Amendment No. 3 offered by Mr. Paul :
Page 50, line 13, at the end of paragraph (1) add the following new sentence: ‘The Secretary shall not use the social security account numbers issued under title II of the Social Security Act as the electronic personal identifier, and shall not use any identifier used in any other Federal program as the electronic personal identifier.’.
Mr. PAUL. Mr. Chairman, this amendment is not a complex amendment. It merely states that Social Security numbers cannot be used to identify the individuals who will be participating in this program.
This is a common practice, obviously, today. The Social Security number is used just for about everything. As a matter of fact, many Americans think way too often.
There are 40 Federal programs now where the Social Security number is required. Not only that, the Federal Government now has been mandating the uses of the Social Security number for similar purposes even on State programs such as obtaining our driver’s license.
The concern that I have and that many Americans have is that government is too intrusive, wants too many records and knows too much about everybody. The government and nongovernment people can get our names and they can get our Social Security numbers and find out more about us than we know about ourselves, and that is not the intent of our Constitution. It certainly is not the intent of the Privacy Act.
The Privacy Act concerns were expressed through this legislation in 1974 stating that, yes, we have overstepped our bounds, there is too much intrusiveness, and we are moving in the direction of a national identification card, something that is unknown and should be unheard of in a free society.
We should not have an identity card to carry our papers to get jobs, open bank accounts, move about the country, but we are moving rapidly in that direction. This is a token effort to make this point and require the government to use some other identification method for this program. It can be done. There is nothing sacred about the Social Security number. The program can be run without the use of Social Security.
I would like to just read very briefly some passages from the Privacy Act of 1974 to make my colleagues stop and think about what we are doing.
‘It shall be unlawful for any Federal, State or local government agency to deny any individual any right, benefit or privilege provided by law because of such individual’s refusal to disclose his Social Security number.’
If one does not give his Social Security number, one is in big trouble in this country. One cannot even get out of the hospital if one is born without a Social Security number, and one cannot open up a savings account for a child if one does not have a Social Security number. One is not even allowed to die at this time without a Social Security number, because one needs a Social Security number on one’s death certificate. Talk about cradle to grave.
‘Any Federal, State or local government agency which requests an individual disclose his Social Security number shall inform that individual whether that disclosure is mandatory or voluntary, by what statutory or other authority the number is listed and what uses will be made of it.’ We do not have that happening. Numbers are just demanded, and too many people have complied with it, and we go along with it, but more and more Americans are getting upset with this monitoring of everything that we do through the Social Security number.
Every single government program is now requiring it. Like I said, there are 40, 40 programs. Immigration, think about how the immigration programs are monitored through Social Security numbers. There have been attempts to use the Social Security number to monitor people in their voting. We do not need this. We do not need more government surveillance in promoting this kind of a program. The program can survive, can work.
Some would argue, well, possibly, just possibly, the efficiency of the program may be diminished. That will be the argument that I will probably hear. The efficiency of the program will be diminished. Well, if this is the argument, then we are saying that we are here to protect the efficiency of the State. I see an important role for us to be here is to protect the privacy and the civil liberties of the citizen. So we are in conflict. Which should our role be, to protect privacy and civil liberties, or is it to protect the efficiency of the State?
Well, it is not difficult for me to figure that out, and it is not like I am saying this program would not exist, it is just saying that we will put a small amount of surveillance on this where the government is not so casual in expanding its role for the Social Security number.
In the Privacy Act of 1974, in the findings, they made a comment which I think is very important, and this is in 1974 when it was not really bad. ‘The Congress finds the opportunities for an individual to secure employment, insurance and credit and his right to due process and other legal protections are endangered by the misuse of certain information systems.’
I ask my colleagues to support this amendment. This is a positive amendment; this is an amendment to protect civil liberties of every American.
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April 28th, 1998
Mr. PAUL. Mr. Speaker, the big question is how history will play the current financial situation if all the great wealth accumulated in the last 10 years dissipates in a financial collapse.
According to an article in The New Republic, Greenspan is not only held in high esteem on Wall Street, he is seen as Godlike. One trader is quoted as saying, ‘When things go well, I hold Greenspan’s picture between my hands and say, thank you. When things go poorly, I also take the photo in my hands and pray.’ And he is not alone on Wall Street in heaping praise on Greenspan. This comes as close to idolatry as one can get.
Alan Greenspan took over the Fed a few months before the stock market crash of October, 1997. In the 10 years that Greenspan has headed the Fed, $2 trillion of new credit has been created as measured by M3. Banks threatened by bankruptcy in the early 1990s received generous assistance from the Fed policy of low interest rates and rapid credit expansion as a response to the recession of 1991. Fed fund rates were held at 3 percent for well over a year. This generous dose of Fed credit has fueled the 5-year superboom on Wall Street.
We are endlessly told no inflation exists. But inflation is strictly and always a monetary phenomenon and not something that can be measured by a government consumer or producer price index.
Even so, there currently is significant price inflation for the fancy homes throughout the country, especially in the New York and Connecticut areas influenced by the New York financial center. CEO compensation is astronomically high, while wages for the common man have been held in check. The cost of all entertainment is not cheap and rises constantly. Art prices are soaring, as is the price of tickets to athletic events. Buying stocks with a 1.8 percent dividend yield is not cheap. These prices are inflated. The cost of education, medicine, and general services are expensive and rising.
In spite of Government reports showing food prices are not rising, many constituents I talk to tell me food prices are always going up. It seems every family has difficulty compensating for the high cost of living and taxes are always inflating.
There is no doubt that many Americans know the salaries of the CEOs, athletes and entertainers are astronomically high. The wages of the average working man, though, has not kept up. Workers feel poorer and resentment grows.
Even with all of Wall Street’s euphoria, Main Street still harbors deep concern for their financial condition and the future of the country. Many families continue to find it difficult to pay their bills, and personal bankruptcies are at a record high at 1,400,000 per year. Downsizing of our large corporations continue as many manufacturing jobs are sent overseas.
This current financial bubble started in mid-1982. At that time, the money supply, as measured by M3, was $2.4 trillion. Today it is over $5.5 trillion. That is a lot of inflation, and money supply growth is currently accelerating.
Although the money supply has been significantly increased in the past 16 years and financial prices as well as other prices have gone up, Government officials continue to try to reassure the American people that there is no inflation to worry about because price increases, as measured by the Government’s CPI and PPI, are not significantly rising.
Stock prices, though, are greatly inflated. If we had an average valuation of the Dow Jones Industrials for the past 87 years, as measured by the PE ratios, the Dow would be a mere 4,100 today, not over 9,000. And the Dow would be much lower yet if we took the average price-to-dividend ratio or the price-to-book ratio.
The NASDAQ is now selling at 85 times earning. There is no doubt that most stock prices are grossly inflated and probably represent the greatest financial bubble known in history.
A lot of foreign money has been used to buy our stocks, one of the consequences of computer-age financial technology and innovations. Our negative trade balance allows foreign governments to accumulate large amounts of our treasury debt. This serves to dampen the bad effect of our monetary inflation on domestic prices, while providing reserves for foreign central banks to further expand their own credit.
Think of this: Money can be borrowed in Japan at Depression-era rates of 1 percent and then reinvested here in the United States either in more treasury debt earning 5 or 6 percent, or reinvested in our stock market, which is currently climbing at a 20 percent annualized rate. This sounds like a perfect deal for today’s speculators, but there is nothing that guarantees this process will continue for much longer. Perfect situations never last forever.
Some of the euphoria that adds to the financial bubble on Wall Street and internationally is based on optimistic comments made by our government officials. Political leaders remind us time and again that our budget is balanced and the concern now is how to spend the excess. Nothing could be further from the truth, because all the money that is being used to offset the deficit comes from our trust funds.
In other words, it’s comparable to a corporation stealing from its pension fund in order to show a better bottom line in its day-to-day operations. Government spending and deficits are not being brought under control. Tax rates are at historic highs, and all government taxation now consumes 50 percent of the gross national income.
It is now commonly believed that the East Asian financial crisis is having no impact on our economy. But it’s too early to make that kind of an assessment. Our president remains popular, according to the polls, but what will it be like if there’s any sign of economic weakness? There could then be a lot of ‘piling on’ and finger pointing.
PROBLEMS AND VICTIMS
The basic cause of any financial bubble is the artificial creation of credit by a central bank (in this case our Federal Reserve). Artificially creating credit causes the currency to depreciate in value over time. It is important to understand the predictable economic problems that result from a depreciating currency:
1. In the early stages it is difficult to forecast exactly who will suffer and when.
2. Inflated currency and artificially low interest rates result in mal-investment that produces over capacity in one area or another.
3. Wealth generally transfers from the hands of the middle-class into the hands of the very wealthy. (The very poor receiving welfare gain a degree of protection, short of a total destruction of the currency.)
4. Prices indeed do go up, although which prices will go up is unpredictable, and the CPI and PPI can never be a dependable measurement of a monetary policy driven by loose credit.
5. The group that suffers the very most is the low-middle-income group (those willing to stay off welfare, yet unable to benefit from any transfer of wealth as stagnant wages fail to protect them from the ravages of the rising cost of living).
There are probably several reasons why this current economic boom has lasted longer than most others. The elimination of the Soviet threat has allowed a feeling of optimism not felt in many decades, and there has subsequently been tremendous optimism placed on potential economic development of many world markets in this age of relative peace.
There is also very poor understanding regarding economic interventionism, the system most nations of the world accept today. Today’s interventionism is not close to a free market. The great Austrian economist Ludwig von Mises consistently pointed out that interventionism always leads to a form of socialism, which then eliminates the apparent benefits of interventionism.
A good example of how interventionism leads to the destruction of a market can be seen in the recent tobacco fiasco. First, the tobacco industry accepted subsidies and protectionism to build a powerful and wealthy industry. Then, having conceded this ‘nanny’ role to the government, Big Tobacco had no defense when it was held liable for illnesses that befell some of the willing users of tobacco products. Now, the current plan of super taxation on tobacco users will allow the politicians to bail out the individual farmers who may be injured by reduced use of tobacco products (destruction of the market). This half-trillion-dollar tax proposal hardly solves the problem.
Just as in the 1920′s today’s productivity has fooled some economists by keeping prices down on certain items. Certainly computer prices are down because the price of computer-power has dropped drastically, yet this should not be interpreted as an ‘absence’ of inflation. Innovation has kept prices down in the computer industry, but it fails to do so when government becomes overly involved as it has in other technological areas, such as medical technology, where prices have gone up for services such as MRIs and CAT scans, not down.
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LEARN FROM JAPAN
The most important thing to remember is that perceptions and economic conditions here can change rapidly, just as they did last summer in the East Asian countries with the bursting of their financial bubble. They are now in deep recession.
Even though Japan first recognized signs of difficulty nine years ago, their problems linger because they have not allowed the liquidation of debt, or the elimination of over capacity, or the adjustment for real estate prices that would occur if the market were permitted to operate free of government intervention. The U.S. did the same thing in the 1930s, and I suspect we will do exactly what Japan is doing once our problems become more pressing. With our own problems from the inflation of the last 15 years now becoming apparent, their only answer so far is to inflate even more.
In its effort to re-energize the economy, the Bank of Japan is increasing its reserves at a 51 percent rate. This may be the greatest effort to ‘inflate’ and economy back to health in all of history. Japan has inflated over the years and will not permit a full correction of their mal-investment. The Bank of Japan is doing everything possible to inflate again, but even with interest rates below 1 percent there are few takers.
OECD measurements, the M1 and quasi-money have been increasing at greater than 20 percent per year in East Asia. In the United Stats, M3 has been increasing at 10 percent a year. It is estimated that this year the U.S. will have a $250 billion current account deficit–continued evidence of our ability to export our inflation.
We are now the world’s greatest debtor, with an approximately $1 trillion debt to foreign nations. Although accumulation of our debt by foreign holders has leveled off, it has not dropped significantly. The peak occurred in mid-1997–today these holding are slightly lower.
THE CRUELEST TAX OF ALL
This process of deliberately depreciating a currency over time (inflation) causes a loss in purchasing power and is especially harmful to those individuals who save. AIER (American Institute for Economic Research) calculates that 100 million households since 1945 have lost $11.2 trillion in purchasing power. This comes out to $112,000 per household, or put another way, over 5 decades each one of these households lost $2,200 every year.
Although many households are feeling very wealthy today because their stock portfolios are more valuable, this can change rather rapidly in a crash. The big question is what does the future hold for the purchasing power of the dollar over the next 10 or 20 years?
THE END IN SIGHT?
Reassurance that all is well is a strategy found at the end of a boom cycle. Government revenues are higher than anticipated, and many are feeling richer than they are. The more inflated the stock market is as a consequence of credit creation, the less, reliable these markets are at predicting future economic events. Stock markets can be good predictors of the future, but the more speculative they become, the less likely it is the markets will reveal what the world will be like next year.
The business cycle–the boom-bust cycle of history–has not been repealed. The psychological element of trust in the money, politicians, and central bankers can permit financial bubbles to last longer, but policies can vary as well as perceptions, both being unpredictable.
CENTRAL BANKERS
The goal of central bankers has always been to gain ‘benefit’ from the inflation they create, while preventing deflation and prolonging the boom as long as possible–a formidable task indeed. The more sophisticated and successful the central bankers are as technicians, the larger the bubble they create.
In recent years, central bankers have had greater ‘success’ for several reasons. First, due to the age in which we live, internationalizing labor costs has been a great deal more convenient. It is much easier for companies to either shift labor from one country to another, or for the company itself to go to the area of the world that provides the cheapest labor. This has occurred with increased rapidity and ease over the past two decades.
Central bankers have also become more sophisticated in the balancing act between inflation and deflation. They are great technicians and are quite capable of interpreting events and striking a balance between these two horrors. This does not cancel out the basic flaw of a fiat currency; central bankers cannot replace the marketplace for determining interest rates and the proper amount of credit the economy needs.
Central bankers have also had the advantage of technological changes that increase productivity and also serve to keep down certain prices. It is true that we live in an information age, an age in which travel is done with ease and communication improvements are astounding. All of these events allow for a bigger bubble and a higher standards of living. Unfortunately this will not prove to be as sustainable as many hope.
THE PRICE OF GOLD
Another reason for the central bankers greater recent success is that they have been quite willing to cooperate with each other in propping up selected currency values and driving down others. They have cooperated vigorously in dumping or threatening to dump gold in order to keep the dollar price of gold in check. They are all very much aware that a soaring gold price would be a vote of no confidence for central-bank policy.
Washington goes along because it is furtively, but definitely, acknowledged there that a free-market, high gold price would send a bad signal worldwide about the world financial system. Therefore, every effort is made to keep the price of gold low for as long as possible. It’s true the supply-siders have some interest in gold, but they are not talking about a gold standard, merely a price rule that encourages central-bank fixing of the price of gold. Most defenders of the free-enterprise system in Washington are Keynesians at heart and will not challenge interventionism on principle.
Instead of making sure that policy is correct, central bankers are much more interested in seeing that the gold-price message reflects confidence in the paper money. Thus gold has remained in the doldrums despite significant rising prices for silver, platinum, and palladium. However, be assured that even central banks cannot ‘fix’ the price of gold forever. They tried this in the 1960′s with the dumping of hundreds of millions of ounces of American gold in order to artificially prop up the dollar by keeping the gold price at $35/oz., but in August 1971 this effort was abandoned.
THE SOLUTION
The solution to all of this is not complex. But no effort is going to be made to correct the problems that have allowed our financial bubble to develop, because Alan Greenspan has been practically declared a god by more than one Wall Street guru. Because Alan Greenspan himself understands Austrian free-market economics and the gold standard, it is stunning to see him participate in the bubble when he, deep down inside, knows big problems lurk around the corner. Without the motivation to do something, not much is likely to happen to our monetary system in the near future.
It must be understood that politicians and the pressure of the special
interests in Washington demand that the current policies of spending, deficits, artificially low interest rates and easy credit will not change. It took the complete demise of the Soviet-Communist system before change came there. But be forewarned: change came with a big economic bang not a whimper. Fortunately that event occurred without an armed revolution . . . so far. The amazingly sudden, economic events occurring in East Asia could still lead to some serious social and military disturbances in that region.
The key element to the financial system under which we are now living is the dollar. If confidence is lost in the dollar and a subsequent free-market price for gold develops, the whole financial system is threatened. Next year, with the European currency unit (ECU) coming on line, there could be some serious adjustments for the dollar. The success of the ECU is unpredictable, but now that they are indicating some gold will be held in reserve, it is possible that this currency will get off the ground.
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NATIONALISM
However, I continue to have serious reservations regarding the ECU’s long-term success, believing that the renewed nationalism within Europe will not permit the monetary unification of countries that have generally not trusted each other over the centuries. In Germany, 70 percent of the people oppose entering into this new monetary agreement. If economic problems worsen in Europe–currently the unemployment rate in Germany and France is 12 percent–the European union may well get blamed.
The issue of nationalism is something that cannot be ignored. Immediately after the collapse in East Asia, Malaysia began shipping out hundreds of immigrants from Indonesia as a reaction to their economic problems. Resentment in Germany, France, and England is growing toward workers from other countries.
The same sentiment exists here in the United States, but it’s not quiet as bad at this particular time because our economy is doing better. But in the midst of a deep recession, the scapegoats will be found and alien workers will always be a target.
The greatest danger in a collapsing financial bubble is that the economic disruptions that follow might lead to political turmoil. Once serious economic problems develop, willingness to sacrifice political liberty is more likely, and the need for a more militant government is too often accepted by the majority.
No one has firmly assessed the Y2K problem, but it cannot bode well if a financial crisis comes near that time. Certainly a giant company like Citicorp and Travelers, who have recently merged, could really be hurt if the Y2K problem is real. Since the markets seem to be discounting this, I have yet to make up my own mind on how serious this problem is going to be.
WASHINGTON MENTALITY
Every politician I know in Washington is awestruck by Greenspan. The article in The New Republic reflects the way many Members of Congress feel about the ‘success’ of Greenspan over the last ten years. Add to this the fact that there is no significant understanding of the Austrian business cycle in Washington, and the likelihood of adopting a solution to the pending crisis, based on such an understanding, is remote.
Liberals are heedless of the significance of monetary policy and its ill effects on the poor. They have no idea that the transfer of wealth from the poor to the rich occurs as a result of monetary policy and serves to hurt the very people they claim to represent. Liberals stick to the old cliche that all that’s needed are more welfare benefits. They are, I’m sure, influenced by the fact that if more welfare benefits are handed out, they can count on the Federal Reserve to accommodate them. Unfortunately this will continue to motivate them to argue for a loose monetary policy.
The debate so often seems only to be who should get the expanded credit, the business-banking community or the welfare recipients who will receive it indirectly through the monetization of an ever-expanding government deficit. In Washington there is a craving for power and influence, and this motivates some a lot more than their public display of concern for helping the poor.
Whether it’s Japan that tries to inflate their currency to get out of an economic problem, or the East Asian countries facing their crisis, or our willingness to bail out the IMF, resorting to monetary inflation is the only option being considered. We can rest assured that inflation is here to stay.
With daily pronouncements that inflation is dead, the stage is set for unlimited credit expansion whenever it becomes necessary. Just as deficit spending and massive budgets will continue, we can expect the falling value of the dollar, long term, to further undermine the economic and political stability of this country and the world.
Until we accept the free market principle that governments cannot create money out of thin air and that money must represent something of real value, we can anticipate a lot more confiscation of wealth through inflation.
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April 28th, 1998
WASHINGTON, DC – Calling it necessary for the promotion of individual liberty and limited government, U.S. Rep. Ron Paul has introduced what should be 28th Amendment to the US Constitution; HJ116, the Liberty Amendment.
“Over the years this amendment has enjoyed widespread support and has been introduced several times in the past by various Members of Congress, but finally this measure has a chance of success given the conservative Congress and mood of the country in favor of a more limited, constitutional government which respects individual liberty,” said Paul after introducing the measure Tuesday night.
The amendment will not only prohibit the federal government from participating in activities not specifically authorized in the Constitution, essentially strengthening the existing Ninth and Tenth Amendments, but will repeal the 16th Amendment. The 16th allowed for the collection of income taxes.
“The income tax is the most regressive tax imaginable, allowing government to take first claim on our lives. The income tax assumes government owns us, as individuals, and has a sovereign claim to the fruits of our labor. This is immoral. But government has been compelled to levy this economically damaging tax because government has grown so big. By reducing the size of the federal government to those functions strictly enumerated in the Constitution, there will no longer be a need for the income tax,” said Paul.
Paul concluded, “Once again, Americans are being treated to hearings on the abuses of the IRS. For as abusive as the IRS is, it is in fact simply the predictable result of the underlying income tax. By eliminating the income tax, we will go a long way toward eliminating these abuses.”
The Liberty Amendment has evolved over a period of years, beginning in 1952 with introduction of Section 1 by Rep. Ralph Gwinn of New York. The amendment, or a form of it, has been supported by more than a dozen Member of Congress, including Rep. Chris Cox (R-Calif) in 1993 (to end federal estate and gift taxes) and Rep. Sam Johnson (R-TX) in 1996 (to repeal the 16th Amendment). Rep. Paul lent support to the Liberty Amendment in 1981, when he introduced the measure with several other Members, during the 97th Congress.
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April 24th, 1998
WASHINGTON, DC – US Rep. Ron Paul’s HR 2161 will be the subject of committee hearings next week. The bill, which would transfer title of Lake Texana to the State of Texas, was introduced last year by Rep. Paul.
“By taking the federal government out of the equation, this bill will allow Texans more say over their own water issues, it will result in less regulation and important cost reductions to the people of Jackson County and the water users of Lake Texana,” Paul said.
Paul was quick to praise the efforts of district residents who worked to put together a bill which took into account the concerns of different interests in the district.
“Mr. Cole Rowland from the Highland Lakes Group alerted me to concerns of folks in Travis County, Mr. Rowland was very helpful and we worked together to come up with changes to the legislation which will take care of the very legitimate concerns which Mr. Rowland presented,” Paul said, adding that he would change the bill to reflect the suggestions of Mr. Rowland, verbatim.
Paul also praised Emmett Gloyna and officials of the Lavaca/Navidad River Authority, (LNRA) “together with Mr. Rowland they were very reasonable and open minded in working together to get a good bill. Now we can move forward with getting the bill enacted so that the people of Jackson, Calhoun and Aransas counties, and indeed all those along the central Gulf Coast, can benefit from reduced rates.”
Paul said, “I think it is a testament to the people involved in this issue that we were able to come to agreement on the wording and I’m glad that we are actually getting the bill to the committee hearing stage, it has been a pleasure bringing these folks together in this way to make sure that the residents of both Jackson County and Travis County are happy with the bill.”
Mr. Rowland, President of the Highland Lakes Group said, “We were originally concerned about the possible diversion of water, with the language we worked up I’m now confident that will not happen. Congressman Paul and the folks at LNRA worked closely with us and were very receptive to our concerns, for that I am most grateful.”
Emmett Golyna of LNRA added that “this has been a challenging process, we’ve received lots of help from Congressman Paul’s office in negotiating issues. We appreciate that and are very much looking forward to completing this transaction which will provide tremendous benefits to our customers.”
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April 22nd, 1998
Mr. PAUL. Mr. Speaker, I thank the gentleman from Texas (Mr. Barton ) for yielding me this time, and I thank the gentleman for bringing this very important issue to the floor.
Mr. Speaker, I would also like to compliment the gentlemen and ladies on the other side who have spoken out against this resolution, because I have to compliment them. They are brave to be able to come up here and speak their beliefs and really come out on the position of being for taxes. If I did something like that, I could not return to Texas. But I have to admire them for their willingness to come here and take a pro-tax position, so I think that is to be commended.
Mr. Speaker, I would like to suggest to our side that if we all in the Congress did a better job in following the Constitution, we would not need this amendment. Because if we took our oath of office seriously, if we followed the doctrine of enumerated powers, if we knew the original intent of the Constitution, this government and this Congress would be very small and, therefore, we would not have to be worrying.
The other contention we have and have to think about is if we do not already follow the Constitution in so many ways, why are we going to follow it next time? Nevertheless, this is a great debate. I am glad I am a cosponsor. I am glad it was brought to the floor.
We do have to remember there is another half to taxation and that is the spending half. It is politically unpopular to talk about spending. It is politically very popular to talk about the taxes. So, yes, we are for lower taxes, but we also have to realize that the government is too big. They are consuming 50 percent of our revenues and our income today, and that is the problem.
Government can pay for these bills in three different ways. One, they can tax us. One, they can borrow. And one, they can have the tax of inflation, which is indeed a tax. We are dealing here only with one single tax. But eventually, when we make a sincere effort to get this government under control, we will look at all three areas.
We will limit the borrowing power. We will limit the ability of this Congress to inflate the currency to pay the bills. And we certainly will follow the rules of this House and this Constitution and not raise taxes.
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