June 25th, 1998
Mr. PAUL. Mr. Speaker, it has recently come to my attention that James Grant has made a public warning regarding monetary crises. In an Op-Ed entitled “Every Currency Crumbles” in The New York Times on Friday, June 19, 1998, he explains that monetary crises are as old as money. Some monetary systems outlive others: the Byzantine empire minted the bezant, the standard gold coin, for 800 years with the same weight and fineness. By contrast, the Japanese yen, he points out, is considered significantly weak at 140 against the U.S. dollar now to warrant intervention in the foreign exchange markets but was 360 as recently as 1971. The fiat U.S. dollar is not immune to the same fate as other paper currencies. As Mr. Grant points out, “The history of currencies is unambiguous. The law is, Ashes to ashes and dust to dust.”
Mr. James Grant is the editor of Grant’s Interest Rate Observer, a financial publication, and editorial director of Grant’s Municipal Bond Observer and Grant’s Asia Observer. He has also authored several books including the biographical “Bernard Baruch: Adventures of a Wall Street Legend”, the best financial book of the year according to The Financial Times “Money of the Mind: Borrowing and Lending in America from the Civil War to Michael Milken”, “Minding Mr. Market: Ten Years on Wall Street with Grant’s Interest Rate Observer” and “The Trouble with Prosperity: The Loss of Fear, the Rise of Speculation, and the Risk to American Savings”. He is a frequent guest on news and financial programs, and his articles appear in a variety of publications.
[From the New York Times, June 19, 1998]
EVERY CURRENCY CRUMBLES
(By James Grant)
Currencies, being made of paper, are highly flammable, and governments are forever trying to put out the fires. Thus a half decade before the bonfire of the baht, the rupiah and the yen, there was the conflagration of the markka, the lira and the pound. The dollar, today’s global standard of value, was smoldering ominously as recently as 1992.
Monetary crises are almost as old as money. What is different today is the size of these episodes. It isn’t every monetary era that features recurrent seismic shifts in the exchange values of so-called major currencies. On Wednesday morning, after coordinated American and Japanese intervention, the weakling yen became 5 percent less weak in a matter of hours.
People with even a little bit of money ought to be asking what it’s made of. J.S.G. Boggs, an American artist, has made an important contribution to monetary theory with his lifelike paintings of dollar bills. So authentic do these works appear-at least at first glance, before Mr. Boggs’ own signature ornamentation becomes apparent-that the Secret Service has investigated him for counterfeiting. “All money is art,” Mr. Boggs has responded.
Currency management is a political art. The intrinsic value of a unit of currency is the cost of the paper and printing. The stated value of a unit of currency derives from the confidence of the holder in the promises of the issuing government.
It cannot undergird confidence that the monetary fires are becoming six and seven-alarmers. Writing in 1993 about the crisis of the European Rate Mechanism (in which George Soros bested the Bank of England by correcting anticipating a devaluation of the pound), a central bankers’ organization commented: “Despite its geographical confinement to Europe, it is probably no exaggeration to say that the period from late 1991 to early 1993 witnessed the most severe and widespread foreign exchange market crisis since the breakdown of the Bretton Woods System 20 years ago.” But the European crisis has been handily eclipsed by the Asian one.
Monetary systems have broken down every generation or so for the past century. The true-blue international gold standard didn’t survive World War I. Its successor, a half-strength gold standard, didn’t survive the Great Depression. The Bretton Woods regime-in which the dollar was convertible into gold and the other, lesser currencies were convertible into the dollar-didn’t survive the inflationary period of the late 1960′s and early 1970′s.
Today, the unnamed successor to Bretton Woods is showing its years. The present-day system is also dollar-based, but it differs from Bretton Woods in that the dollar is no longer anchored to anything. It is defined as 100 cents and only as 100 cents. Its value is derived not from a specified weight of gold, as it was up until Aug. 15, 1971, but from the confidence of the market.
For the moment, the market is highly confident. So is the world at large. In 1996, the Federal Reserve Board estimated that some 60 percent of all American currency in existence circulates overseas. The dollar has become the Coca-Cola of monetary brands.
However, as Madison Avenue knows as well as Wall Street, brand loyalties are fickle. In the early 1890′s, the United States Treasury was obliged to seek a bailout from the Morgan bank. During the great inflation of the 1970′s, Italian hotel clerks, offered payments in dollars, rolled their eyes. The yen, today reckoned dangerously weak at 140 or so to the dollar, was 360 as recently as 1971. The tendency of the purchasing power of every paper currency down through the ages is to regress. Is there any good reason that the dollar, universally esteemed today, should be different?
None. Certainly, the deterioration of the American balance-of-payments position doesn’t bode well for the dollar’s long-term exchange rate. Consuming more than it produces, the United States must finance the shortfall. And it is privileged to be able to pay its overseas bills with dollars, the currency that it alone can legally produce. Thailand would be a richer country today if the world would accept baht, and nothing but baht, in exchange for goods and services. It won’t, of course. America and the dollar are uniquely blessed.
Or were. France and Germany have led the movement to create a pan-European currency, one that would compete with the dollar as both a store of value and a medium of exchange. The euro, as the new monetary brand is called, constitutes the first serious competitive threat to the dollar since the glory days of the pound sterling.
In a world without a fixed standard of value, a currency is strong or weak only in relation to other currencies. The dollar’s “strength,” therefore, is a mirror image of-for example-the yen’s “weakness.” It is not necessarily a reflection of the excellence of the American economy.
And no degree of excellence can forestall a new monetary crisis indefinitely. Some monetary systems are better than others, and some last longer than others, but each and every one comes a cropper. The bezant, the standard gold coin of the Byzantine empire, was minted for 800 years at the same weight and fineness. The gold may still be in existence (in fact-no small recommendation for gold bullion-it probably is), but the empire has fallen.
After the 1994 crisis involving the Mexican peso, the world’s financial establishment vowed to stave off a recurrence. Even as the experts delivered their speeches, however, Asian banks were overlending and Asian businesses were overborrowing; the credit-cum-currency eruption followed in short order. Naturally, officials and editorialists are now calling for even better fire prevention systems.
But “stability,” the goal so sought after, is ever unattainable. The history of currencies is unambiguous. The law is, Ashes to ashes and dust to dust.
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June 23rd, 1998
Mr. PAUL. Mr. Speaker, in recent months there has been a lot of discussion on the House floor dealing with campaign finance reform.
I have spoken out on this issue, and once again I want to make some comments about how I see this problem and what we might do about it. Also I want to mention an amendment that I will be bringing up.
I suspect we will be talking about campaign finance reform for a couple more months. I see this somewhat differently than others. Others see that all we have to do is regulate the money and we are going to solve all our problems. But all governments are prone to be influenced by special interests. That is the nature of government.
So the smaller government that you have, the less influence you have and the less effort there is made to influence the government. But when you have a big government, there will be a lot of people and a lot of groups that will want to influence government, and that is where I see the problem.
Twenty-five years ago in the 1970s, after Watergate, the Congress wrote a lot of rules and regulations. Hundreds of candidates have filled out forms and have done all kinds of things that have been very complicated but have achieved very little. The problem is every bit as bad as it was before, and most people admit that.
I think there is a good reason for that. They were addressing the symptoms rather than the cause. And the cause is, of course, that big government is involved in every aspect of our lives, our personal lives, our economic lives, and also around the world, influencing almost every government in the world. So not only is there an incentive for business people to come here to influence our government, but there are labor groups that come to influence our government. We have international groups and other governments coming to influence us. And until that is settled, we can rest assured that we will continue to have these problems.
But there is another problem that I want to address, and that is the decreased interest in campaigns and elections. Thirty years ago we would have 30 some percent of the people would turn out in the primary elections. Today it is less than 20 percent. It is a steady decline. There is good reason for this because as government gets bigger and as money becomes more influential, and money talks, the little people who have their desires and their voices unheard and want to be heard, they feel very frustrated. So it is understandable and expected that there will be lower and lower turnout in our elections. That is exactly what is happening.
Now, why is this the case? Is it just because they are apathetic? I do not think so. I think a lot of people make wise choices and say it does not make a lot of difference; my vote does not really count because so much money is influencing what happens in Washington with legislation. And yet we have rules and laws throughout the country that make it just about impossible for anybody outside the ordinary two-party system to be represented.
Twenty percent of the people do not bother registering because of the frustration, 20 percent of the people who do register, register as Independents. So that leaves about 60 percent of the vote split between Republicans and Democrats, each getting 30 percent. They are a minority. The people who are really shortchanged are the majority, that 40 percent who feel unrepresented and very frustrated about the situation.
How does this come about? It just happens that Republicans and Democrats tend to control every legislative body in the country, every State legislative body. And, therefore, they write rules and regulations and have high fees for people getting on ballots, and you do not have any competition. And there is lack of interest, and there is a lot of frustration.
Take, for instance, some of the groups that have tried in the past to get on and become known but are frustrated by all these rules. There are Independents, Socialists, Greens, Taxpayers Party, Populists, Libertarians, Constitutionalists, Reform Party, Natural Party, American Party, Liberal Party, Conservative Party, Right to Life, Citizens Party, New Alliance Party, Prohibition Party, States Rights Party. All these people have been totally frustrated because they have so many obstacles put in their way by the requirement of huge numbers of signatures on ballots.
I would like to quote from Richard Winger, who writes a letter called the Ballot Access News. He cites one of the worst examples. He says Florida now requires 242,000 valid signatures to get a minor party or Independent candidate on the ballot of any State-wide office other than President. Only one signature is permitted on each petition sheet. He goes on. And the payment that is required is $8,250.
This is what needs to be changed. I have an amendment to the bill that will change this. I hope all my colleagues will pay attention to it.
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June 23rd, 1998
Mr. PAUL. Mr. Speaker, I rise today to express skepticism regarding HR4105, The Internet Tax Freedom Act. The stated goal of H.R. 4105 certainly is noble: “A bill to establish a national policy against State and local interference with interstate commerce on the Internet, to exercise congressional jurisdiction over interstate commerce by establishing a moratorium on the imposition of exactions that would interfere with the free flow of commerce via the Internet, to establish a national policy against federal and state regulation of Internet access and online services, and for other purposes.” The bill’s name, “Tax Freedom,” also expresses a laudable notion. One must always be wary of misnomers in Washington-the Justice Department comes to mind as one quick example. The late economic historian, Murray N. Rothbard, Ph.D., so warned when he stated “when someone in government mentions the word ‘fairness’, grab your wallet and run for the hills.”
I am, nevertheless, always suspicious when a recently-crafted bill comes to the House floor not only having bypassed the Committee process but without any advance warning. Such was the case with this bill. Moreover, this bill comes to the floor under suspension of the rules which does not allow for amendments and which limits the debate time to twenty minutes on each side. I, in fact, was denied an opportunity to speak by those managing the limited time allowable under this process.
However laudable the stated goal of tax freedom this bill still encroaches on state’s right to raise revenue and reserves instead (establishes) an exclusive right for national and international governments to instead impose the “proper” form of taxation and distribute it to local governments as these larger governmental bodies ultimately see fit. At the same time, this particular bill rewards those states which were quick to tax their citizens by “grandfathering” their taxes while excluding other States’ rights to do so certainly making this a bill that lacks uniformity.
If the intended purpose of the legislation was simply to keep the internet tax free, a three paragraph bill would have been adequate to accomplish this. Instead, HR4105 is significantly more complex. It, in fact, creates a new 30-member federal commission tasked with, among other things:
Examining model State legislation relating to taxation of transactions using the Internet and Internet access, including uniform terminology, definitions of the transactions, services, and other activities that may be subject to State and local taxation, procedural structures and mechanisms applicable to such taxation, and a mechanism for the resolution of disputes between States regarding matters involving multiple taxation;
Examining a simplified system for administration and collection of sales and use tax for remote commerce, that incorporates all manner of making consumer payments, that would provide for a single statewide sales or use tax rate (which rate may be zero), and would establish a method of distributing to political subdivisions within each State their proportionate share of such taxes, including an examination of collection of sales or use tax by small volume remote sellers only in the State of origin;
Examining ways to simplify the interstate administration of sales and use tax on remote commerce, including a review of the need for a single or uniform tax registration, single or uniform tax returns, simplified remittance requirements, and simplified administrative procedures; and
Examining the need for an independent third party collection system that would utilize the Internet to further simplify sales and use tax administration and collection;
These HR4105-established “duties” suggest that the Commission’s real purpose is to design a well-engineered system of taxation (efficient tyranny) rather than keep citizens in a state of “Tax Freedom” as the bill’s name suggests. I encourage my colleagues in this House as well as citizens of this country to be wary of federal and international encroachment upon the privacy and efficiency currently available to individuals around the globe via the internet.
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June 17th, 1998
Mr. PAUL. Mr. Speaker, I have long held that the real victims of U.S. trade policy, and specifically of our various trade embargoes, are American citizens who hope to sell goods abroad, most especially our agricultural producers. The intended victims of sanctions are corrupt foreign rulers but they always find a way to get goods from our competitors and when they fail to do so they simply pass along any suffering to their internal political opponents.
But, as I said, somebody is negatively affected. A recent issue of the American Farm Bureau Federation’s ‘Farm Bureau News’ contains a headline story which does a fabulous job of explaining how these embargoes adversely affect our American Farmers and Ranchers. In this front page story the Farm Bureau News masterfully details the true impact of trade embargoes.
Mr. Speaker, I am proud to represent a very rural, agriculturally-based district. My constituents are well aware of the importance of opening export markets for America’s agricultural producers. Mr. Speaker, at this time I would like to place in the Record this story from the Farm Bureau News in hopes that people in the Administration, as well as in this Congress will begin to reconsider destructive embargo policies which only harm our nation’s farmers and other producers including my constituents.
Trade sanctions and embargoes for the purpose of social reform or other reasons hurt American farmers and ranchers more than any other sector of the economy, Farm Bureau told a House Agriculture subcommittee last week.
‘Farm Bureau strongly opposes all artificial trade constraints such as embargoes or sanctions except in the case of armed conflicts,’ said Ron Warfield, president of the Illinois Farm Bureau. ‘We believe that opening trading systems around the world and engagement through trade are the most effective means of reaching international economic stability.’
President Clinton imposed sanctions against India and Pakistan after those countries detonated nuclear devices. House Agriculture Committee Chairman Bob Smith (R-Ore.) and ranking minority member Charlie Stenholm (D-Texas) have urged Clinton to exempt food and agricultural commodities from those sanctions. Pakistan is an important market for U.S. agricultural products, ranking third in purchases of U.S. wheat.
Sens. Dick Lugar (R-Ind.), Pat Roberts (R-Kan.), Larry Craig (R-Idaho) and Max Baucus (D-Mont.) have also asked Clinton to exclude agricultural exports from the sanctions.
Warfield, a member of the American Farm Bureau Federation board of directors, told the panel that when sanctions are imposed, agriculture typically bears the brunt through lost sales and gains a reputation as an unreliable supplier. While American agriculture loses through sanctions and embargoes, its toughest competitors win by picking up those markets.
Warfield noted that when the United States placed a grain embargo against the Soviet Union in the 1980s, American farmers lost $2.3 billion in farm exports. He said the effects continue to be felt.
‘When the United States cut off sales of wheat to protest the Soviet invasion of Afghanistan, other suppliers–France, Canada, Australia and Argentina–stepped in,’ Warfield said. ‘They expanded their sales to the Soviet Union, ensuring that U.S. sanctions had virtually no economic impact. Russia still appears to restrict purchases of American wheat, fearing the United States may again use food exports as a foreign policy weapon.’
Just the threat of sanctions can provoke trading partners into a retaliatory stance and threaten U.S. agricultural exports, the farm leader pointed out.
Warfield said Farm Bureau supports a bill (H.R. 3654) by Re. Tom Ewing (R-Ill.) that would prevent selective agricultural embargoes. The legislation, he said, would prevent useless embargoes that destroy American export markets while creating opportunities for other countries. Warfield said engagement with other nations, not sanctions and embargoes, should be the preferred option.
‘The United States, as the leader in world trade, has an unprecedented opportunity to promote its values throughout the world by peaceful engagement through trade,’ Warfield said, ‘Reaching out through engagement and trade, not withdrawing behind embargoes, is the best way to achieve positive change–not by denying ourselves access to the markets and creating opportunities for our competitors.’
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June 17th, 1998
WASHINGTON, DC – In a statement placed in the Congressional Record this week, US Rep. Ron Paul praised the American Farm Bureau Federation for identifying the “real victims” of US trade policy. The text of his statement follows:
“I have long held that the real victims of U.S. trade policy, and specifically of our various trade embargoes, are American citizens who hope to sell goods abroad, most especially our agricultural producers. The intended victims of sanctions are corrupt foreign rulers but they always find a way to get goods from our competitors and when they fail to do so they simply pass along any suffering to their internal political opponents.
“But, as I said, somebody is negatively effected. A recent issue of the American Farm Bureau Federation’s Farm Bureau News contains a headline story which does a fabulous job of explaining how these embargoes adversely effect our American Farmers and Ranchers. In this front page story the Farm Bureau News masterfully details the true impact of trade embargoes.
“Mr. Speaker, I am proud to represent a very rural, agriculturally-based district. My constituents are well aware of the importance of opening export markets for America’s agricultural producers. Mr. Speaker, at this time I would like to place in the record this story from the Farm Bureau News in hopes that people in the Administration, as well as in this Congress will begin to reconsider destructive embargoes policies which only harm our nation’s farmers and other producers including my constituents.”
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June 16th, 1998
Mr. PAUL. Mr. Speaker, I appreciate the opportunity to express my opposition to H. Res. 399, the resolution calling for full-funding of the Individuals with Disabilities Act (IDEA). My opposition to this act should in no way be interpreted as opposition to increased spending on education. However, the way to accomplish this worthy goal is to allow parents greater control over education resources by cutting taxes, thus allowing parents to devote more of their resources to educating their children in such a manner as they see fit. Massive tax cuts for the American family, not increased spending on federal programs, should be this Congress’ top priority.
The drafters of this bill claim that increasing federal spending on IDEA will allow local school districts to spend more money on other educational priorities. However, because an increase in federal funding will come from the same taxpayers who currently fund the IDEA mandate at the state and local level, increasing federal IDEA funding will not necessarily result in a net increase of education funds available for other programs. In fact, the only way to combine full federal funding of IDEA with an increase in expenditures on other programs by state and localities is through massive tax increases at the federal, state, and/or local level.
Rather than increasing federal spending, Congress should focus on returning control over education to the American people by enacting the Family Education Freedom Act (H.R. 1816), which provides parents with a $3,000 per child tax credit to pay for K-12 education expenses. Passage of this act would especially benefit parents whose children have learning disabilities as those parents have the greatest need to devote a large portion of their income toward their child’s education.
The Family Education Freedom Act will allow parents to develop an individualized education plan that will meet the needs of their own child. Each child is a unique person and we must seriously consider whether disabled children’s special needs can be best met by parents, working with local educators, free from interference from Washington or federal educrats. After all, an increase in expenditures cannot make a Washington bureaucrat know or love a child as much as that child’s parent.
It is time for Congress to restore control over education to the American people. The only way to accomplish this goal is to defund education programs that allow federal bureaucrats to control America’s schools. Therefore, I call on my colleagues to reject H. Res. 399 and instead join my efforts to pass the Family Education Freedom Act. If Congress gets Washington off the backs and out of the pocketbooks of parents, American children will be better off.
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June 16th, 1998
Mr. PAUL. Mr. Speaker, campaign finance reform has been a major topic for months on the House floor and, I understand, will continue to be a major debate. The last time the Congress has passed any major reforms dealing with campaigning was in the 1970s, and every problem that we had back then we have today, only it is much worse. Today, in order to comply with the law, we fill out tens of thousands of pages of forms, there is total misunderstanding of what the rules and regulations are, there are numerous fines being levied against many Members and many candidates, there are many inaccuracies put into the record mainly because a lot of people cannot even understand the rules and regulations, and I would not be surprised if just about everybody who ever filled out a financial reform at one time or the other inadvertently had some inaccuracies. All the challenges to these records have always been done by opponents and usually politicized, and it has not been motivated for the best of reasons.
New reforms are now being proposed, and I predict they will be no more successful than the numerous rules and regulations that we imposed on candidates in the 1970s. The reason I say this is that we are treating a symptom and not the cause. The symptom, of course, is very prevalent. Everybody knows there is a lot of big money that influences politics. I understand that there is $100 million a month spent by the lobbyists trying to influence our votes on the House floor and hundreds of millions of dollars trying to influence our elections. So some would conclude, therefore, that is the case, we have to regulate the money, the money is the problem.
But I disagree. Money is not the problem. The basic problem is that there is so much to be gained by coming to Washington, lobbying Congress and influencing legislation. The problem is not that we have too much freedom. The problem is that we have too much government, and if we think that just more regulations and more government will get rid of the problem, we are kidding ourselves. What we need is smaller government, less influence of the government on everything that we do in our personal lives as well as our economic lives. The Congress is always being involved.
Not only domestically, but Congress is endlessly involved in many affairs overseas. We are involved by passing out foreign aid, getting involved in programs like the IMF and World Bank. We are interfering in internal affairs militarily in over a hundred countries at the present time. So there is a tremendous motivation for people to come here and try to influence us. They see it as a good investment.
More rules and regulations, I believe, will do one thing if the size of government is not reduced. What we will do is drive the influence under ground. That is a natural consequence as long as there is an incentive to invest.
Under the conditions that we have today the only way we can avoid the influence is not ourselves, we, the Members of Congress, being a good investment. We should be independent, courageous and do the things that are right rather than being influenced by the money. But the rules and the regulations will not do very much to help solve this problem. Attacking basic fundamental rights would certainly be the wrong thing to do, and that is what so much of this legislation is doing. It is attacking the fundamental right to speak out to petition the government to spend one’s money the way he sees fit, and this will only make the problems much worse.
Mr. Speaker, government is too big, our freedoms are being infringed upon, and then we come along and say those individuals who might want to change even for the better, they will have their rights infringed upon.
There are many groups who come to Washington who do not come to buy influence, but they come to try to influence their government, which is a very legitimate thing. Think of the groups that come here who want to defend the Second Amendment. Think of the groups that want to defend right to life. Think of the groups that want to defend the principles of the American Civil Liberties Union and the First Amendment. And then there are groups who would defend property rights, and there will be groups who will come who will be lobbyist types and influential groups, and they want to influence elections, and they may be adamantly opposed to the United Nations and interference in foreign policies overseas. They have a legitimate right to come here.
Sometimes I wonder if those individuals who are now motivated to put more regulations on us might even fear the fact that some of the good guys, some of the good groups who are coming here to influence Washington to reduce the size of government are no longer able to.
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June 11th, 1998
Mr. PAUL. Mr. Chairman, I rise today in opposition to the Child Protection and Sexual Predator Punishment Act of 1998. This bill, if passed, will further expand the authority of this country’s national police force and further ‘justify’ the federal Justice Department’s intrusion into mail, telephone and Internet communications.
Mr. Chairman, today the Congress will collectively move our nation yet another step closer to a national police state by further expanding the notion of federal crimes and paving the way for a deluge of federal criminal justice activity. Of course, it is much easier to ride the current wave of federally ‘criminalizing’ all human malfeasance in the name of saving the world from some evil than to uphold a Constitutional oath which prescribes a process by which the nation is protected from what is perhaps the worst evil, totalitarianism. Who, after all, and especially in an election year, wants to be amongst those members of Congress who are portrayed as soft on child-related sexual crime irrespective of the procedural transgressions and individual or civil liberties one tramples in their zealous approach.
In the name of the politically popular cause of protecting children against sex crimes, the Members of Congress will vote on whether to move the Nation further down the path of centralized-Government implosion by appropriating yet more Federal taxpayer money and brandishing more U.S. prosecutors at whatever problem happens to be brought to the floor by any Members of Congress hoping to gain political favor with those embracing some politically popular cause. The Child Protection and Sexual Predator Punishment Act of 1998 is no exception.
Who, after all, can stand on the house floor and oppose a bill which is argued to make the world safer for children with respect to crimes? It is a sad commentary when members of this body only embrace or even mention federalism when it serves their own political purposes and, at the same time, consciously ignore federalism’s implications for these politically popular causes. It seems to no longer even matter whether governmental programs actually accomplish their intended goals or have any realistic hope of solving problems. No longer does the end even justify the means. All that now seems to matter is that Congress pass a new law.
Crimes committed against children (as well as adults) are a problem that should concern all Americans. As a doctor of obstetrics I have enjoyed the privilege of bringing more than 3,000 new lives into the world. I know there are few things more tragic than crimes committed against young people. In fact, the types of crimes this bill attempts to federally punish are among the most despicable criminal acts committed. Undoubtedly, strong measures and penalties need to be imposed to deter and punish these criminal actors. Nevertheless, the threshold question in Congress must always be: ‘under what authority do we act?’ Should we cease to concern ourselves about the Constitution in all that we do and moved by emotion speak only of vague theoretical outcomes?
Any federal usurpation of criminal law, no matter how flexible, violates the 10th amendment to the U.S. Constitution. The 10th amendment limits the Federal Government to those functions explicitly enumerated in the Constitution. Other than in these few areas, the States are sovereign. Therefore the Federal Government has no authority to federalize crimes whether committed against children, women, or some specific race. Additionally, ours is an individual Bill of Rights rather than a system of rights dependent upon to which group (gender, race, or age) one happens to belong.
The drafters of the Bill of Rights knew quite well that it would be impossible for a central government to successfully manage crime prevention programs for as large and diverse a country as America. The founders also understood that centralized federal involvement in crime prevention and control was dangerous and would lead to a loss of precious liberty. The bill’s implication of federal monitoring of conversation on phone lines, the Internet, and U.S. mail is frightening and opens the door to unlimited government snooping.
Some will argue that federal legislation is necessary because communications cross state lines. Fortunately, the Constitution provides for the procedural means for preserving the integrity of state sovereignty over those issues delegated to it via the tenth amendment. The privilege and immunities clause as well as full faith and credit clause allow states to exact judgments from those who violate their state laws. The Constitution even allows the federal government to legislatively preserve the procedural mechanisms which allow states to enforce their substantive laws without the federal government imposing its substantive edicts on the states. Article IV, Section 2, Clause 2 makes provision for the rendition of fugitives from one state to another and in 1783 Congress passed an act which did exactly this.
I too find most despicable the criminal acts this bill attempts to make federal crimes, but under the U.S. Constitution criminal law jurisdiction lies with the States. This is why I oppose yet another step toward a national police state. And because I fear the bill’s implications regarding federal monitoring of voice, mail and data communications, I cannot support H.R. 3494.
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June 10th, 1998
The House in Committee of the Whole House on the State of the Union had under consideration the bill (H.R. 3150) to amend title 11 of the United States Code, and for other purposes:
Mr. GEKAS. Mr. Chairman, I want to thank my colleague Dr. Paul for introducing his amendment at this time. Dr. Paul is one of the foremost scholars on the issue of credit. His amendment emphasizes the heavy burden which federal taxation places on American families. Dr. Paul, certainly is correct in pointing out that, together with credit expansion, gambling, health care costs, etc., the federal burden is a contributing factor to bankruptcies and his foresight in bringing up this important topic is to be commended. I believe we should indeed focus further study on these concerns and make sure that future legislation in this area is mindful of this important fact.
Moreover, I want to thank Dr. Paul for being east to work with and for his understanding of our concerns in ensuring that this landmark legislation is passed, and for his actions to that end. However, I am currently opposed to this amendment due to time constraints and the fact that I am not sure of its implications. I look forward to working with you in the future on this language and on other issues concerning taxes and bankruptcy.
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June 4th, 1998
WASHINGTON – With the people of the United States facing the rising tide of “secular humanism” being offered as the religion-of-choice by courts and the government, and a growing hostility against people of faith, Rep. Ron Paul has taken a stand against a measure which he said led the country in the wrong direction for dealing with the situation.
While a cosponsor of the original legislation, Rep. Paul voted against the Religious Freedom Amendment to the Constitution on Thursday, saying the measure was changed and gave the federal government too much power in over-riding state and local decisions.
“The final version of the Religious Freedom Amendment further enabled the federal government to do more mischief by expanding their powers,” said Paul. “Those who have supported the amendment correctly argue that ‘rapidly growing government has tried to replace the church, and actually encourages discrimination and hostility against people of faith.’ That is absolutely true. However, the proper solution should be to shrink the size of the federal government — not further enlarge the federal government or impose upon states rules by which they must manage their school districts and property.”
Paul said he was disappointed that the measure overstepped the long-standing heritage in the United States of limited government by allowing Congress and the federal courts to further “instruct states and even local school districts on the use of their property — in direct contrast to the original intent of Constitutional framers to protect against a strong central government and in support of state and local government.”
“The only solution is to shrink the government and raise a new generation of judges and congressmen who understand the constitutional principles of original intent, enumerated powers and property rights. If we do this, our existing First Amendment right to freedom of religious expression will be protected more strongly than any effort at federal meddling,” said Paul. “Until our judges and our Congress embrace the Constitution, and willingly follows it, new Constitutional amendments will do little to help and will almost certainly make things worse by weakening the already-existing bill of rights.”
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