November 16th, 2000
Washington, D.C.- Legislation introduced by Congressman Ron Paul to restore local ownership of the Lake Texana/Palmetto Bend water project was signed by the President earlier this week. The Palmetto Bend Conveyance Act authorizes the State of Texas, acting through the Lavaca-Navidad River Authority, to purchase the federal interest in Lake Texana. The bill was designed to restore local control over the Lake Texana water supply and increase local availability of water in Jackson and Calhoun counties.
Successful passage of the legislation follows months of ongoing efforts by Congressman Paul, who worked tirelessly to finalize the measure before Congress adjourned for the year.
“I’m very pleased that the bill has been signed by the President,” Paul stated. “Local control of resources is critical. People know that management by federal regulators does not work, while local ownership results in more efficient use of resources. This legislation will result in the elimination of inefficient water use, which will benefit the people of Jackson county and all areas supplied by Lake Texana.”
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November 15th, 2000
The West has been at war with the Muslim world for over a thousand years. In this century, the British led the charge prior to World War II. Since that time it has been the United States. Although the British remain close allies of ours in intimidating the Muslim world, it is the military strength of the United States that assumes the burden of responsibility for the policy. It is justified by claiming a right and need to protect “our” oil.
For over a thousand years the West has dominated the Middle East. During these thousand years resentment has continued, but for obvious reasons it is now being directed toward America. No one should be surprised when our ships become vulnerable and are actually blown up in the Middle East.
If the U.S. understood the history of this region it would see the total folly of anchoring a war vessel in an enemy port. This lack of understanding of history and respect for religious beliefs of the area, in combination with our foreign policy of aggression and empire building, leads to arrogant foreign military intervention, not only in the Middle East, but around the world as well.
It is clear that we are not in the Middle East for national security reasons but instead to protect powerful commercial interests. This assures we protect oil supplies for the West, and provides us with an excuse to keep the military industrial complex active.
To put this in a proper perspective, consider how Americans, or especially Texans, would feel if the Gulf of Mexico were patrolled and protected by warships of a foreign power, say the Russians. What would we then think if that same power patrolling the Gulf built air bases in Texas and Florida with our government=s complicity with the argument that this was necessary to protect “their” oil and with our government’s complicity? This would anger many Americans and this anger would be directed to both the foreign occupiers of our territorial waters and our own government that permitted it. Yet this is exactly what has been happening in the Persian Gulf region. For religious, historic and sovereignty reasons, the Muslim people harbor great resentment toward us.
As a consequence of the USS Cole incident, our Navy has recognized the great danger we face in this region. This has forced us to avoid sending any more naval vessels through the Suez Canal. The ongoing conflict cannot end peacefully as long as we pursue this policy of folly.
The Cole disaster was needless and preventable. The loss of this vessel and the senseless deaths of 17 Americans were a consequence of a policy that has led to a lack of military readiness for our country, while increasing the danger to all Americans and in particular our servicemen in that region. It’s positively amazing that with a military budget of $300 billion we do not have the ability to protect ourselves against a rubber raft, which destroyed a $1 billion vessel. Our sentries on duty had rifles without bullets and were prohibited from firing on any enemy targets. This policy is absurd if not insane. It is obvious that our navy lacks the military intelligence to warn and prevent such an event. It is incapable even of investigating the incident, since the FBI was required to try to figure out what happened. This further intrusion has only served to increase the resentment of the people of Yemen toward all Americans.
But the Yemenis never will cooperate with our CIA and FBI agents, many of whom already have been forced to retreat and return to the States. Our insistence on invading Yemen to search for all those involved will only make our precarious situation in the Middle East worse.
Our policy in the Middle East cannot possibly be successful. It’s obvious there will be an inevitable conflict between our support for the moderate Arabs- which antagonizes the Islamic fundamentalists of this region- and our special treatment for Israel. It is clear that the powerful financial interests of this country want to use our military force to protect their commercial and oil interests in this region, while there will always remain powerful U.S. political support for the State of Israel. The two sides never will be reconciled by our attempt to balance our support by giving help to both sides. This is exactly opposite of being neutral and friends with both sides. The one reason why this confrontation is going to continue is that 75% of known oil reserves are now owned by Muslims around the world.
Our current foreign policy does nothing more than stir the flames of hatred of both sides, clearly evident as we witness the daily fighting between the Palestinians and the Israelis. Growing influence of the radical Islamic fundamentalists will allow them one day to overthrow the secular moderate puppet regimes supported by our government.
As the world becomes less stable due to currency, trade and other economic reasons, this region will become even more volatile. We should expect higher oil prices. Hatred toward America will continue to escalate, and United States security will continue to be diminished due to the threat of terrorist attacks. All the anti-ballistic missiles in the world will not be able to protect us against attacks such as the Cole suffered or from the nuclear and biological weapons that can be brought into this country in a suitcase.
The greatest threat to our national security is our own bad policy. Our policy has continued to permit our own military technology, developed by our taxpayers, to get into the hands of our so-called allies as well as our potential enemies like China.
The turmoil in the Middle East is now spilling over into Indonesia, a country made up of 17,000 islands and very vulnerable to political instability, especially since its currency and financial crisis of a few years ago. Indonesia is the world’s fourth largest nation, with the largest Muslim population of any country. Hatred toward the West, and especially America, due to the Middle East policy, has led to Christian persecution in Indonesia. The embassy is now closed, and American ambassador Robert Gelbard has been recalled after his life was threatened.
Our many failures in the last fifty years should prompt us to reassess our entire foreign policy of interventionism. The notion that since we are the only superpower left we have an obligation to tell everybody else how to live should come an end. Our failure in Korea, Vietnam, Somalia, and the Middle East, and our failure yet come to in Bosnia and Kosovo should alert all Americans to this great danger. But no, we instead continue to expand our intervention by further involving ourselves in yet another sovereign nation. This time it’s Columbia. By sending more weapons into the region we continue to stir up this 30-year civil conflict. And just recently this conflict has spilled over into Venezuela, a major force in South America due to its oil reserves. The Foreign Minister of Venezuela, angered by U.S. actions, recently warned that “any ship or boat which enters the Gulf of Venezuela, of whatever nationality it may be, will be expelled.” Our intervention in many of these regions, and especially in South America, has been done in the name of the drug war. But the truth is it’s serving the interests of the companies who own the oil rights in this region, as well as those who produce the weapons that get sent into these regions.
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November 14th, 2000
We’ve heard proponents of this FSC bill argue for tax breaks for U.S. exporters, which, of course, should be done. Those proponents, however, argue that this must be done to move the United States into compliance with a decision by the WTO tribunal. Alternatively, opponents of the bill, argue that allowing firms domiciled in the United States to keep their own earnings results in some form of subsidy to the ‘evil’ corporations. If we were to evaluate this legislation based upon the floor debated, we would be left with the choice of abandoning U.S. sovereignty in the name of WTO compliance or denying private entities freedom from excess taxation.
Setting aside the aforementioned false choice of globalism or oppression by taxation, there are three reasons to consider voting against this bill. First, it perpetuates an international trade war. Second, this bill is brought to the floor as a consequence of a WTO ruling against the United States. Number three, this bill gives more authority to the President to issue Executive Orders.
Although this legislation deals with taxes and technically actually lowers taxes, the reason the bill has been brought up has little to do with taxes per se. To the best of my knowledge there has been no American citizen making any request that this legislation be brought to the floor. It was requested by the President to keep us in good standing with the WTO.
We are now witnessing trade war protectionism being administered by the World (Government) Trade Organization–the WTO. For two years now we have been involved in an ongoing trade war with Europe and this is just one more step in that fight. With this legislation the U.S. Congress capitulates to the demands of the WTO. The actual reason for this legislation is to answer back to the retaliation of the Europeans for having had a ruling against them in favor of the United States on meat and banana products. The WTO obviously spends more time managing trade wars than it does promoting free trade. This type of legislation demonstrates clearly the WTO is in charge of our trade policy.
The Wall Street Journal reported on 9/5/00, ‘After a breakdown of talks last week, a multi-billion-dollar trade war is now about certain to erupt between the European Union and the U.S. over export tax breaks for U.S. companies, and the first shot will likely be fired just weeks before the U.S. election.’
Already, the European Trade Commissioner, Pascal Lamy, has rejected what we’re attempting to do here today. What is expected is that the Europeans will quickly file a new suit with the WTO as soon as this legislation is passed. They will seek to retaliate against United States companies and they have already started to draw up a list of those products on which they plan to place punitive tariffs.
The Europeans are expected to file suit against the United States in the WTO within 30 days of this legislation going into effect.
This legislation will perpetuate the trade war and certainly support the policies that have created the chaos of the international trade negotiations as was witnessed in Seattle, Washington.
The trade war started two years ago when the United States obtained a favorable WTO ruling and complained that the Europeans refused to import American beef and bananas from American owned companies.
The WTO then, in its administration of the trade war, permitted the United States to put on punitive tariffs on over $300 million worth of products coming into the United States from Europe. This only generated more European anger who then objected by filing against the United States claiming the Foreign Sales Corporation tax benefit of four billion dollars to our corporations was ‘a subsidy.’
On this issue the WTO ruled against the United States both initially and on appeal. We had been given until November 1st to accommodate our laws to the demands of the WTO.
H.R. 4986 will only anger the European Union and accelerate the trade war. Most likely within two months, the WTO will give permission for the Europeans to place punitive tariffs on hundreds of millions of dollars of U.S. exports. These trade problems will only worsen if the world slips into a recession when protectionist sentiments are strongest. Also, since currency fluctuations by their very nature stimulate trade wars, this problem will continue with the very significant weakness of the EURO.
The United States is now rotating the goods that are to receive the 100 to 200 percent tariff in order to spread the pain throughout the various corporations in Europe in an effort to get them to put pressure on their governments to capitulate to allow American beef and bananas to enter their markets. So far the products that we have placed high tariffs on have not caused Europeans to cave in. The threat of putting high tariffs on cashmere wool is something that the British now are certainly unhappy with.
The Europeans are already well on their way to getting their own list ready to ‘scare’ the American exporters once they get their permission in November.
In addition to the danger of a recession and a continual problem with currency fluctuation, there are also other problems that will surely aggravate this growing trade war. The Europeans have already complained and have threatened to file suit in the WTO against the Americans for selling software products over the Internet. Europeans tax their Internet sales and are able to get their products much cheaper when bought from the United States thus penalizing European countries. Since the goal is to manage things in a so-called equitable manner the WTO very likely could rule against the United States and force a tax on our international Internet sales.
Congress has also been anxious to block the Voice Stream Communications planned purchase by Deutsche Telekom, a German government-owned phone monopoly. We have not yet heard the last of this international trade fight.
The British also have refused to allow any additional American flights into London. In the old days the British decided these problems, under the WTO the United States will surely file suit and try to get a favorable ruling in this area thus ratcheting up the trade war.
Americans are especially unhappy with the French who have refused to eliminate their farm subsidies–like we don’t have any in this country.
The one group of Americans that seem to get little attention are those importers whose businesses depend on imports and thus get hit by huge tariffs. When 100 to 200 percent tariffs are placed on an imported product, this virtually puts these corporations out of business.
The one thing for certain is this process is not free trade; this is international managed trade by an international governmental body. The odds of coming up with fair trade or free trade under WTO are zero. Unfortunately, even in the language most commonly used in the Congress in promoting ‘free trade’ it usually involves not only international government managed trade but subsidies as well, such as those obtained through the Import/Export Bank and the Overseas Private Investment Corporation and various other methods such as the Foreign Aid and our military budget.
Lastly, despite a Constitution which vests in the House authority for regulating foreign commerce (and raising revenue, i.e. taxation), this bill unconstitutionally delegates to the President the ‘authority’ to, by Executive order, suspend the tax break by designating certain property ‘in short supply.’ Any property so designated shall not be treated as qualifying foreign trade property during the period beginning with the date specified in the Executive order.
Free trade should be our goal. We should trade with as many nations as possible. We should keep our tariffs as low as possible since tariffs are taxes and it is true that the people we trade with we are less likely to fight with. There are many good sound, economic and moral reasons why we should be engaged in free trade. But managed trade by the WTO does not qualify for that definition.
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November 13th, 2000
Mr. Speaker, the financial markets are now nervously watching the impasse now reached in the Presidential election. Many commentators have already claimed the most recent drop in the market is a consequence of the uncertainty about the outcome of the election. Although it would be a mistake to totally dismiss the influence of the election uncertainty as a factor in the economy, it must be made clear that the markets and the economy are driven by something much more basic. We know that the markets have been off significantly for the past several months, and this drop was not related in any way to the Presidential election.
Confidence is an important factor in the way markets work, and certainly the confusion in the Presidential election does not convey confidence to investors and to the rest of the world.
Mises, the great 20th century economist, predicted decades before the fall of the Soviet system that socialism was unworkable and would collapse upon itself. Although he did not live to see it, he would not have been surprised to witness the events of 1989 with the collapse of the entire Communist-Soviet system. Likewise, the interventionist-welfare system endorsed by the West, including the United States, is unworkable. Even without the current problems in the Presidential election, signs of an impasse within our system were evident. Inevitably, a system that decides almost everything through pure democracy will sharply alienate two groups: the producers, and the recipients of the goods distributed by the popularly elected congresses. Our system is not only unfairly designed to take care of those who do not work, it also rewards the powerful and influential who can gain control of the government apparatus. Control over government contracts, the military industrial complex and the use of our military to protect financial interests overseas is worth great sums of money to the special interests in power.
Even though it is argued that there are huge budget surpluses in Washington, instead of budget compromise, a stalemate results. Each side wants even a greater share of the loot being distributed by the politicians. Even with the windfall revenues, no serious suggestion is made in Washington for cuts in spending. Instead of moving toward a market economy and less dependency on the federal government in the midst of this so-called ‘prosperity,’ we continue to go World Trade Organization, the International Monetary Fund, and the World Bank. Although in the early stages of interventionism and government planning, especially when a great deal of wealth is available for redistribution, it seems to enhance prosperity while prolonging the financial bubble on which the economy is dependent. The monetary system, both our domestic system as well as the international fiat system, plays a key role in the artificial prosperity based on inflated currencies as well as debt and speculation.
The pretended goal of the economic planners has been economic fairness through redistribution of wealth, politically correct social consciousness, and an all-intrusive government which becomes a responsibility for personal safety, health and education while personal responsibility is diminished. The goal of liberty has long been forgotten. The concentrated effort has been to gain power through the control of wealth with a scheme that pretends to treat everybody fairly. An impasse was destined to come, and already signs are present in our system of welfarism. This election in many ways politically demonstrates this economic reality. The political stalemate reflects the stalemate that is developing in the economy. Both will eventually cause deep division and hardship. The real problem-preserving of the free market and private property rights- if ignored, will only make things worse, because the only solution that will be offered in Washington will be more government intervention, increased spending, increase in monetary inflation, more debt, greater military activity throughout the world, and priming the economic pump with more expenditures for weapons we do not need.
We have already seen signs of economic troubles ahead . Although the Fed plans for only a slight slow down and a so-called ‘soft landing,’ the correction from the monetary mischief of the last 10 years has already been determined. Although the dollar currently remains strong, because other currencies are so weak, there is a limitation on how long we can create new dollars without them being devalued. A weaker dollar will surely come in our not too distant future. Our huge current account deficit and trade imbalances warn us of that day.
Government statistics continue to tell us that price inflation is not a problem, and when an inflation statistic comes out it does not like, it drops out food and energy and claims the number is totally benign. Ask any housewife, and they will tell you that the cost of living is going up steadily and much more rapidly than the government will admit. We in the Congress should be prepared for lower revenues in the future since the revenues received in the last couple of years were artificially created by a stock market that had skyrocketed due to the credit expansion by the Federal Reserve. These capital gains tax revenues will soon disappear. The savings rates of the American people are now negative. Without savings, true capital investment cannot be maintained. Creation of credit out of thin air by the Fed was the original problem, so it surely can’t be the solution.
Even in the midst of our great imaginary budgetary surpluses, there has been no effort to cut. Once the economy tends to slow and more problems are apparent, expenditures are going to soar not only because of future problems but because of the new programs recently initiated. A huge financial bubble has been created by the GSEs, such as Fannie Mae and Freddie Mac. The $33 billion of shareholder equities in these two organizations has been leveraged into $1.07 trillion worth of assets- a bubble waiting to be pricked. The Congress has reacted to all these events irresponsibly by increasing spending, increasing tax revenues, doing nothing to reduce regulations, and being totally apathetic toward the dollar and monetary policy. We in the Congress have a moral and constitutional obligation to protect the value of the dollar and to understand why it is so important to the economy that a central bank not be given the unbelievable power of inflating a currency at will and pretending that it knows how to find tune an economy through this counterfeit system of money.
Rising interest rates in the high yield bond market is giving us an indication that a serious problem is just around the bend. Commercial debt was but $50 billion in 1994 and is now ten times higher now at $551 billion. The money supply is now growing at greater than a 10% rate and the derivatives market, although difficult to calculate, probably exceeds $75 trillion. We also have consumer debt, which is at record highs and has not yet shown signs of slowing. The Dow Jones Industrial Average stocks are now 5 times book value, the highest in over a hundred years. There will come a day when most people come to realize the fraud associated with Social Security and the inability for it to continue as currently managed. Rising oil and natural gas prices, it is argued, are not inflationary, yet they are playing havoc with the pocketbooks of most Americans. The economies of Asia, and in particular Japan, will not offer any assistance in dealing with the approaching storm in this country. Our foreign policy, which continues to obligate our support around the world, shows no signs of changing and will contribute to the crisis and possibly our bankruptcy.
What must we do? We should develop more sensible priorities. We must restore confidence in freedom and recognize how free markets can solve our problems . We must have more respect for the Rule of Law and demand that Congress, the Courts, and the President live within the Rule of Law and stop arbitrarily flaunting the Constitution. If the Constitution is to be changed, it should be changed slowly and deliberately as is permitted, but never by fiat. We must eventually reconsider the notion of the original constitutional Republic as designed by our Founders. The monolithic centralized state was not the design nor is it supported by the Constitution. We were meant to have loose knit individual states, with the states themselves managing their own affairs.
The political impasse we now see with the election process, along with the divisions in the House and Senate, is surely related to the economic and budgetary impasse that plagues Washington. Since interventionism (the planned welfare state) is unworkable and will fail, the surprising developments in this presidential election will accelerate its demise. The two are obviously related.
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November 3rd, 2000
Washington, D.C- Congressman Ron Paul has been honored again for his anti-tax voting record in the 106th Congress. The National Tax Limitation Committee recently presented Paul with the “Taxfighter Award,” which it grants every two years to members of Congress who demonstrate a consistent record of voting for fiscal responsibility and lower taxes. The award follows similar recognition given to Paul earlier this year by organizations such as the National Taxpayers Union, Taxpayers for Common Sense, and Citizens against Government Waste.
“Congressman Paul deserves our top honor because of his votes on key tax and spending issues,” stated Committee President Lewis K. Uhler. “He earned an ‘A’ grade, qualifying him for the ‘Taxfighter’ award. Moreover, Dr. Paul has the distinction of having won the award during each session of Congress since his arrival on the Washington scene. He has led the battle to eliminate the death (estate) tax and the marriage penalty tax. We look forward to working with him in the next Congress.”
The nonpartisan National Tax Limitation Committee works in Washington D.C. and across the nation to limit taxes and spending. The organization compiles a voting scorecard for Congress based on key votes, establishing a “fiscal responsibility” score for each member. Congressman Paul scored above 90%, ranking him near the top of all legislators and demonstrating his unwavering commitment to reduced taxes.
“I’m happy to receive this award,” Paul stated. “I think the Committee’s scorecard provides an excellent litmus test for Congress. It tells my constituents a great deal about my attitude and philosophy towards the proper role and size of the federal government. Most of the mischief that goes on in Washington could be eliminated if Congress simply reduced taxes. Without its bloated budget, Congress could not fund all of the unconstitutional activities of the federal government. Congress needs to respect the Constitution and show restraint when it comes to spending the taxpayers’ money.”
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