February 21st, 2007
Washington, DC: Congressman Ron Paul has been recognized as a top advocate for taxpayers in the U.S. Congress for the tenth year in a row, earning the nonpartisan National Taxpayers Union’s annual award as a “Taxpayers’ Friend” for 2006. Only 30 of 435 members in the U.S. House of Representatives earned similar honors last year.
The annual NTU rating is based on critical congressional votes relating to federal tax, spending, and regulatory issues. Paul consistently ranks at or near the top of NTU’s scorecard in terms of his pro-taxpayer votes.
Overall, however, Congress is slipping when it comes to serving the least-represented special interest of all – American taxpayers.
“If every member of Congress voted like Representative Paul, Americans could enjoy much lower taxes and less waste in government,” stated NTU President John Berthoud. “Overburdened taxpayers in Texas and across the nation owe Mr. Paul a debt of gratitude for his hard work on their behalf.”
“While many Members of Congress talk about reducing the size of government, Representative Paul backed up those words with votes. This award proves that he/she is a consistent and effective ally in our battle to restore fiscal responsibility to Washington.”
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February 15th, 2007
<br />
Statement before the Financial Services Committee, “Monetary Policy<br />
and the State of the Economy”<br />
Transparency in monetary policy is a goal we should all support. I’ve often wondered why Congress so willingly has given up its prerogative over monetary policy. Astonishingly, Congress in essence has ceded total control over the value of our money to a secretive central bank.
Congress created the Federal Reserve, yet it had no constitutional authority to do so. We forget that those powers not explicitly granted to Congress by the Constitution are inherently denied to Congress– and thus the authority to establish a central bank never was given. Of course Jefferson and Hamilton had that debate early on, a debate seemingly settled in 1913.
But transparency and oversight are something else, and they’re worth considering. Congress, although not by law, essentially has given up all its oversight responsibility over the Federal Reserve. There are no true audits, and Congress knows nothing of the conversations, plans, and actions taken in concert with other central banks. We get less and less information regarding the money supply each year, especially now that M3 is no longer reported.
The role the Fed plays in the President’s secretive Working Group on Financial Markets goes unnoticed by members of Congress. The Federal Reserve shows no willingness to inform Congress voluntarily about how often the Working Group meets, what actions it takes that affect the financial markets, or why it takes those actions.
But these actions, directed by the Federal Reserve, alter the purchasing power of our money. And that purchasing power is always reduced. The dollar today is worth only four cents compared to the dollar in 1913, when the Federal Reserve started. This has profound consequences for our economy and our political stability. All paper currencies are vulnerable to collapse, and history is replete with examples of great suffering caused by such collapses, especially to a nation’s poor and middle class. This leads to political turmoil.
Even before a currency collapse occurs, the damage done by a fiat system is significant. Our monetary system insidiously transfers wealth from the poor and middle class to the privileged rich.Wages never keep up with the profits of Wall Street and the banks, thus sowing the seeds of class discontent. When economic trouble hits, free markets and free trade often are blamed, while the harmful effects of a fiat monetary system are ignored. We deceive ourselves that all is well with the economy, and ignore the fundamental flaws that are a source of growing discontent among those who have not shared in the abundance of recent years.
Few understand that our consumption and apparent wealth is dependent on a current account deficit of $800 billion per year. This deficit shows that much of our prosperity is based on borrowing rather than a true increase in production. Statistics show year after year that our productive manufacturing jobs continue to go overseas. This phenomenon is not seen as a consequence of the international fiat monetary system, where the United States government benefits as the issuer of the world’s reserve currency.
Government officials consistently claim that inflation is in check at barely 2%, but middle class Americans know that their purchasing power–especially when it comes to housing, energy, medical care, and school tuition– is shrinking much faster than 2% each year.
Even if prices were held in check, in spite of our monetary inflation, concentrating on CPI distracts from the real issue. We must address the important consequences of Fed manipulation of interest rates. When interests rates are artificially low, below market rates, insidious mal-investment and excessive indebtedness inevitably bring about the economic downturn that everyone dreads.
We look at GDP numbers to reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the higher standard of living that monetary inflation brings to the privileged few. Those few have access to the newly created money first, before its value is diluted.
For example:Before the breakdown of the Bretton Woods system, CEO income was about 30 times the average worker’s pay.Today, it’s closer to 500 times. It’s hard to explain this simply by market forces and increases in productivity. One Wall Street firm last year gave out bonuses totaling $16.5 billion. There’s little evidence that this represents free market capitalism.
In 2006 dollars, the minimum wage was $9.50 before the 1971 breakdown of Bretton Woods. Today that dollar is worth $5.15. Congress congratulates itself for raising the minimum wage by mandate, but in reality it has lowered the minimum wage by allowing the Fed to devalue the dollar. We must consider how the growing inequalities created by our monetary system will lead to social discord.
GDP purportedly is now growing at 3.5%, and everyone seems pleased. What we fail to understand is how much government entitlement spending contributes to the increase in the GDP. Rebuilding infrastructure destroyed by hurricanes, which simply gets us back to even, is considered part of GDP growth. Wall Street profits and salaries, pumped up by the Fed’s increase in money, also contribute to GDP statistical growth. Just buying military weapons that contribute nothing to the well being of our citizens, sending money down a rat hole, contributes to GDP growth! Simple price increases caused by Fed monetary inflation contribute to nominal GDP growth.None of these factors represent any kind of real increases in economic output. So we should not carelessly cite misleading GDP figures which don’t truly reflect what is happening in the economy. Bogus GDP figures explain in part why so many people are feeling squeezed despite our supposedly booming economy.
But since our fiat dollar system is not going away anytime soon, it would benefit Congress and the American people to bring more transparency to how and why Fed monetary policy functions.
For starters, the Federal Reserve should:
Begin publishing the M3 statistics again. Let us see the numbers that most accurately reveal how much new money the Fed is pumping into the world economy.
Tell us exactly what the President’s Working Group on Financial Markets does and why.
Explain how interest rates are set. Conservatives profess to support free markets, without wage and price controls. Yet the most important price of all, the price of money as determined by interest rates, is set arbitrarily in secret by the Fed rather than by markets! Why is this policy written in stone? Why is there no congressional input at least?
Change legal tender laws to allow constitutional legal tender (commodity money) to compete domestically with the dollar.
How can a policy of steadily debasing our currency be defended morally, knowing what harm it causes to those who still believe in saving money and assuming responsibility for themselves in their retirement years? Is it any wonder we are a nation of debtors rather than savers?
We need more transparency in how the Federal Reserve carries out monetary policy, and we need it soon.
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February 14th, 2007
<br />
Statement on the Iraq War Resolution<br />
This grand debate is welcomed but it could be that this is nothing more than a distraction from the dangerous military confrontation approaching with Iran and supported by many in leadership on both sides of the aisle.
This resolution, unfortunately, does not address the disaster in Iraq. Instead, it seeks to appear opposed to the war while at the same time offering no change of the status quo in Iraq. As such, it is not actually a vote against a troop surge. A real vote against a troop surge is a vote against the coming supplemental appropriation that finances it. I hope all of my colleagues who vote against the surge today will vote against the budgetary surge when it really counts: when we vote on the supplemental.
The biggest red herring in this debate is the constant innuendo that those who don’t support expanding the war are somehow opposing the troops. It’s nothing more than a canard to claim that those of us who struggled to prevent the bloodshed and now want it stopped are somehow less patriotic and less concerned about the welfare of our military personnel.
Osama bin Laden has expressed sadistic pleasure with our invasion of Iraq and was surprised that we served his interests above and beyond his dreams on how we responded after the 9/11 attacks. His pleasure comes from our policy of folly getting ourselves bogged down in the middle of a religious civil war, 7,000 miles from home that is financially bleeding us to death.Total costs now are reasonably estimated to exceed $2 trillion. His recruitment of Islamic extremists has been greatly enhanced by our occupation of Iraq.
Unfortunately, we continue to concentrate on the obvious mismanagement of a war promoted by false information and ignore debating the real issue which is: Why are we determined to follow a foreign policy of empire building and pre-emption which is unbecoming of a constitutional republic?
Those on the right should recall that the traditional conservative position of non-intervention was their position for most of the 20 th Century-and they benefited politically from the wars carelessly entered into by the political left. Seven years ago the Right benefited politically by condemning the illegal intervention in Kosovo and Somalia.At the time conservatives were outraged over the failed policy of nation building.
It’s important to recall that the left, in 2003, offered little opposition to the pre-emptive war in Iraq, and many are now not willing to stop it by de-funding it or work to prevent an attack on Iran.
The catch-all phrase, “War on Terrorism”, in all honesty, has no more meaning than if one wants to wage a war against criminal gangsterism. It’s deliberately vague and non definable to justify and permit perpetual war anywhere, and under any circumstances. Don’t forget: the Iraqis and Saddam Hussein had absolutely nothing to do with any terrorist attack against us including that on 9/11.
Special interests and the demented philosophy of conquest have driven most wars throughout history. Rarely has the cause of liberty, as it was in our own revolution, been the driving force. In recent decades our policies have been driven by neo-conservative empire radicalism, profiteering in the military industrial complex, misplaced do-good internationalism, mercantilistic notions regarding the need to control natural resources, and blind loyalty to various governments in the Middle East.
For all the misinformation given the American people to justify our invasion, such as our need for national security, enforcing UN resolutions, removing a dictator, establishing a democracy, protecting our oil, the argument has been reduced to this:If we leave now Iraq will be left in a mess-implying the implausible that if we stay it won’t be a mess.
Since it could go badly when we leave, that blame must be placed on those who took us there, not on those of us who now insist that Americans no longer need be killed or maimed and that Americans no longer need to kill any more Iraqis. We’ve had enough of both!
Resorting to a medical analogy, a wrong diagnosis was made at the beginning of the war and the wrong treatment was prescribed. Refusing to reassess our mistakes and insist on just more and more of a failed remedy is destined to kill the patient-in this case the casualties will be our liberties and prosperity here at home and peace abroad.
There’s no logical reason to reject the restraints placed in the Constitution regarding our engaging in foreign conflicts unrelated to our national security. The advice of the founders and our early presidents was sound then and it’s sound today.
We shouldn’t wait until our financial system is completely ruined and we are forced to change our ways. We should do it as quickly as possible and stop the carnage and financial bleeding that will bring us to our knees and force us to stop that which we should have never started. We all know, in time, the war will be de-funded one way or another and the troops will come home. So why not now?
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February 6th, 2007
<br />
Don’t Do It, Mr. President<br />
It’s a bad idea.
There’s no need for it.
There’s great danger in doing it.
America is against it, and Congress should be.
The United Nations is against it.
The Russians, the Chinese, the Indians, and the Pakistanis are against it.
The whole world is against it.
Our allies are against it.
Our enemies are against it.
The Arabs are against it.
The Europeans are against it.
The Muslims are against it.
We don’t need to do this.
The threat is overblown.
The plan is an hysterical reaction to a problem that does not yet exist.
Hysteria is never a good basis for foreign policy.
Don’t we ever learn?
Have we already forgotten Iraq?
The plan defies common sense.
If it’s carried out, the Middle East, and possibly the world, will explode.
Oil will soar to over $100 a barrel, and gasoline will be over $5 a gallon.
Despite what some think, it won’t serve the interests of Israel.
Besides– it’s illegal.
It’s unconstitutional.
And you have no moral authority to do it.
We don’t need it.
We don’t want it.
So, Mr. President, don’t do it.
Don’t bomb Iran!
The moral of the story, Mr. Speaker, is this: if you don’t have a nuke, we’ll threaten to attack you. If you do have a nuke, we’ll leave you alone. In fact, we’ll probably subsidize you. What makes us think Iran does not understand this?
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