July 30th, 2008
Madam Speaker, I rise in opposition to this resolution, which is yet another meaningless but provocative condemnation of China . It is this kind of jingoism that has led to such a low opinion of the United States abroad. Certainly I do not condone human rights abuses, wherever they may occur, but as Members of the US House of Representatives we have no authority over the Chinese government. It is our Constitutional responsibility to deal with abuses in our own country or those created abroad by our own foreign policies. Yet we are not debating a bill to close Guantanamo , where abuses have been documented. We are not debating a bill to withdraw from Iraq , where scores of innocents have been killed, injured, and abused due to our unprovoked attack on that country. We are not debating a bill to reverse the odious FISA bill passed recently which will result in extreme abuses of Americans by gutting the Fourth Amendment.
Instead of addressing these and scores of other pressing issues over which we do have authority, we prefer to spend our time criticizing a foreign government over which we have no authority and foreign domestic problems about which we have very little accurate information.
I do find it ironic that this resolution “calls on the Government of the People’s Republic of China to begin earnest negotiations, without preconditions, directly with His Holiness the Dalai Lama or his representatives.” For years US policy has been that no meeting or negotiation could take place with Iran until certain preconditions are met by Iran . Among these is a demand that Iran cease uranium enrichment, which Iran has the right to do under the terms of the Non-Proliferation Treaty. It is little wonder why some claim that resolutions like this are hypocritical.
Instead of lecturing China, where I have no doubt there are problems as there are everywhere, I would suggest that we turn our attention to the very real threats in a United States where our civil liberties and human rights are being eroded on a steady basis. The Bible cautions against pointing out the speck in a neighbor’s eye while ignoring the log in one’s own. I suggest we contemplate this sound advice before bringing up such ill-conceived resolutions in the future.
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July 30th, 2008
Madam Speaker, I rise in support of this legislation, which will bar the collection of co-payments from veterans for hospital and nursing home care if the veteran is considered catastrophically disabled. I strongly advocate a noninterventionist foreign policy that would result in far fewer wars and, thankfully, far fewer catastrophically disabled veterans. But I also strongly believe that we must take care of those veterans who have been so severely wounded or otherwise disabled. Too often those who are most vocal in support of foreign military action are most silent when it comes time to take care of those who have paid a very high price for these actions. This legislation will provide at least a little relief to the most seriously injured veterans.
I am concerned, however, that this bill incorporates language from HR 6114, which rescinds a current law requirement that the VA obtain a signed consent form from a veteran before conducting an HIV test. We have seen veterans punished severely for attempting to avoid the required but controversial myriad of inoculations they are required to receive. Now we see that they will have less control over what medical tests to which they might be subjected. I am concerned over this loss of control over one’s healthcare decisions among those who voluntarily join the military, and I urge the adoption of a more flexible policy. I would also urge my colleagues and the American people to contemplate this deprivation of medical and privacy rights on a massive scale should we ever reinstate the draft. I believe taking care of veterans should include both providing promised benefits and protecting their privacy rights.
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July 24th, 2008
The root of our current economic malaise, the weak dollar, the high price of oil, and the collapse of the housing market, comes about because almost no one understands what inflation is. Inflation is an increase in the money supply, which occurs by various methods, the printing of currency, low reserve requirements, Federal Reserve open market operations, etc.
In Germany in the 1920s, South America in the 1980s, and Zimbabwe today, everyone recognizes that inflation was caused by the government running the printing presses non-stop, with the resulting exponential rise in prices being the necessary result of monetary growth. Yet somehow, both the empirical and theoretical reality of inflation as a rise in money supply is ignored in this country. Inflation is conflated with price inflation, the increase in the overall price level, and is viewed as something both endogenous to the market economy while at the same time influenced by exogenous price shocks.
Because no one understands that inflation is growth in the monetary supply, no one is able to combat it effectively. We hear all sorts of hand-wringing about increasing inflation, and all sorts of explanations about how rising oil and food prices will make inflation worse. At the same time, the fact that MZM, the closest approximation to total money supply that still is reported by the Fed, is still rising by almost 15% per year and that M2 is rising significantly as well is quietly ignored. The pundits have causation backwards, it is inflation that leads to rising prices of oil and food, and not vice versa.
Until the cause of inflation is understood, no effective strategy can be undertaken to combat it. The problem, however, is that the government does not want inflation to be done away with. Inflation benefits debtors and harms creditors, and the United States government is the biggest debtor of all. The United States government, the banking monopoly under the Federal Reserve System, and politically-connected firms and industries are the first entities to take advantage of new money injected into the system, before prices increase. As the increased supply of money begins to chase the same number of goods, prices rise, and the average American suffers. Poor and middle class Americans are always the hardest hit by inflation, as the weakening dollar makes the imported goods that many Americans depend on more expensive.
As Chairman Bernanke admitted last week, inflation is a tax, and it is the most pernicious because of its hidden nature. It taxes the very purchasing power of money, and because the inflation rate in recent years has generally been low, its effects often take a while to manifest themselves. Now that inflation is beginning to rise, more and more rhetoric is being spun to hide the government’s role in creating inflation. I applaud Chairman Frank for holding this hearing, as hearings such as this one investigating the link between the weak dollar and the high price of oil are more important now than ever.
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July 24th, 2008
Madam Speaker, For several years, followers of the Austrian school of economics have warned that unless Congress moved to end the implicit government guarantee of Fannie Mae and Freddie Mac, and took other steps to disengage the US Government from the housing market, America would face a crisis in housing. This crisis would force Congress to chose between authorizing a taxpayer bailout of Fannie and Freddie, and other measures increasing government’s involvement in housing, or restoring a free-market in housing by ending government support for Fannie and Freddie and repealing all laws that interfere in housing. The bursting of the housing bubble, and the recent near-collapse in investor support for Fannie and Freddie has proven my fellow Austrians correct. Unfortunately, but not surprisingly, instead of ending the prior interventions in the housing market that are responsible for the current crisis, Congress is increasing the level of government intervention in the housing market. This is the equivalent of giving a drug addict another fix, which will only make the necessary withdrawal more painful.
The provision giving the Treasury Secretary a blank check to purchase Fannie and Freddie stock not only makes the implicit government guarantee of Fannie and Freddie explicit, it represents another unconstitutional delegation of Congress’ Constitutional authority to control the allocation of taxpayer dollars. While the Treasury Secretary has to file a report with Congress, the lack of any effective standards for the expenditure of funds makes it impossible for Congress to perform effective oversight on Treasury’s expenditures.
HR 3221 also takes another troubling step toward the creation of surveillance state by creating a Nationwide Mortgage Licensing System and Registry. This federal database will contain personal information about anyone wishing to work as a “loan originator.” “Loan originator” is defined broadly as anyone who “takes a residential loan application; and offers or negotiates terms of a residential mortgage loan for compensation or gain.” According to some analysts, this definition is so broad as to cover part-time clerks and real estate agents who receive even minimal compensation from “originators.” Additionally, this database forced on industry will be funded by fees paid to the federal banking agencies, yet another costly burden to the American taxpayers.
Among the information that will be collected from loan originators for inclusion in the federal database are fingerprints. Madam Speaker, giving the federal government the power to force Americans who wish to work in real estate to submit their fingerprints to a federal database opens the door to numerous abuses of privacy and civil liberties and establishes a dangerous precedent. Fingerprint databases and background checks have been no deterrent to espionage and fraud among governmental agencies, and will likewise fail to prevent fraud in the real estate market. I am amazed to see some members who are usually outspoken advocates of civil liberties and defenders of the Fourth Amendment support this new threat to privacy.
Finally, HR 3221 increases the federal debt limit by $800 billion. We are told that CBO has scored this bill at a cost of $25 billion, but this debt limit increase belies that. The Federal Reserve has already propped up the housing and financial markets to the tune of over $300 billion, and this raise of the debt limit indicates that the cost of this newest bailout will likely be even more costly. I am dismayed that my colleagues have not learned the lessons of the Patriot Act and Sarbanes-Oxley. Massive bills passed in knee-jerk reaction to crisis events will always be poorly written, burdensome and expensive to taxpayers, and destructive of liberty.
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July 24th, 2008
Mr. Speaker, I rise in opposition to this irresponsible legislation, which will ship $48 billion overseas as foreign aid at a time when Americans are feeling the pressure of rapidly increasing inflation and a weakened dollar. It is particularly objectionable to ship money to fund healthcare overseas when so many Americans either struggle with high healthcare costs or avoid seeking medical assistance altogether due to lack of insurance or funds.
As we know, the federal government does not have $48 billion to send overseas so it will have to print the money. It is a cruel irony that this will add to inflation at home which will increase even further the costs of healthcare in the United States .
Mr. Speaker, I am saddened by the prevalence of disease in impoverished countries overseas. I certainly encourage every American concerned about HIV/AIDS, tuberculosis, and malaria overseas to voluntarily provide assistance to help alleviate the problem. But I do not believe it is appropriate — nor is it Constitutional — to forcibly take money from American citizens to send abroad. I urge my colleagues to reject this and all foreign aid legislation.
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July 22nd, 2008
Washington , DC – Last month Congressman Ron Paul, ranking member of the Subcommittee on Domestic and International Monetary Policy called for a hearing on the relationship between the falling value of the dollar and the recent rise of oil prices, noting:
“The price of oil is currently among the most pressing issues to American workers. Congress should be examining all factors contributing to the high cost of oil, and monetary policy is one of the key factors in the run-up in price.”
That hearing request has been granted and scheduled for July 24 at 2:00pm.
Besides himself, 16 other Representatives signed on to the letter, including ranking member of the House Committee on Financial Services Spencer Bachus, and Chairman of the Republican Study Committee Rep. Jeb Hensarling.
Confirmed witnesses will be:
- Economist Walter J. Williams, of ShadowStats.com which examines government economic reporting.
- Economist Robert Murphy of the Institute for Energy Research
- Economist C. Fred Bergsten, Director of the Peterson Institute
- Dr. Joseph Kasputys of Global Insight, Inc.
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July 16th, 2008
Mr. Chairman, today we find ourselves on the verge of an economic crisis the likes of which the United States has not seen in decades. Our economy is very clearly in a recession, and every time someone tells us that the worst has passed, another serious event takes place, as we saw once again last week and early this week. Everyone now realizes that the situation is dire, yet either no one understands the cause behind the credit crisis, or no one is willing to take the necessary steps to ensure as orderly an end to the crisis as possible. Instead, we hear talk of further bailouts. The Fed-brokered takeover of Bear Stearns, a supposed one-off incident, has now been joined by a potential bailout of the Government-Sponsored Enterprises, Fannie Mae and Freddie Mac.
The two GSE’s have been disasters waiting to happen, as I and many others have warned over the years. It was bad enough that Fannie and Freddie were able to operate with significant advantages, such as lower borrowing costs and designation of their debt as government debt. Now, the implicit government backstop has turned out to be an explicit backstop, just as we feared. The Greenspan reflation of the economy after the dot-com bust pumped additional liquidity into an already-skewed housing market, leading to an unsustainable boom that from many accounts has only begun to unravel. With a current federal funds rate of two percent, and inflation at over four percent, the Fed is currently sowing the seeds for another economic bubble.
At the heart of this economic malaise is the Fed’s poor stewardship of the dollar. The cause of the dollar’s demise is not the result of a purely psychological response to public statements on US dollar policy, but is rather a reaction to a massive increase in the money supply brought about by the Federal Reserve’s loose monetary policy. The policies that led to hemorrhaging of gold during the 1960’s and the eventual closing of the gold standard are the same policies that are leading to the dollar’s decline in international currency markets today. Foreign governments no longer wish to hold depreciating dollars, and would prefer to hold stronger currencies such as the euro. Foreign investors no longer wish to hold underperforming dollars, and seek to hold better-performing assets such as ports and beer companies.
Every government bailout or promise thereof leads to moral hazard, the likelihood that market actors will take ever riskier actions with the belief that the federal government will bail them out. Bear Stearns was bailed out, Fannie and Freddie will be bailed out, but where will the line be drawn? The precedent has been established and the taxpayers will end up footing the bill in these cases, but the federal government and the Federal Reserve lack the resources to bail out every firm that is deemed “too big to fail.” Decades of loose monetary policy will lead to a financial day of reckoning, and bailouts, liquidity injections, and lowering of the federal funds rate will only delay the inevitable and ensure that the final correction will be longer and more severe than it otherwise would. For the sake of the economy, I urge my colleagues to resist the temptation to give in to political expediency, and to oppose loose monetary policy and any further bailouts.
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July 15th, 2008
Madam Speaker, as one who is most consistently opposed to war and violence, I join my colleagues in condemning the brutal and unjustified attack on a Jewish community center in Argentina 14 years ago. I do not support this resolution, however, as it misuses a tragedy 14 years ago in a foreign country to push for US war against Iran today.
Although this resolution clearly blames Iran and Hezbollah for the bombing, in fact the investigation is ongoing and far from conclusive. In an article titled “ U.S. uses probe to pressure Iran ,” the Wall Street Journal earlier this year suggested that renewed US interest in this 14 year old case is more related to politics than a genuine desire for justice. Reported the Journal,
“As tensions between the U.S. and Iran persist, Washington and its allies are using an investigation into a 1994 terrorist attack in Argentina to maintain pressure on the Iranian regime.
“Behind the scenes, Bush administration officials are encouraging the probe, which centers on the bombing of a Jewish community center in Buenos Aires . One U.S. goal is to cause legal problems for some of Iran ’s political leaders. Administration officials also hope to use the matter to highlight Iran ’s alleged role in financing and supporting terrorism around the world.”
Those pushing for a US attack on Iran are using this tragic event to foment fear in the United States that Iran and Hezbollah are perpetrating terrorist acts in the Western Hemisphere . This is another in an ongoing series of resolutions we see on the House floor pushing us toward war against Iran . I have no doubt that we will see another similar resolution on the floor next week, and the week after, and so on until we find ourselves making another tragic mistake as we did in 2002 with H J Res 114 giving the president the authority to attack Iraq.
I urge my colleagues to resist this push to war with Iran before it is too late.
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July 9th, 2008
Madam Speaker, I have, for the past 35 years, expressed my grave concern for the future of America . The course we have taken over the past century has threatened our liberties, security and prosperity. In spite of these long-held concerns, I have days–growing more frequent all the time–when I’m convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.
Though the world has long suffered from the senselessness of wars that should have been avoided, my greatest fear is that the course on which we find ourselves will bring even greater conflict and economic suffering to the innocent people of the world–unless we quickly change our ways.
America , with her traditions of free markets and property rights, led the way toward great wealth and progress throughout the world as well as at home. Since we have lost our confidence in the principles of liberty, self reliance, hard work and frugality, and instead took on empire building, financed through inflation and debt, all this has changed. This is indeed frightening and an historic event.
The problem we face is not new in history. Authoritarianism has been around a long time. For centuries, inflation and debt have been used by tyrants to hold power, promote aggression, and provide “bread and circuses” for the people. The notion that a country can afford “guns and butter” with no significant penalty existed even before the 1960s when it became a popular slogan. It was then, though, we were told the Vietnam War and the massive expansion of the welfare state were not problems. The seventies proved that assumption wrong.
Today things are different from even ancient times or the 1970s. There is something to the argument that we are now a global economy. The world has more people and is more integrated due to modern technology, communications, and travel. If modern technology had been used to promote the ideas of liberty, free markets, sound money and trade, it would have ushered in a new golden age–a globalism we could accept.
Instead, the wealth and freedom we now enjoy are shrinking and rest upon a fragile philosophic infrastructure. It is not unlike the levies and bridges in our own country that our system of war and welfare has caused us to ignore.
I’m fearful that my concerns have been legitimate and may even be worse than I first thought. They are now at our doorstep. Time is short for making a course correction before this grand experiment in liberty goes into deep hibernation.
There are reasons to believe this coming crisis is different and bigger than the world has ever experienced. Instead of using globalism in a positive fashion, it’s been used to globalize all of the mistakes of the politicians, bureaucrats and central bankers.
Being an unchallenged sole superpower was never accepted by us with a sense of humility and respect. Our arrogance and aggressiveness have been used to promote a world empire backed by the most powerful army of history. This type of globalist intervention creates problems for all citizens of the world and fails to contribute to the well-being of the world’s populations. Just think how our personal liberties have been trashed here at home in the last decade.
The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical-care costs; the collapse of the housing bubble; the bursting of the NASDAQ bubble; stock markets plunging; unemployment rising; massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we’ll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression?
There are various reasons that the world economy has been globalized and the problems we face are worldwide. We cannot understand what we’re facing without understanding fiat money and the long-developing dollar bubble.
There were several stages. From the inception of the Federal Reserve System in 1913 to 1933, the Central Bank established itself as the official dollar manager. By 1933, Americans could no longer own gold, thus removing restraint on the Federal Reserve to inflate for war and welfare.
By 1945, further restraints were removed by creating the Bretton-Woods Monetary System making the dollar the reserve currency of the world. This system lasted up until 1971. During the period between 1945 and 1971, some restraints on the Fed remained in place. Foreigners, but not Americans, could convert dollars to gold at $35 an ounce. Due to the excessive dollars being created, that system came to an end in 1971.
It’s the post Bretton-Woods system that was responsible for globalizing inflation and markets and for generating a gigantic worldwide dollar bubble. That bubble is now bursting, and we’re seeing what it’s like to suffer the consequences of the many previous economic errors.
Ironically in these past 35 years, we have benefited from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas (indirectly encouraging our jobs to go overseas as well) and enjoy unearned prosperity. Those who took our dollars and gave us goods and services were only too anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we now are starting to see.
But it was never destined to last, and now we have to pay the piper. Our huge foreign debt must be paid or liquidated. Our entitlements are coming due just as the world has become more reluctant to hold dollars. The consequence of that decision is price inflation in this country–and that’s what we are witnessing today. Already price inflation overseas is even higher than here at home as a consequence of foreign central banks’ willingness to monetize our debt.
Printing dollars over long periods of time may not immediately push prices up–yet in time it always does. Now we’re seeing catch-up for past inflating of the monetary supply. As bad as it is today with $4 a gallon gasoline, this is just the beginning. It’s a gross distraction to hound away at “drill, drill, drill” as a solution to the dollar crisis and high gasoline prices. Its okay to let the market increase supplies and drill, but that issue is a gross distraction from the sins of deficits and Federal Reserve monetary shenanigans.
This bubble is different and bigger for another reason. The central banks of the world secretly collude to centrally plan the world economy. I’m convinced that agreements among central banks to “monetize” U.S. debt these past 15 years have existed, although secretly and out of the reach of any oversight of anyone–especially the U.S. Congress that doesn’t care, or just flat doesn’t understand. As this “gift” to us comes to an end, our problems worsen. The central banks and the various governments are very powerful, but eventually the markets overwhelm when the people who get stuck holding the bag (of bad dollars) catch on and spend the dollars into the economy with emotional zeal, thus igniting inflationary fever.
This time–since there are so many dollars and so many countries involved–the Fed has been able to “paper” over every approaching crisis for the past 15 years, especially with Alan Greenspan as Chairman of the Federal Reserve Board, which has allowed the bubble to become history’s greatest.
The mistakes made with excessive credit at artificially low rates are huge, and the market is demanding a correction. This involves excessive debt, misdirected investments, over-investments, and all the other problems caused by the government when spending the money they should never have had. Foreign militarism, welfare handouts and $80 trillion entitlement promises are all coming to an end. We don’t have the money or the wealth-creating capacity to catch up and care for all the needs that now exist because we rejected the market economy, sound money, self reliance and the principles of liberty.
Since the correction of all this misallocation of resources is necessary and must come, one can look for some good that may come as this “Big Event” unfolds.
There are two choices that people can make. The one choice that is unavailable to us is to limp along with the status quo and prop up the system with more debt, inflation and lies. That won’t happen.
One of the two choices, and the one chosen so often by government in the past is that of rejecting the principles of liberty and resorting to even bigger and more authoritarian government. Some argue that giving dictatorial powers to the President, just as we have allowed him to run the American empire, is what we should do. That’s the great danger, and in this post-911 atmosphere, too many Americans are seeking safety over freedom. We have already lost too many of our personal liberties already. Real fear of economic collapse could prompt central planners to act to such a degree that the New Deal of the 30’s might look like Jefferson ’s Declaration of Independence.
The more the government is allowed to do in taking over and running the economy, the deeper the depression gets and the longer it lasts. That was the story of the 30s and the early 40s, and the same mistakes are likely to be made again if we do not wake up.
But the good news is that it need not be so bad if we do the right thing. I saw “Something Big” happening in the past 18 months on the campaign trail. I was encouraged that we are capable of waking up and doing the right thing. I have literally met thousands of high school and college kids who are quite willing to accept the challenge and responsibility of a free society and reject the cradle-to-grave welfare that is promised them by so many do-good politicians.
If more hear the message of liberty, more will join in this effort. The failure of our foreign policy, welfare system, and monetary policies and virtually all government solutions are so readily apparent, it doesn’t take that much convincing. But the positive message of how freedom works and why it’s possible is what is urgently needed.
One of the best parts of accepting self reliance in a free society is that true personal satisfaction with one’s own life can be achieved. This doesn’t happen when the government assumes the role of guardian, parent or provider, because it eliminates a sense of pride. But the real problem is the government can’t provide the safety and economic security that it claims. The so called good that government claims it can deliver is always achieved at the expense of someone else’s freedom. It’s a failed system and the young people know it.
Restoring a free society doesn’t eliminate the need to get our house in order and to pay for the extravagant spending. But the pain would not be long-lasting if we did the right things, and best of all the empire would have to end for financial reasons. Our wars would stop, the attack on civil liberties would cease, and prosperity would return. The choices are clear: it shouldn’t be difficult, but the big event now unfolding gives us a great opportunity to reverse the tide and resume the truly great American Revolution started in 1776. Opportunity knocks in spite of the urgency and the dangers we face.
Let’s make “Something Big Is Happening” be the discovery that freedom works and is popular and the big economic and political event we’re witnessing is a blessing in disguise.
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July 7th, 2008
Madame Speaker, I rise today to introduce the Energy Efficient and Environmentally Friendly Automobile Tax Credit Act, legislation that will help Americans reduce pollution and the amount they pay for gas. My legislation accomplishes these important goals by providing Americans a tax credit of up to $2,000 when they sell or trade in a car and obtain a vehicle that has at least a 20% higher average fuel economy than the sold or traded-in car. The bill also creates a federal tax deduction for any state or local taxes paid on the purchase of the more fuel-efficient automobile and makes interest on loans to purchase the more fuel-efficient automobile tax deductible.
This legislation will help Americans cope with high gas prices by making it easier for them to obtain more fuel-efficient cars. I hope my colleagues would agree that Congress should provide free market incentives to make it easier for Americans to exchange their current cars for cars that create less pollution.
Providing tax deductions and tax credits to make it easier for Americans to purchase fuel-efficient automobiles is a win for American consumers, a win for the environment, and a win for those of us who favor free market solutions to pollution and high gas prices. I urge my colleagues to support this legislation.
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