RON PAUL: AUDIT THE FED…THEN END IT!

 

I have been very pleased with the progress of my legislation, HR 1207, which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system. This bill now has nearly 170 cosponsors, with support from both Republicans and Democrats. Senator Bernie Sanders has introduced a companion bill in the Senate S 604, which will hopefully begin to gain momentum as well. I am very encouraged to see so many of my colleagues in Congress stand with me for greater transparency in government. 

Some, however, have begun to push back against this bill, and I am very happy to address their concerns. 

Their main argument seems to be that Congressional oversight over the Fed is government interference in the free market.  This argument shows a misunderstanding of what a free market really is.  Fundamentally, you cannot defend the Federal Reserve and the free market at the same time.  The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money—the lifeblood of the economy.  In a free market, interest rates, like the price of any other consumer goods are decentralized and set by the market. The only legitimate, Constitutional role of the government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters. 

Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who instead of stabilizing the economy, have destabilized it.  It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930’s.  It has also inflated away the value of our currency by over 96 percent since its inception.  It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts.  It has predictably exacerbated the very problems it was meant to solve.

Detractors argue that the Fed must remain immune from the political process, and that more congressional oversight will distort their important decisions.  On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High level officials routinely make rounds between positions at the Fed, member banks, Treasury and back again taking care of friends and each other along the way. 

As for the foolish- ness of placing complex monetary policy decisions in politicians hands…

I can’t agree more. No politician or central banker, no matter how brilliant —is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over.  It’s beyond me why we agreed to try it again. 

To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have.  They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or any accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so. 

However, it is the responsibility of every member of Congress to represent the interests of those  people who sent them to Washington in the first place and find out what has been happening with our money. As the branch of government with the power of the purse, we really have no other reasonable choice when the economy is in the shape it’s in.

Congressman Ron Paul: End The War On Drugs

 

We have recently heard of many shocking stories of brutal killings and ruthless violence related to the drug cartels warring with Mexican and U.S. officials. It is approaching the fever pitch of a full-blown crisis. Unfortunately, the administration is not likely to waste this opportunity to further expand government. Hopefully, we can take a deep breath and look at history for the optimal way to deal with this dangerous situation, which is not unprecedented. 

Alcohol prohibition in the 1920’s brought similar violence, gangs, lawlessness, corruption and brutality. The reason for the violence was not that making and selling alcohol was inherently dangerous. The violence came about because of the creation of a brutal black market which also drove profits through the roof. These profits enabled criminals like Al Capone to become incredibly wealthy, and militantly defensive of that wealth.  Al Capone saw the repeal of Prohibition as a great threat, and indeed smuggling operations and gangland violence fell apart after repeal.  Today, picking up a bottle of wine for dinner is a relatively benign transaction, and beer trucks travel openly and peace- fully along their distribution routes. 

Similarly today, the best way to fight violent drug cartels would be to pull the rug out from under all their profits by bringing these transactions out into the sunlight.  People who, unwisely, buy these drugs   would hardly opt for the back alley criminal dealer as a source, if a coffeehouse-

style dispensary was an option. Moreover, a law-abiding dispensary is likely to check ID’s and refuse sale to minors, as bars and ABC stores tend to do very diligently. Think of all the time and resources law enforcement could save if they could instead focus on violent crimes, instead of this impossible nanny-state mandate of saving people from themselves! 

If these reasons don’t convince the drug warriors, I would urge them to go back to the Constitution and consider where there is any authority to prohibit private personal choices like this. All of our freedoms—the freedom of religion and assembly, the freedom of speech, the right to bear arms, the right to be free from unnecessary government searches and seizures —stem from the precept that you own yourself and are responsible for your own choices. 

Prohibition laws negate self-owner- ship and are an absolute affront to the principles of freedom. I disagree vehemently with the recreational use of drugs, but at the same time, if people are only free to make good decisions, they are not truly free. In any case, states should decide for themselves how to handle these issues and the federal government should respect their choices. 

My great concern is that instead of dealing deliberatively with the actual problems, Congress will be pressed again to act quickly without much thought or debate. I can’t think of a single problem we haven’t made worse that way. The panic generated by the looming crisis in Mexico should not be redirected into curtailing more rights, especially our second amendment rights, as seems to be in the works. Certainly, more gun laws in response to this violence will only serve to disarm lawful citizens. This is something to watch out for and stand up against. We have escalated the drug war enough to see it only escalates the violence and profits associated with drugs. It is time to try freedom instead.

By Congressman Ron Paul

Congressman Ron Paul

 

 

Justice & America’s Backslide

by Suzanne Takowsky

Born and raised in Pittsburgh, Pennsylvania,Texas Congressman Dr. Ron Paul is a leading spokesman in Washington for limited constitutional government, low taxes, free markets, and a return to monetary policies, based on commodity-backed currency. Paul graduated from the Duke University School of Medicine obstetrics/gynecology, before going off to serve in the U.S. Air Force as as a flight surgeon. After his return, he moved his family to Texas to start his medical practice where as an OB-GYN specialist, he delivered more than 4,000 babies. During his termin Congress (1970s-1980s) he served on the House Banking committee and was an advocate for sound monetary policy. But as an outspoken critic of the Federal Reserve’s inflationary measures, he discovered that his ideals were not popular in Washington. As a key member of the Gold Commission, he advocated a return to a gold standard for our currency and was an advocate of pro-life and family values. He used his votes to lower or abolish federal taxes, spending, regulation, and promoted the return of government to its proper constitutional levels. In 1984, he relinquished his House seat and went back to his medical practice, but returned to Congress in 1997 to represent the 14th Congressional district of Texas. Paul has authored several books, including Challenge to Liberty; The Case for Gold; and A Republic, If You Can Keep It. As a distinguished counselor to the Ludwig von Mises Institute, he is quoted by scholars and writers inmonetary policy, banking, and political economy. Over the years he’s received numerous honors from organizations including the National Taxpayers Union, Citizens Against Government Waste, the Council for a Competitive Economy, and Young Americans for Freedom, among others. Paul and his wife are the parents of five children, 18 grandchildren and one great-grandchild. They live in Lake Jackson, Texas.

During our interview, Dr. Ron Paul didn’t hold back for a minute when it came to voicing his concern over the well-being of our country, and all who inhabit it. Some may differ with his views on how to improve our current problems, but one thing is clear…his mind is on improving the freedom, security and prosperity for us, our children and future generations—not just in the U.S., but world wide. And Paul’s voice and vote is considerable. He serves on the House Financial Services Committee, the International Relations Committee, Joint Economic Committee, and on the Financial Services Committee, as well being the vice-chairman of the Oversight and Investigations subcommittee.

ST: Going through years of medical school training, starting a private practice, and then becoming a noted specialist in your field of medicine is no easy task. Yet, you gave it up, and went into politics. Why?

RP: Medicine was always my first love and I still have a lot of affection for it, and I would do it again. But I became fascinated with studying and reading economics back in the 1960s, about the same time that I was studying medicine. It started out as a hobby and I tried to figure out why there were cycles in business where economies went through periods of inflation, deflation, recession and unemployment—the things we have to put up with. I never really considered a political career…but went into politics on a lark mainly to talk about the things that I felt were important. I’ve always been interested in economic policy, particularly monetary policy and, of course I am very much engaged in the state of the financial and global problems we face today.

Paul doesn’t hold back on the topic of financial free fall. And points out that intent to defraud hard-working citizens reaches way past people like Bernie Madoff’s so-called Ponzi scheme which has stolen billions of dollars from investors. Paul says that even though Madoff will face appropriate criminal consequences that will hopefully deter other criminals—politicians around him think that more laws need to be enforced. He on the other hand, believes that a lack of laws is not the problem.

“The government runs a fraud much bigger than Madoff’s,” says Paul. “Our Social Security systemis the very definition of a Ponzi/pyramid scheme. If the government truly had aninterest in protecting people’s savings they would allow people to opt out of Social Security. The government would cut wasteful spending, such as our overseas empire, honor current obligations to seniors, and eventually phase the program out. But as with Enron and Sarbanes Oxley, I expect new, unrelated legislation to be proposed that further damages freedom in the name of protecting us, amidst loud proclamations that they have made the world safe.”

ST: With regard to ‘toxic assets’ the government is talking about purchasing from banks, what is your feeling?

RP: First, buying up these toxic assets of which there is no pricing to it—they’re ill-liquid. I think it’s horrible. I was making fun on the House floor the other day about the ‘bad bank’ which means they’re going to buy bad assets created by bad bankers. Then, they will take all of these bad assets and dump them onto good citizens. It’s about taking care of their buddies and working through the monopoly of the banks and howthey create money  and credit. But once people get frightened they almost beg the government to do more. They give the government more and more power, and the Federal Reserve uncontrolled power to create more money. Then the Treasury spends three hundred and fifty billion dollars, and nobody knows where themoney went. Then, Congress says…well, I guess we didn’t give you enough money, so we’re going to give you a trillion dollars …and all this froma government that has nothing. The only thing that they can do is to steal from somebody.”

According to Paul, passing a law doesn’t fix the problem, just as throwing paper at a recession doesn’t stop it. He points out that total trust in government solutions only creates moral hazard, and amplifies risky behavior. It seems that every day Americans are forced to face more bad news that comes in the form of their trust gone astray. Being blindsided by an enemy is always something we fear, but keep a watchful eye out for. But being defrauded by an enemy within is almost unthinkable. Shouldn’t we be able to at least trust our government? Not according to Paul, who says that our government is so complicit pre-empting private fraud that any newlaws, by regulatory agencies do little to help solve anything. He says that he sees our liberties slipping away every time Congress makes a move to do something, citing the SEC, which he states did a poor job overseeing and preventing the economic downfall we are in now.

ST: All of this money that is being put into bailing out companies—is there money in our federal reserve to cover this bailout debt? And if not, where does that leave the American people?

RP: Absolutely not. All this bailout money is coming out of thin air. We all understand what monopoly money is …it’s not real. Just because the government keeps printing it, it may fool people for awhile, but throughout history the government has not been able to fool people for long periods of time. Wars and extravagant domestic spending has always been financed through the delusion factor of printing new money, and it always ends badly. In everyone there’s a feeling that it’s nice to be rich and have the government print more money to help out. Of course, people are happywhen they get a social security check from the government. Even if the check they receive is froma Ponzi scheme—meaning returns on future investments. The social security money they receive is not from money already in the social security fund because there is no money in the system. Money received is based on future funds of new investors—meaning our country’s future generations who will pay into the system. But there is no backing to money now being printed. If we held the government strictly to the rules of the gold standard, they couldn’t do this. It would be illegal.”

ST: Is the United States broke?

RP: Yes. We are completely insolvent. We haven’t been called to task yet as a smaller country would have already been called on the carpet. When third worldnations, such as Central America, Africa or South America do this, people see it and it comes to a halt. We’ve been able to get awaywith it longer because we‘re still the richest country in the world, at one time had the most gold, a powerful economy, a strong military force and there was a strong trust built with other countries. Even though we are broke and can’t pay ‘the bills’ and promises through the entitlement system is something like 70 trillion dollars, and there is no real money in the bank, our notes haven’t been called by theworld, as in the case of Iceland. England is under the gun for the same reason. In our case there are so many countries with so much at stake, nobody wants to dump the dollar because they are holding somany dollars. We’ve more or less trapped them. We’ve always been a consumer nation. We print the money, we buy all these goods from China and they hold trillions of dollars worth of our dollars…they’re almost in a catch 22 and have to keep us afloat. But the markets eventually rule no matter how powerful governments are or how they want to regulate or how powerful our reserve is…ultimately people realize that the money doesn’t have value and start getting out of the dollar. It is worse than before because this is a world wide event; before it was always regional. Now instead of the central banks of the world holding gold—they’re holding dollars. Theworld has awakened to the fact that dollars are not gold, and that’s why the financial markets have ceased up.

ST: Would you consider another run for president in 2012?

RP: No. Notmewithwhat’s going on.

RP: I would change foreign policy, bring the troops home and save 500-600 billion dollars every year; then work very hard on removing the principle that the Federal Reserve can monitize debt. That is theworst part of the Federal Reserve; that the government is allowed to get around debt, and the Federal Reserve continues to print money anyway.