Ron Paul leads a 1.5 hour House Financial Services Committee hearing on March 26, 2012. The hearing examines the past and future Federal Reserve bailouts of the Eurozone. In his opening statement, Congressman Paul addresses the debt crisis around the world and the effects upon the U.S. national debt and how it affects the U.S. taxpayer. He covers all of the angles of debt and how to liquidating debt, and how currency has been devalued to get rid of debt, which is something Ron Paul is against, because of who gets penalized when debt is liquidated in such a fraudulent way. Congressman Paul notes that those in the Eurozone have better balance sheets than the U.S., however, everyone looks to the U.S. to use the dollar to bail the Eurozone out. He thinks this is the beginning of a much larger crisis and it's much bigger than most will admit and it's going to get worst. He talks about the cost and how the dollar will be devalued and that some think that will be good, but only for some in the business of trade, with many others taking a big hard hit. He emphasizes the moral hazard of who actually pays for such bailouts. He points out that economic laws are much stronger than the manipulations and trickery and that we all need to face up to the facts. Then the hearing begins. - GC
Want Change? Be A Weapon of Mass Dissent - Read "The President"
Wednesday, March 28, 2012
Monday, March 26, 2012
A Fistful of Euros - Essay by Ron Paul for week of March 26, 2012
Hear Congressman Paul read his weekly Monday morning column aloud at 888-322-1414
The Essay is updated every Monday morning.
A Fistful of Euros
Essay by Ron Paul for week of March 26, 2012
This week, my congressional committee will hold a hearing to examine how the Federal Reserve bails out European banks, propping up spendthrift European governments in the process. Unfortunately this bailout comes at the expense of American citizens, in the form of higher prices and diminished savings down the road.
A good analysis of the Fed’s “swap” scheme first appeared in the Wall Street Journal back in December, in an article by Gerald O’Driscoll entitled, “The Federal Reserve’s Covert Bailout of Europe.” Essentially, beginning late last year the Fed provided U.S. dollars to the European Central Bank in exchange for Euros-- sometimes as much as $100 billion at a time. The ECB then funneled those dollars to European banks to provide liquidity and prevent crises from bank insolvencies. Since the currency swap was not technically a loan, the Fed did not have to embarrass itself by openly showing foreign bank debt on its balance sheet. The ECB meanwhile did not have to print new Euros and expose the true fragility of big European banks.
The entire purpose of this unholy arrangement was to obscure the truth: namely that the Fed was bailing out Europe with U.S. dollars.
But why is it the business of the Federal Reserve to bail out European banks that find themselves short of dollars to pay their dollar-denominated contracts? After all, those
contracts often were hedges taken to protect banks against weakness of the Euro. Hedges are supposed to reduce risk, but banks that miscalculate should suffer their own losses accordingly. It’s not our business if the ECB chooses to create moral hazards by providing liquidity to European banks, but why should the Fed prop up Europe’s bad decisions!
The Fed has promised to provide unlimited amounts of dollars to the ECB, should circumstances require it. It boggles the mind. Of course when Fed officials first entered into these swap agreements with the ECB last September, they did so quietly. The American public only found out via websites of the ECB, the Bank of England, or the Swiss Central Bank.
The Fed already has pumped trillions of dollars into the economy since 2008, and US banks currently hold $1.5 trillion of excess reserves. So why don't American banks lend those excess trillions to European banks if they really need dollars? If US banks could earn 1 or 2 percent on those loans, they might just be interested. But they can't compete with the ½ percent interest rate charged by the Fed to the ECB. That's one glaring example of the harm caused by the Fed's ability to create money and loan it at below-market interest rates.
The Fed argues that these loans will be temporary, merely providing a little boost to get Europe over the hump. But that's what they thought a few years ago when such lines of credit to the ECB were set to expire, only to see the Fed reauthorize them. What happens if the European financial system collapses? Will the Fed be left holding a bunch of worthless Euros? Will the ECB simply shrug and turn over the collateral it received from European banks, maybe in the form of bonds from Ireland, Italy, or Greece? Have the 17 individual central banks backing the ECB pledged their gold holdings as collateral?
The Fed has placed a hundred-billion dollar bet on the future of the Euro, with the strength of the dollar on the line. This is absolutely irresponsible, and directly contrary to market discipline. Let private banks, European or otherwise, take their own risks. Let foreign central banks inflate their own currencies and suffer the consequences. In other words, it’s time to apply market principles to banks and money.
The Essay is updated every Monday morning.
A Fistful of Euros
Essay by Ron Paul for week of March 26, 2012
This week, my congressional committee will hold a hearing to examine how the Federal Reserve bails out European banks, propping up spendthrift European governments in the process. Unfortunately this bailout comes at the expense of American citizens, in the form of higher prices and diminished savings down the road.
A good analysis of the Fed’s “swap” scheme first appeared in the Wall Street Journal back in December, in an article by Gerald O’Driscoll entitled, “The Federal Reserve’s Covert Bailout of Europe.” Essentially, beginning late last year the Fed provided U.S. dollars to the European Central Bank in exchange for Euros-- sometimes as much as $100 billion at a time. The ECB then funneled those dollars to European banks to provide liquidity and prevent crises from bank insolvencies. Since the currency swap was not technically a loan, the Fed did not have to embarrass itself by openly showing foreign bank debt on its balance sheet. The ECB meanwhile did not have to print new Euros and expose the true fragility of big European banks.
The entire purpose of this unholy arrangement was to obscure the truth: namely that the Fed was bailing out Europe with U.S. dollars.
But why is it the business of the Federal Reserve to bail out European banks that find themselves short of dollars to pay their dollar-denominated contracts? After all, those
contracts often were hedges taken to protect banks against weakness of the Euro. Hedges are supposed to reduce risk, but banks that miscalculate should suffer their own losses accordingly. It’s not our business if the ECB chooses to create moral hazards by providing liquidity to European banks, but why should the Fed prop up Europe’s bad decisions!
The Fed has promised to provide unlimited amounts of dollars to the ECB, should circumstances require it. It boggles the mind. Of course when Fed officials first entered into these swap agreements with the ECB last September, they did so quietly. The American public only found out via websites of the ECB, the Bank of England, or the Swiss Central Bank.
The Fed already has pumped trillions of dollars into the economy since 2008, and US banks currently hold $1.5 trillion of excess reserves. So why don't American banks lend those excess trillions to European banks if they really need dollars? If US banks could earn 1 or 2 percent on those loans, they might just be interested. But they can't compete with the ½ percent interest rate charged by the Fed to the ECB. That's one glaring example of the harm caused by the Fed's ability to create money and loan it at below-market interest rates.
The Fed argues that these loans will be temporary, merely providing a little boost to get Europe over the hump. But that's what they thought a few years ago when such lines of credit to the ECB were set to expire, only to see the Fed reauthorize them. What happens if the European financial system collapses? Will the Fed be left holding a bunch of worthless Euros? Will the ECB simply shrug and turn over the collateral it received from European banks, maybe in the form of bonds from Ireland, Italy, or Greece? Have the 17 individual central banks backing the ECB pledged their gold holdings as collateral?
The Fed has placed a hundred-billion dollar bet on the future of the Euro, with the strength of the dollar on the line. This is absolutely irresponsible, and directly contrary to market discipline. Let private banks, European or otherwise, take their own risks. Let foreign central banks inflate their own currencies and suffer the consequences. In other words, it’s time to apply market principles to banks and money.
"What Does the Fed Do?" with James Grant -- Ron Paul Fed Lecture Series, Pt 2/3
United States Congressman Ron Paul sponsored this Congressional lecture on "What Does the Fed Do?", the second lecture in a three part series on the Federal Reserve System for Congressional staff. As a continuing educational tool this lecture was filmed and is provided to the public. The lecture was delivered by James Grant, founder and editor of Grant's Interest Rate Observer and a frequent commentator on financial news networks.
Mr. Grant's lecture summarizes the methods the Federal Reserve uses in its attempt to manage the economy through the conduct of monetary policy, dissecting the euphemistic language behind the Fed's actions and describing in detail the problems with the Fed's endeavor to be an "economic seer." Mr. Grant also bridges the gap between the lectures on the pre-Fed era and the Fed's future by describing the evolution of the Fed over its one hundred year history.
"What Does the Fed Do?" with James Grant -- Ron Paul Fed Lecture Series, Pt 2/3
Other lectures in the Fed series:
Pt. 1: Why Was the Fed Created? -- http://www.thepresident.com/2012/03/why-was-federal-reserve-created-ron.html
Pt. 3: What is the Fed's Future? -- available May 2012
Mr. Grant's lecture summarizes the methods the Federal Reserve uses in its attempt to manage the economy through the conduct of monetary policy, dissecting the euphemistic language behind the Fed's actions and describing in detail the problems with the Fed's endeavor to be an "economic seer." Mr. Grant also bridges the gap between the lectures on the pre-Fed era and the Fed's future by describing the evolution of the Fed over its one hundred year history.
"What Does the Fed Do?" with James Grant -- Ron Paul Fed Lecture Series, Pt 2/3
Other lectures in the Fed series:
Pt. 1: Why Was the Fed Created? -- http://www.thepresident.com/2012/03/why-was-federal-reserve-created-ron.html
Pt. 3: What is the Fed's Future? -- available May 2012
Sunday, March 25, 2012
A Man Who Says It Like It Is - Phil Donahue
Have written about my feelings about Phil Donahue numerous times. I love the man. His show in the late 80's early 90's introduced me to a alternative therapy for HIV/AIDS when I was trying to help my grandfather who had contracted it through a bad blood transfusion. I learned about Ozone Therapy, something the U.S. government and their crony capitalists in charge of the FDA and AMA don't want American people knowing any thing about. Have done my research and have found that medical ozone therapy is extremely effective at solving a very large number of health issues, including Hepatitis C, HIV/AIDS, numerous forms of cancer, viral and bacterial infections and more. Thank you Phil for opening that door.
The other reason I love Phil Donahue is because he would not stick to the talking point memos fed to him by his bosses at MSNBC, who got those talking point memos from the White House, Military Generals and assorted corporatists who were in bed with the war machine walking the U.S. into a U.S. led pre-emptive strike against Iraq. Phil Donahue challenged the whole concept of preventative war, as well as challenging the lies and misinformation regarding Saddam Hussein's supposed stockpiles of "WMD". Although his ratings had climbed, as he challenged the status quo media drumbeat to war, he was fired. Well, fuck you MSNBC. That's what I say! Thank you Phil Donahue. Peace Love Groove, GC
Phil Donahue being interviewed by Piers Morgan on CNN on January 6, 2012
Connect Direct with Phil Donahue at BodyOfWar.Com
The other reason I love Phil Donahue is because he would not stick to the talking point memos fed to him by his bosses at MSNBC, who got those talking point memos from the White House, Military Generals and assorted corporatists who were in bed with the war machine walking the U.S. into a U.S. led pre-emptive strike against Iraq. Phil Donahue challenged the whole concept of preventative war, as well as challenging the lies and misinformation regarding Saddam Hussein's supposed stockpiles of "WMD". Although his ratings had climbed, as he challenged the status quo media drumbeat to war, he was fired. Well, fuck you MSNBC. That's what I say! Thank you Phil Donahue. Peace Love Groove, GC
Phil Donahue being interviewed by Piers Morgan on CNN on January 6, 2012
Connect Direct with Phil Donahue at BodyOfWar.Com
Friday, March 23, 2012
Thursday, March 22, 2012
Ron Paul on The Kudlow Report CNBC 3/22/12
Ron Paul, discusses his views on Washington's budget battle, Paul Ryan's budget, the Federal Reserve, spending, and pipeline politics.
Rachel Maddow on her book titled Drift
As a huge fan of Rachel Maddow, when it comes to the way she vigorously challenges the lame wars the U.S. is engaged in. Am looking forward to this book described below. Peace Love Groove, GC
FROM THE PUBLISHER
"Written with bracing wit and intelligence, Rachel Maddow's Drift: The Unmooring of American Military Power argues that we've drifted away from America's original ideals and become a nation weirdly at peace with perpetual war, with all the financial and human costs that entails. To understand how we've arrived at such a dangerous place, Maddow takes us from the Vietnam War to today's war in Afghanistan, along the way exploring the disturbing rise of executive authority, the gradual outsourcing of our war-making capabilities to private companies, the plummeting percentage of American families whose children fight our constant wars for us, and even the changing fortunes of G.I. Joe. She offers up a fresh, unsparing appraisal of Reagan's radical presidency. Ultimately, she shows us just how much we stand to lose by allowing the priorities of the national security state to overpower our political discourse."
Drift is available on March 27, 2012, everywhere books are sold
FROM THE PUBLISHER
"Written with bracing wit and intelligence, Rachel Maddow's Drift: The Unmooring of American Military Power argues that we've drifted away from America's original ideals and become a nation weirdly at peace with perpetual war, with all the financial and human costs that entails. To understand how we've arrived at such a dangerous place, Maddow takes us from the Vietnam War to today's war in Afghanistan, along the way exploring the disturbing rise of executive authority, the gradual outsourcing of our war-making capabilities to private companies, the plummeting percentage of American families whose children fight our constant wars for us, and even the changing fortunes of G.I. Joe. She offers up a fresh, unsparing appraisal of Reagan's radical presidency. Ultimately, she shows us just how much we stand to lose by allowing the priorities of the national security state to overpower our political discourse."
Drift is available on March 27, 2012, everywhere books are sold
Tuesday, March 20, 2012
Demolishing Due Process - Essay by Ron Paul for March 19, 2012
Hear Congressman Paul read his weekly Monday morning column aloud at 888-322-1414
The Essay is updated every Monday morning.
Demolishing Due Process
Essay by Ron Paul for week of March 19, 2012
It is ironic but perhaps sadly appropriate that Attorney General Eric Holder would choose a law school, Northwestern University, to deliver a speech earlier this month in which he demolished what was left of the rule of law in America.
In what history likely will record as a turning point, Attorney General Holder bluntly explained that this administration believes it has the authority to use lethal force against Americans if the President determines them to be a threat to the nation. He tells us that this is not a violation of the due process requirements of our Constitution because the President himself embodies "due process" as he unilaterally determines who is to be targeted. As Holder said, "a careful and thorough executive branch review of the facts in a case amounts to 'due process.'" That means that the administration believes it is the President himself who is to be the judge, jury, and executioner.
As George Washington University Law Professor Jonathan Turley wrote of the Holder speech:
"All the Administration has said is that they closely and faithfully follow their own guidelines — even if their decisions are not subject to judicial review. The fact that they say those guidelines are based on notions of due process is meaningless. They are not a constitutional process of review."
It is particularly bizarre to hear the logic of the administration claiming the right to target its citizens according to some secret selection process, when we justified our attacks against Iraq and Libya because their leaders supposedly were targeting their own citizens! We also now plan a covert war against Syria for the same reason.
I should make it perfectly clear that I believe any individual who is engaging in violence against this country or its citizens should be brought to justice. But as Attorney General Holder himself points out in the same speech, our civilian courts have a very good track record of trying and convicting individuals involved with terrorism against the United States. Our civilian court system, with the guarantee of real due process, judicial review, and a fair trial, is our strength, not a weakness. It is not an impediment to be sidestepped in the push for convictions or assassinations, but rather a process that guarantees that fundamental right to be considered innocent until proven guilty in a court of law.
I am encouraged, however that there appears to be the beginning of a backlash against the administration's authoritarian claims. Just recently I did an interview with conservative radio talk show host Laura Ingraham who expressed grave concern over using these sorts of tactics against Americans using the supposed war on terror as justification. Sadly, many conservative leaders were silent when Republican President George W. Bush laid the groundwork for this administration's lawlessness with the PATRIOT Act, warrantless wiretapping, indefinite detention without trial, and other violations. Similarly, as Professor Turley points out, "Democrats previously demanded the 'torture memos' of the Bush administration that revealed poor legal analysis by Judge Jay Bybee and Professor John Yoo to justify torture. Now, however, Democrats are largely silent in the face of a president claiming the right to unilaterally kill citizens." The misuse of and disregard for our Constitution for partisan political gain is likely one reason the American public holds Congress in such low esteem. Now the stakes are much higher. Congress and the people should finally wake up!
The Essay is updated every Monday morning.
Demolishing Due Process
Essay by Ron Paul for week of March 19, 2012
It is ironic but perhaps sadly appropriate that Attorney General Eric Holder would choose a law school, Northwestern University, to deliver a speech earlier this month in which he demolished what was left of the rule of law in America.
In what history likely will record as a turning point, Attorney General Holder bluntly explained that this administration believes it has the authority to use lethal force against Americans if the President determines them to be a threat to the nation. He tells us that this is not a violation of the due process requirements of our Constitution because the President himself embodies "due process" as he unilaterally determines who is to be targeted. As Holder said, "a careful and thorough executive branch review of the facts in a case amounts to 'due process.'" That means that the administration believes it is the President himself who is to be the judge, jury, and executioner.
As George Washington University Law Professor Jonathan Turley wrote of the Holder speech:
"All the Administration has said is that they closely and faithfully follow their own guidelines — even if their decisions are not subject to judicial review. The fact that they say those guidelines are based on notions of due process is meaningless. They are not a constitutional process of review."
It is particularly bizarre to hear the logic of the administration claiming the right to target its citizens according to some secret selection process, when we justified our attacks against Iraq and Libya because their leaders supposedly were targeting their own citizens! We also now plan a covert war against Syria for the same reason.
I should make it perfectly clear that I believe any individual who is engaging in violence against this country or its citizens should be brought to justice. But as Attorney General Holder himself points out in the same speech, our civilian courts have a very good track record of trying and convicting individuals involved with terrorism against the United States. Our civilian court system, with the guarantee of real due process, judicial review, and a fair trial, is our strength, not a weakness. It is not an impediment to be sidestepped in the push for convictions or assassinations, but rather a process that guarantees that fundamental right to be considered innocent until proven guilty in a court of law.
I am encouraged, however that there appears to be the beginning of a backlash against the administration's authoritarian claims. Just recently I did an interview with conservative radio talk show host Laura Ingraham who expressed grave concern over using these sorts of tactics against Americans using the supposed war on terror as justification. Sadly, many conservative leaders were silent when Republican President George W. Bush laid the groundwork for this administration's lawlessness with the PATRIOT Act, warrantless wiretapping, indefinite detention without trial, and other violations. Similarly, as Professor Turley points out, "Democrats previously demanded the 'torture memos' of the Bush administration that revealed poor legal analysis by Judge Jay Bybee and Professor John Yoo to justify torture. Now, however, Democrats are largely silent in the face of a president claiming the right to unilaterally kill citizens." The misuse of and disregard for our Constitution for partisan political gain is likely one reason the American public holds Congress in such low esteem. Now the stakes are much higher. Congress and the people should finally wake up!
Ron Paul Statement on latest House Republican Budget Proposal
“If Republicans really want to win in November, they will have to draw a clear distinction between themselves and Obama’s disastrous agenda” - Ron Paul
LAKE JACKSON, Texas, Mar 20, 2012 - Congressman and 2012 GOP Presidential candidate Ron Paul issued the following statement today regarding the latest budget proposal by the House Republican leadership"
“Today, the House Republican leadership released a budget meant to be an alternative to President Obama's budget plan, which was filled with more debt, more deficits, and more taxing and spending. Unfortunately, the House Republican proposal doesn't go far enough to address the extreme fiscal problems we face as a nation.
“The House GOP’s budget proposal does not balance the budget until the year 2040, and it adds billions to our already exploding deficits. In fact, this budget doesn't actually 'cut' any spending. It only reduces assumed increases in spending - essentially playing the same game the Washington establishment has played for years with our hard-earned money.
“As Sen. Jim DeMint recently noted: “This idea that we have to look 30 years out to balance the budget is not only unnecessary, but it’s improbable. We cannot continue to spend at our current rate for 10 more years, much less 20 or 30 more years.”
“What is really disappointing is that the GOP budget assumes that the federal government should continue to do everything, or at least almost everything, it is currently doing. We will never have a balanced federal budget, low taxes, economic prosperity, and individual liberty unless Congress stops trying to run the world, run the economy, and run our lives.
“If Republicans really want to win in November, they will have to draw a clear distinction between themselves and Obama's disastrous agenda. And producing a budget that does not seriously address our nation's debt crisis will not distinguish them at all in the eyes of the American people.
“Americans are looking for serious solutions, not more of same. In order to reject the status quo, lawmakers in Congress must act boldly and decisively on fiscal matters by adopting measures like those found in my own 'Plan to Restore America.' My plan actually cuts $1 trillion in spending in one year, and it sets the stage for serious reforms in entitlements while preserving benefits for seniors and the dependent. My plan also eliminates five unconstitutional cabinet departments, including the departments of Education and Energy. Additionally, my plan reduces the corporate tax rate to 15 percent, makes permanent the Bush-era tax cuts, and ends taxes on individual savings and repatriated capital. And it would balance the budget in only three years.
“This is what a serious budget proposal looks like. Any proposal that doesn't cut real spending and adds to the deficit isn't one that will get us out of this mess and back on track.
“Of the five men seeking the office of President, I am the only one who has offered a serious plan with real cuts and a real path to economic prosperity.”
SOURCE: Ron Paul 2012 Presidential Campaign Committee
Ron Paul 2012 Presidential Campaign Committee
Gary Howard, 855-886-9779
LAKE JACKSON, Texas, Mar 20, 2012 - Congressman and 2012 GOP Presidential candidate Ron Paul issued the following statement today regarding the latest budget proposal by the House Republican leadership"
“Today, the House Republican leadership released a budget meant to be an alternative to President Obama's budget plan, which was filled with more debt, more deficits, and more taxing and spending. Unfortunately, the House Republican proposal doesn't go far enough to address the extreme fiscal problems we face as a nation.
“The House GOP’s budget proposal does not balance the budget until the year 2040, and it adds billions to our already exploding deficits. In fact, this budget doesn't actually 'cut' any spending. It only reduces assumed increases in spending - essentially playing the same game the Washington establishment has played for years with our hard-earned money.
“As Sen. Jim DeMint recently noted: “This idea that we have to look 30 years out to balance the budget is not only unnecessary, but it’s improbable. We cannot continue to spend at our current rate for 10 more years, much less 20 or 30 more years.”
“What is really disappointing is that the GOP budget assumes that the federal government should continue to do everything, or at least almost everything, it is currently doing. We will never have a balanced federal budget, low taxes, economic prosperity, and individual liberty unless Congress stops trying to run the world, run the economy, and run our lives.
“If Republicans really want to win in November, they will have to draw a clear distinction between themselves and Obama's disastrous agenda. And producing a budget that does not seriously address our nation's debt crisis will not distinguish them at all in the eyes of the American people.
“Americans are looking for serious solutions, not more of same. In order to reject the status quo, lawmakers in Congress must act boldly and decisively on fiscal matters by adopting measures like those found in my own 'Plan to Restore America.' My plan actually cuts $1 trillion in spending in one year, and it sets the stage for serious reforms in entitlements while preserving benefits for seniors and the dependent. My plan also eliminates five unconstitutional cabinet departments, including the departments of Education and Energy. Additionally, my plan reduces the corporate tax rate to 15 percent, makes permanent the Bush-era tax cuts, and ends taxes on individual savings and repatriated capital. And it would balance the budget in only three years.
“This is what a serious budget proposal looks like. Any proposal that doesn't cut real spending and adds to the deficit isn't one that will get us out of this mess and back on track.
“Of the five men seeking the office of President, I am the only one who has offered a serious plan with real cuts and a real path to economic prosperity.”
SOURCE: Ron Paul 2012 Presidential Campaign Committee
Ron Paul 2012 Presidential Campaign Committee
Gary Howard, 855-886-9779
Sunday, March 18, 2012
Peace & Respect
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| John Lennon on Violence |
Ron Paul's Foreign Policy: Peace & Respect - Not Intimidation, Bribes & War
Wednesday, March 14, 2012
An Administration Gone Rogue
Hear Congressman Paul read his weekly Monday morning column aloud at 888-322-1414
The Essay is updated every Monday morning.
An Administration Gone Rogue
Essay by Ron Paul for week of March 12, 2012
Have certain parts of the Constitution become irrelevant, as a former Republican leader once told me at a Foreign Affairs Committee hearing? At the time, I was told that demanding a Congressional declaration of war before invading Iraq, as Article I Section 8 of the Constitution requires, was unnecessary and anachronistic. Congress and the president then proceeded without a Constitutional declaration and the disastrous Iraq invasion was the result.
Last week, Obama administration officials made it clear that even the fig leaf of Congressional participation provided by the 2003 "authorization" to use force in Iraq was to be ignored as well. In a hearing before the Senate Armed Services Committee, Defense Secretary Leon Panetta stated clearly and repeatedly that the administration felt it was legally justified to use military force against Syria solely with "international permission". Such "international permission" could come by way of the United Nations, NATO, or some other international body. Secretary Panetta then told Senator Sessions that depending on the situation, the administration would consider informing Congress of its decision and might even seek authorization after the fact.
While Senator Sessions expressed surprise at the casual audacity of Panetta in making this statement, in reality his was just a bluntly stated explanation of what has been, de facto, the case for many years. When President Obama committed the US military to a pre-emptive war against Libya last year, for example, Congress was kept completely out of the process. Likewise, military action in Iraq, Pakistan, Somalia, Yemen, and so on, proceed without a Congressional declaration. In fact, we haven't had a proper, constitutional declaration of war since 1942, yet the US military has been engaged in Korea, Lebanon, Iraq, Bosnia, Liberia, Haiti, and Libya with only UN resolutions as the authority. Congress's only role has been authorizing funds, which it always does without question, because one must "support the troops".
Of course we should reserve our harshest criticism for Congress rather than the Administration. If the people's branch of government abrogates its Constitutional authority to the Executive branch, who is to blame? Who is to blame that Congress as a body will not stand up and demand that the president treat the Constitution as more than an anachronistic piece of paper, or merely a set of aspirations and guidelines? The Constitution is the law of the land and for Congress to allow it to be flouted speaks as badly about Congress as it does about a president who seeks to do the flouting.
Just last week the administration announced that it would begin providing material support to the rebels who seek to overthrow the Syrian government. Was Congress involved in this decision to take sides in what may develop into a full-fledged civil war? And what of reports that US special forces may already be operating inside Syria? Still, Congress sits silently as its authority is undermined. Does anybody really wonder why approval numbers for Congress are so low?
Many of my colleagues who stood by as then-President Bush used the military as a kind of king's army are now calling for Congress to act against this president for openly admitting that is his intent. I agree it is time for Congressional action in response to these attacks on our Constitution, but the solution is simple and Constitutional. The solution is simply voting to withhold funds, since Congress has the power of the purse. No money for undeclared wars!
The Essay is updated every Monday morning.
An Administration Gone Rogue
Essay by Ron Paul for week of March 12, 2012
Have certain parts of the Constitution become irrelevant, as a former Republican leader once told me at a Foreign Affairs Committee hearing? At the time, I was told that demanding a Congressional declaration of war before invading Iraq, as Article I Section 8 of the Constitution requires, was unnecessary and anachronistic. Congress and the president then proceeded without a Constitutional declaration and the disastrous Iraq invasion was the result.
Last week, Obama administration officials made it clear that even the fig leaf of Congressional participation provided by the 2003 "authorization" to use force in Iraq was to be ignored as well. In a hearing before the Senate Armed Services Committee, Defense Secretary Leon Panetta stated clearly and repeatedly that the administration felt it was legally justified to use military force against Syria solely with "international permission". Such "international permission" could come by way of the United Nations, NATO, or some other international body. Secretary Panetta then told Senator Sessions that depending on the situation, the administration would consider informing Congress of its decision and might even seek authorization after the fact.
While Senator Sessions expressed surprise at the casual audacity of Panetta in making this statement, in reality his was just a bluntly stated explanation of what has been, de facto, the case for many years. When President Obama committed the US military to a pre-emptive war against Libya last year, for example, Congress was kept completely out of the process. Likewise, military action in Iraq, Pakistan, Somalia, Yemen, and so on, proceed without a Congressional declaration. In fact, we haven't had a proper, constitutional declaration of war since 1942, yet the US military has been engaged in Korea, Lebanon, Iraq, Bosnia, Liberia, Haiti, and Libya with only UN resolutions as the authority. Congress's only role has been authorizing funds, which it always does without question, because one must "support the troops".
Of course we should reserve our harshest criticism for Congress rather than the Administration. If the people's branch of government abrogates its Constitutional authority to the Executive branch, who is to blame? Who is to blame that Congress as a body will not stand up and demand that the president treat the Constitution as more than an anachronistic piece of paper, or merely a set of aspirations and guidelines? The Constitution is the law of the land and for Congress to allow it to be flouted speaks as badly about Congress as it does about a president who seeks to do the flouting.
Just last week the administration announced that it would begin providing material support to the rebels who seek to overthrow the Syrian government. Was Congress involved in this decision to take sides in what may develop into a full-fledged civil war? And what of reports that US special forces may already be operating inside Syria? Still, Congress sits silently as its authority is undermined. Does anybody really wonder why approval numbers for Congress are so low?
Many of my colleagues who stood by as then-President Bush used the military as a kind of king's army are now calling for Congress to act against this president for openly admitting that is his intent. I agree it is time for Congressional action in response to these attacks on our Constitution, but the solution is simple and Constitutional. The solution is simply voting to withhold funds, since Congress has the power of the purse. No money for undeclared wars!
Fed Up With The Fed - Essay by Ron Paul
Hear Congressman Paul read his weekly Monday morning column aloud at 888-322-1414
The Essay is updated every Monday morning.
FED UP WITH THE FED
Essay by Ron Paul for week of March 5, 2012
While the Fed has recently released an unprecedented amount of information on its activities, there is still much that remains unknown. Predictably, every push towards transparency has been fought tooth and nail. It took disclosure requirements enacted within the Dodd-Frank Act to get the Fed to provide data on its emergency lending facilities. It took lawsuits filed by Bloomberg and Fox News to provide data on discount window lending during the worst parts of the financial crisis. And it will take further concerted action on the part of Congress, the media, and the public to keep up pressure on the Fed to become and remain transparent.
Transparency is not a panacea, however, as a fully transparent organization is still capable of engaging in all sorts of mischief. Ironically, one of the Fed's more egregious recent actions, adopting an explicit inflation target, was hailed by many as another wonderful example of transparency. Yet if you think about what this 2% inflation target actually is, you realize that it is an explicit policy to devalue the dollar and reduce its purchasing power. And it adds up quickly over time. Two percent annual price inflation means that prices rise 22% within a decade, and nearly 50% within two decades.
It is worse than that, however. This explicit 2% target also fails to take into account that whatever measure is used to determine price inflation, be it CPI, core CPI, PCE, etc., will always be chosen with an eye towards underreporting the true rate of inflation and price rises. Pressure will be exerted on those calculating the price indices, so as not to alarm the public when prices begin to accelerate.
Of course, government officials claim that price increases do not affect the average American because they can always substitute hamburger for steak, or have cereal instead of bacon to protect their family budget as prices rise. But the American people don't overlook the fact that their quality of life has suffered because of the Federal Reserve and price inflation. What will they substitute when hamburger and cereal go sky high?
The Federal Reserve continues to keep interest rates low in the hopes of boosting lending and consumption. But keeping interest rates at zero discourages saving. Why stick money in a savings account earning 0.05% if it is guaranteed to lose at least 2% every year? The Federal Reserve created the largest debt bubble the world has ever known with these sorts of policies. The extended zero interest rate policy only eviscerates thrift and savings—the true building blocks of prosperity. Capital will continue to be depleted, infrastructure will fall into disrepair, and the United States will be a mere shadow of its former self.
It is well past time to end the failed monetary policy that encourages this mistaken preference for cheap money now, rather than real wealth in the long run. Transparency and a full audit of the Federal Reserve is a start and something we must continue to pursue. And, if those in power don't have the stomach to bring the Fed out into full daylight, the American people deserve at least the right to conduct their economic transactions in the medium of exchange of their choosing.
The Essay is updated every Monday morning.
FED UP WITH THE FED
Essay by Ron Paul for week of March 5, 2012
While the Fed has recently released an unprecedented amount of information on its activities, there is still much that remains unknown. Predictably, every push towards transparency has been fought tooth and nail. It took disclosure requirements enacted within the Dodd-Frank Act to get the Fed to provide data on its emergency lending facilities. It took lawsuits filed by Bloomberg and Fox News to provide data on discount window lending during the worst parts of the financial crisis. And it will take further concerted action on the part of Congress, the media, and the public to keep up pressure on the Fed to become and remain transparent.
Transparency is not a panacea, however, as a fully transparent organization is still capable of engaging in all sorts of mischief. Ironically, one of the Fed's more egregious recent actions, adopting an explicit inflation target, was hailed by many as another wonderful example of transparency. Yet if you think about what this 2% inflation target actually is, you realize that it is an explicit policy to devalue the dollar and reduce its purchasing power. And it adds up quickly over time. Two percent annual price inflation means that prices rise 22% within a decade, and nearly 50% within two decades.
It is worse than that, however. This explicit 2% target also fails to take into account that whatever measure is used to determine price inflation, be it CPI, core CPI, PCE, etc., will always be chosen with an eye towards underreporting the true rate of inflation and price rises. Pressure will be exerted on those calculating the price indices, so as not to alarm the public when prices begin to accelerate.
Of course, government officials claim that price increases do not affect the average American because they can always substitute hamburger for steak, or have cereal instead of bacon to protect their family budget as prices rise. But the American people don't overlook the fact that their quality of life has suffered because of the Federal Reserve and price inflation. What will they substitute when hamburger and cereal go sky high?
The Federal Reserve continues to keep interest rates low in the hopes of boosting lending and consumption. But keeping interest rates at zero discourages saving. Why stick money in a savings account earning 0.05% if it is guaranteed to lose at least 2% every year? The Federal Reserve created the largest debt bubble the world has ever known with these sorts of policies. The extended zero interest rate policy only eviscerates thrift and savings—the true building blocks of prosperity. Capital will continue to be depleted, infrastructure will fall into disrepair, and the United States will be a mere shadow of its former self.
It is well past time to end the failed monetary policy that encourages this mistaken preference for cheap money now, rather than real wealth in the long run. Transparency and a full audit of the Federal Reserve is a start and something we must continue to pursue. And, if those in power don't have the stomach to bring the Fed out into full daylight, the American people deserve at least the right to conduct their economic transactions in the medium of exchange of their choosing.
"Why Was the Federal Reserve Created?" - Ron Paul Fed Lecture Series, Pt 1/3
Ron Paul sponsored this Congressional lecture on "Why Was the Federal Reserve Created?", the introductory lecture in a three part series on the Federal Reserve System for Congressional staff. As a continuing educational tool this lecture was filmed and is provided to the public. The lecture was delivered by Dr. George Selgin, Professor of Economics at the Terry School of Business at the University of Georgia and author of a number of books on money and banking, such as "Bank Deregulation and Monetary Order" and "Good Money."
Prof. Selgin provides a short but comprehensive explanation of the institutional drawbacks of the United States banking system during the 19th century and how this fueled desire for financial reform. Unfortunately, as Prof. Selgin goes on to describe, the solution of allowing a free market in banking was rejected and instead another layer of government regulation was placed on the banking sector in the form of the Federal Reserve System.
Other lectures in the Fed series to follow:
Pt. 2: What Does the Fed Do? -- available late March 2012
Pt. 3: What is the Fed's Future? -- available May 2012
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