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Ron Paul: The Congressional Budget Debate Is Just A Sideshow

Posted on March 17, 2013 by Ron Paul 2012

by Ron Paul

Federal spending once again dominated the debate in Washington last week, as House Republicans and Senate Democrats began work on their ten-year budget plans. Contrary to claims, neither party’s budget reduces spending. While the Republican plan increases spending a little less than the Democrat plan, it would still spend $5 trillion in 2023, an almost two trillion dollar increase over this year’s budget.

Of course, these projections of future budgets are meaningless, as a current Congress cannot bind a future one. Therefore, the projected spending for next year is the only part of the budget with any significance. So is there a great gulf between the two parties’ budgets for next year? No. For fiscal year 2014, the Democrat budget proposes spending $3.7 trillion, while the “radical” Republican budget spends $3.5 trillion!

While the two parties bicker over minor differences in spending, the stock market, which many in Washington predicted would crash unless the parties reached a “grand bargain” on taxes and spending, seems unaffected by the various manufactured budget crises. Unfortunately, the market’s indifference to Washington spending games is based on the fallacy that the deficit does not matter as long as the Federal Reserve is willing to monetize the federal debt.

Federal Reserve Chairman Ben Bernanke is certainly doing all he can to facilitate deficit spending. The Federal Reserve’s desire to monetize the federal debt is a main reason for the aggressive program of buying federal debt via the continuous quantitative easing. Under Chairman Bernanke, the Federal Reserve is pumping as much as $85 billion a month into the American economy. This out-of-control monetary policy is largely conducted behind closed doors, yet it has much more effect on the do day-to-day lives of Americans than Congress’s phony budget debates. The Federal Reserve’s polices erode the value of the dollar, causing prices to rise, which in turn diminishes people’s standard of living. This inflation tax may be the most hideous tax of all because it is both hidden and regressive.

Of course, the Federal Reserve can only keep this up for so long before doing serious damage to the economy. The Austrian school of economics teaches that the Federal Reserve is responsible for the boom-and-bust cycles that plague modern economies. The Federal Reserve’s aggressive money pumping runs the risk of creating hyperinflation — especially once banks stop hoarding their reserves and began flooding the economy with Fed-created fiat currency.

Even though the economic crisis of 2008 proved the Austrians correct, there are still too many in D.C. and on Wall Street who believe the Keynesian fallacy that government and the Federal Reserve can spend-and-inflate our way to prosperity. But, as is the case with the narcotics addict, the longer the Federal Reserve enables Congress’s habit of deficit spending, the more painful will be the withdrawal when Congress is finally forced to kick the habit.

The role of the Federal Reserve in facilitating deficit spending by the US—and even foreign governments—means it is a mistake to segregate monetary and fiscal policy. Our nation will never get its fiscal house in order until we reform monetary policy. The first step is letting the American people know the real facts about the Federal Reserve’s actions.

The debate over the federal budget and even the battle over the Federal Reserve are ultimately arguments over symptoms rather than the cause. The root of the fiscal crisis is the belief that the federal government is qualified to manage the economy, provide for the people’s needs, and spread democracy throughout the world through either by foreign aid or by force of arms. Neither party in Washington questions the welfare-warfare state.

Until Congress begins debating questions such as whether or not we really need thousands of military facilities around the world, whether or not we should shut down the Education Department and return control to local communities and parents, and whether we should allow young people to completely op-out of the entitlement programs, the so-called debates in Washington, D.C. will continue to amount to nothing but sound and fury, signifying nothing.

Congress, Drones, and The Imperial Presidency

Posted on March 11, 2013 by Ron Paul 2012

by Ron Paul

Last week the US Senate took a break from debating the phony cuts known as “sequestration,” for Senator Rand Paul to hold a 13-hour filibuster to force the Obama administration to state whether it believes the President has the right to kill American citizens with drones on US soil. I find it tragic that there has to be a discussion on an issue that should be so self-evident.

However, feeling the pressure, the administration finally said “no,” but in language so twisted that no one should feel in the slightest bit reassured. According to Attorney General Eric Holder, the president does not believe he has the right to use the military to kill an American who is “not engaged in combat on American soil.” Left undefined is how the administration defines “combat.” As constitutional scholar Jonathan Turley wrote last week, “one can easily foresee this or a future president insisting that an alleged terrorism conspiracy is a form of ‘combat’.”

The administration’s outrageous response to the most serious Constitutional question of all — when a government can kill its own citizens — is clear evidence of an executive branch out of control.

Many of the drafters of the Constitution envisioned the presidency as an office with very limited powers, but even the most dedicated proponents of a strong presidency at the time would be shocked to see the concentration of power in the modern presidency.

Today the presidency is viewed as the center of the federal government, with each successive administration expanding the power of the executive at the expense of Congress and the people.

Ironically, some of the worst offenders are those who campaigned promising to reverse the power grabs of their predecessors. For example, candidate George W. Bush campaigned on a “humble foreign policy,” but as president he attacked Iraq based on his own administration’s lies and claimed the right to indefinitely detain anyone he deemed an “enemy combatant.”

Candidate Barack Obama promised he would reverse his predecessor’s constitutional abuses. Yet not only has President Obama not closed Guantanamo Bay, he reportedly holds weekly meetings in the oval office to draw up “kills lists,” uses drones against American citizens, and routinely sends the US military into combat abroad without even consulting Congress!

The modern use of “executive orders” also usurps the lawmaking function of Congress. The most notable recent example was President Obama’s January series of executive orders on gun control, but unfortunately there are countless other examples over the last several administrations.

Ultimately, the fault for the expansion of presidential power lies with Congress. Too many members of Congress are all too eager to avoid responsibility for controversial actions, preferring to “pass the buck” to the president. For example, Congress no longer declares war, but instead passes an “authorization of force” telling the president he can go to war when or if he wants!

On domestic policy, Congress passes large, vaguely-worded pieces of legislation and leaves it to the president and the bureaucrats to fill in the details. Many members of Congress score points with their constituents railing against “the faceless D.C. bureaucrats” while never mentioning that they voted for the law that gave the bureaucrats their power!

Last week, a group of “fiscally conservative” senators even tried to give President Obama more authority over spending as a part of sequester replacement that would have “required” Obama to decide where to reduce spending and where to increase it. They want to restrain the president by giving him more authority?

Growth of executive power is a threat to liberty. Fortunately, Congress can restrain the executive simply by exercising its constitutional powers. The American people must demand that Congress stop passing the buck on its foreign and domestic policy responsibilities. If the people care about liberty, they will demand their representative stand up to the imperial president. Let us hope last week’s filibuster will give Congress the backbone it needs to do its job.

Posted in Foreign Policy | Tagged Drones, Rand Paul | Leave a comment

Ron Paul: The Sequester ‘Crisis’ And What Should Be Done

Posted on March 3, 2013 by Ron Paul 2012

by Ron Paul

Despite what the media and politicians would have us believe, the United States did not collapse last Friday when the package of spending reductions known as “sequestration” went into effect. The financial markets hardly blinked, as they have come to be more skeptical about these periodic government-hyped “crises.”

What had been portrayed as a drastic reduction in government spending was merely a decrease in the projected rate of increase in government spending over the next decade. Under sequestration, government spending increases by $2.4 trillion over the next 10 years rather than $2.5 trillion without it.

So we are speeding toward collapse at only 100 miles per hour instead of 110 miles per hour.

Some in Congress are using the panic over sequestration to justify another surrender of legislative authority to the executive branch. These members want to “pass the buck” on prioritizing federal programs by giving the president, cabinet officials, and high-level bureaucrats authority to set spending priorities. However, it is Congress’s job to set priorities in federal spending.

The drafters of the Constitution give the legislature the authority over spending because they recognized it was a threat to liberty to allow this power to be concentrated in the executive branch. Congress’s willingness to cede more authority to the executive should be opposed by everyone who values liberty and limited government.

Some of the loudest objections to sequestration have come from the champions of the military-industrial complex. Yet under sequestration defense spending will still increase by 18 percent over 10 years as opposed to 20 percent without sequestration.

There are claims that the military will face a one-time real reduction back to 2007 levels of spending, before beginning to climb again next year. That remains to be seen. However, few claimed at the time that 2007 levels of military spending, occurring as they did during the huge post 9/11 build-up, were inadequate.

But despite the fact that the US spends more on military than the rest of the world combined, we are told that even this modest, short-term reduction would be, in the words of outgoing Defense Secretary Leon Panetta, “shameful” and “irresponsible.” A return to 1980’s levels of military spending in real dollars – a time of significant military build-up – is considered outrageous even though the US faces no Soviet Union or equivalent threat.

In fact, the entire $1.2 trillion dollars that the sequester is supposed to save could be realized by cutting one unneeded, wasteful boondoggle: the $1.5 trillion F-35 fighter program. The F-35, billed as the next generation all-purpose military fighter and bomber, has been an unmitigated disaster. Its performances in recent tests have been so bad that the Pentagon has been forced to dumb-down the criteria. It is overweight, overpriced, and unwieldy. It is also an anachronism: we no longer face the real prospect of air-to-air combat in this era of 4th generation warfare. The World War II mid-air dogfight era is long over.

As defense analyst Winslow Wheeler wrote last year:

“It’s time for Defense Secretary Leon Panetta, the U.S. military services, and Congress to face the facts: The F-35 is an unaffordable mediocrity, and the program will not be fixed by any combination of hardware tweaks or cost-control projects. There is only one thing to do with the F-35: Junk it.”

We should not look for cancellation of the F-35 program any time soon, however. The military industrial complex understands the political necessity of spreading its military Keynesianism as widely across Congressional districts as possible.

That is why F-35 manufacturer Lockheed-Martin can boast on its website that “the F-35 provides 127,000 direct and indirect jobs in 47 states and Puerto Rico.” What is unfortunately not understood is that these 127,000 workers would be far better utilized producing needed goods and services rather than treated as a jobs program disguised as national defense.

Despite the alarm over cuts that are not real cuts, it is clear that the US government is not serious at all about changing its ways. In a recent tour of the Middle East, newly-confirmed Secretary of State John Kerry announced that the US would be sending another $60 million to the rebels seeking to overthrow the Syrian government – in the midst of the sequester “crisis”!

Despite the rhetoric, there appears no intention on the part of the government to take our fiscal crisis seriously or abandon the idea that we should run the rest of the world.