By Ron Paul
It has not been a good week for the Republic. It took quite a bit of trampling of the Constitution, but the bailout bill passed, as I suspected it would.
The bailout failed the first time it was brought to the House. Undaunted, the Senate pressed on by attaching the bailout as an amendment to another House passed bill that was pending in the Senate. The new bailout version had new taxes, so according to the Constitution it should not have originated in the Senate.
The rallying cry heard all over the Hill the past two weeks was that Congress must act. Our economy is facing a meltdown. Would this bill fix it? Nobody could really explain how it would. In fact, few demonstrated any real understanding of credit markets, of derivatives, of credit default swaps or mortgage-backed securities. If they did, they would have known better than to vote for this bill. All they knew was that this administration was saying some frightening things, and asking for a lot of money. And when has Congress ever been able to come up with a better solution to a problem than to throw more of your money at it? So that is what Congress did, enacting a financial PATRIOT Act in the process.
In its embarrassment at being called a "Do-Nothing Congress" the 110th Congress took decisive action and did SOMETHING. No matter that it was the wrong thing. In fact, it wasn't until the Senate had a chance to load it up with even MORE spending, when it was finally inflationary and horrible enough, at $850 billion instead of a mere $700 billion, that it passed – and with a comfortable margin, in spite of constituent calls still coming in overwhelmingly against it. 57 members switched their vote!
The market went down anyway. Our nation is now just that much more in the hole. You will pay your part of this mess through inflation, and very likely hyperinflation.
Sometimes doing nothing is much better than thrashing about aimlessly. When one is caught in quicksand, for example, or when one doesn't understand economics and finds oneself in the position Congress was in for the past two weeks, with decades of irresponsible monetary policy coming to a head. Why should we trust the same people who said just a few months ago that the economy was perfectly sound? The same people who just knew there were weapons of mass destruction? The same people that crammed the PATRIOT Act down our throats? Why not consult the people who had the foresight and understanding to see this coming? They would have recommended such logical actions as repealing the Community Reinvestment Act, which forces banks to make bad loans, or allowing the market to set interest rates instead of the Federal Reserve system. How about abolishing the Federal Reserve altogether? There are many things that could have been done, but don’t expect Congress take a course of action that comes from a place of understanding and competence when they could just spend money.
This bailout will be the legacy of the 110th "Do-Something" Congress, along with record low approval ratings. Here's hoping the 111th Congress will be a "Do the Right Thing" Congress, and will focus on repealing and abolishing what is wrong with government instead of reinforcing it.
Showing posts with label Bailout. Show all posts
Showing posts with label Bailout. Show all posts
Monday, October 6, 2008
Friday, October 3, 2008
What Should Our Government Do?
With the economy down... some people are looking to government to help them out. If you really study history and see the effects government had on our economy, you will find that government intervention really doesn't make things better. In fact government always makes things worse.
During the Great Depression of the 1920's and 30's, Franklin Roosevelt proposed and passed his "New Deal". Most people think that this helped us pull out of depression when in fact it only prolonged it.
Our now $850 billion bailout is the "New Deal" that our government is proposing. I urge you readers to oppose it and contact your congressmen and let your voice be heard. Government has no right to play around with our economy. This $850 billion bailout is only going to make our economy worse.
If it does pass, it will "help" the economy for a little while. I shouldn't say that it will "help" our economy because in the long run, it will make it worse. Three or four weeks down the road we will be in the same position we are in now...but worse.
So what should the government do? Nothing. Let the economy heal itself. The government cannot do anything to help it. The only thing government can do is make the economy worse. This bailout may give people a false sense of security at first but in the long run they'll regret it.
During the Great Depression of the 1920's and 30's, Franklin Roosevelt proposed and passed his "New Deal". Most people think that this helped us pull out of depression when in fact it only prolonged it.
Our now $850 billion bailout is the "New Deal" that our government is proposing. I urge you readers to oppose it and contact your congressmen and let your voice be heard. Government has no right to play around with our economy. This $850 billion bailout is only going to make our economy worse.
If it does pass, it will "help" the economy for a little while. I shouldn't say that it will "help" our economy because in the long run, it will make it worse. Three or four weeks down the road we will be in the same position we are in now...but worse.
So what should the government do? Nothing. Let the economy heal itself. The government cannot do anything to help it. The only thing government can do is make the economy worse. This bailout may give people a false sense of security at first but in the long run they'll regret it.
Thursday, October 2, 2008
Tell your Senator/Representative No!
As many of you know, the House will be voting again on the bailout within the next 24 hours. It passed the Senate already and many representatives are changing their minds....they want to vote yes! We need your help! Call or e-mail your representative! Tell them to vote no! We cannot let this pass! Here is a letter you can copy and paste:
Dear Representative/Senator:
I urge you to oppose Treasury Secretary Henry Paulson's $700 billion bailout of Wall Street.
The bailout:
- violates the Constitution by authorizing the Treasury to purchase bad mortgage-related assets.
- greatly enlarges our national debt and further erodes the value of our dollar.
- bails out Wall Street at the expense of Main Street by putting taxpayer funds at risk while freeing up banks to continue making bad loans.
Already, hundreds of billions of dollars have been spent bailing out Freddie Mac, Fannie Mae, and AIG, and the final price tag for those moves could result in trillions of dollars being added to our national debt.
The bailout plan ignores the fundamental reason why our economy is in such crisis: the Federal Reserve and the federal government's interference in the market and manipulation of the money supply spurred major banks and other corporations to back bad mortgages.
Adopting this proposal will only continue the same flawed practices and greatly worsen the long-term effects.
The way out of this current economic crisis is to return to the principles that made this nation great: constitutionally-limited government, personal freedom, low taxes, and a belief in sound money.
I am asking that you strengthen our economy by taking action to:
1.) End the Bailouts - The Federal Reserve's authority to use taxpayer money to bail out Wall Street must be revoked and the Fed must be held accountable.
2.) Cut Taxes and Curb Regulation - If we really want to stimulate businesses and revive the market, we need to cut corporate and capital gains taxes, spurring investors to come back to the market and making it easier to attract new workers and clients. It is also time to repeal failed legislation like Sarbanes-Oxley, which has crippled capital markets, diminished our competitiveness, and greatly harmed small businesses.
3.) Reduce Spending - We must freeze all non-entitlement spending by the federal government at current levels and eliminate wasteful spending both domestically and in our trillion-dollar overseas budget. Our debt has to come down, and it won't until we start living within our means. Reducing spending and cutting the debt will strengthen our dollar and reduce our cost of living.
4.) Reform the Monetary System - If we are to have long-term economic progress, we must end the system of printing money out of thin air. The current laws limiting the circulation of gold and silver-backed currency must be overturned.
Thank you for your attention in regard to this matter. I will be closely watching as events unfold over the next several days. A vote to approve the bailout plan will cost you my vote for your next reelection bid.
Sincerely,[Your name]
To find the phone number or e-mail address for your Senator/Representative go to www.Congress.org and you will be asked to put your zip code in. Once you put it in it will bring up your senators/and representatives. I hope you will do your best in fighting this bailout plan.
Dear Representative/Senator:
I urge you to oppose Treasury Secretary Henry Paulson's $700 billion bailout of Wall Street.
The bailout:
- violates the Constitution by authorizing the Treasury to purchase bad mortgage-related assets.
- greatly enlarges our national debt and further erodes the value of our dollar.
- bails out Wall Street at the expense of Main Street by putting taxpayer funds at risk while freeing up banks to continue making bad loans.
Already, hundreds of billions of dollars have been spent bailing out Freddie Mac, Fannie Mae, and AIG, and the final price tag for those moves could result in trillions of dollars being added to our national debt.
The bailout plan ignores the fundamental reason why our economy is in such crisis: the Federal Reserve and the federal government's interference in the market and manipulation of the money supply spurred major banks and other corporations to back bad mortgages.
Adopting this proposal will only continue the same flawed practices and greatly worsen the long-term effects.
The way out of this current economic crisis is to return to the principles that made this nation great: constitutionally-limited government, personal freedom, low taxes, and a belief in sound money.
I am asking that you strengthen our economy by taking action to:
1.) End the Bailouts - The Federal Reserve's authority to use taxpayer money to bail out Wall Street must be revoked and the Fed must be held accountable.
2.) Cut Taxes and Curb Regulation - If we really want to stimulate businesses and revive the market, we need to cut corporate and capital gains taxes, spurring investors to come back to the market and making it easier to attract new workers and clients. It is also time to repeal failed legislation like Sarbanes-Oxley, which has crippled capital markets, diminished our competitiveness, and greatly harmed small businesses.
3.) Reduce Spending - We must freeze all non-entitlement spending by the federal government at current levels and eliminate wasteful spending both domestically and in our trillion-dollar overseas budget. Our debt has to come down, and it won't until we start living within our means. Reducing spending and cutting the debt will strengthen our dollar and reduce our cost of living.
4.) Reform the Monetary System - If we are to have long-term economic progress, we must end the system of printing money out of thin air. The current laws limiting the circulation of gold and silver-backed currency must be overturned.
Thank you for your attention in regard to this matter. I will be closely watching as events unfold over the next several days. A vote to approve the bailout plan will cost you my vote for your next reelection bid.
Sincerely,[Your name]
To find the phone number or e-mail address for your Senator/Representative go to www.Congress.org and you will be asked to put your zip code in. Once you put it in it will bring up your senators/and representatives. I hope you will do your best in fighting this bailout plan.
Monday, September 29, 2008
Lipstick on a Bailout
by Ron Paul
This time last week, the biggest bailout in the history of the world seemed to be a fait accompli. Last weekend, the Fed Chairman and the Secretary of the Treasury had harsh words of doom and gloom for Congressional leaders, with the rest of the administration parroting along, and by last Monday it seemed both parties were about to fall in line and vote our Republic away by socializing the banking industry through this bailout.
Foolish business behavior was about to be rewarded, and propped up a little longer, the bubble blown a little bigger, and our coming Depression made that much greater, but then something happened on the way to the House floor.
Citizens made their voices heard.
The real story behind the story in Congress this week was the thousands of calls and emails sent to Representatives, clogging up inboxes and even slowing down the House internet system. Slowly, like the Titanic turning around, sentiments on the Hill shifted, and we heard Congressmen capitulating and changing their tune a little, desperately trying to find ways to salvage the bailout without completely enraging their constituencies.
Now we hear about taxpayer protections, about golden parachutes, and about other nuances that hardly cover up the fact that we would be creating more money out of thin air and further devaluing the dollar! The problem is not HOW the government is spending this money; it’s the fact that the government is spending this money. We don’t have it. We are already nearly $10 trillion in debt, not including unfunded liabilities. We already spend about $1 trillion a year we don’t have on our overseas empire. Now nearly $1 trillion more is somehow supposed to magically appear and solve all our problems! No – creating more money might delay the inevitable for some well-connected banks on Wall Street, but in a few weeks we will find ourselves right back in this same position, but much poorer.
The unfortunate thing is that we’ve already spent at least $700 billion on other bailouts that did not solve the problem. And while all this negotiation was taking place, the auto industry was quietly bailed out, with no controversy, no discussion, to the tune of $25 billion.
Inevitably, it appears Congress will call their constituents’ bluff and the bailout will pass, because that is the habit Wall Street and Washington have fallen into. People are right to be concerned about our financial future. I’ve been talking for 30 some years about reasons we need to be concerned and change our ways. We find ourselves now in a position of no good options, and no silver bullets. But the worst thing we can do is to compound our problems by intensifying the mistakes of the past. We do have tough economic times ahead, no doubt, no matter what we do, even if we do nothing. The question, is will we have the courage to take our medicine now and get it over with, or will we prolong the misery for many years to come? I’m less and less optimistic about the answer to that question.
This time last week, the biggest bailout in the history of the world seemed to be a fait accompli. Last weekend, the Fed Chairman and the Secretary of the Treasury had harsh words of doom and gloom for Congressional leaders, with the rest of the administration parroting along, and by last Monday it seemed both parties were about to fall in line and vote our Republic away by socializing the banking industry through this bailout.
Foolish business behavior was about to be rewarded, and propped up a little longer, the bubble blown a little bigger, and our coming Depression made that much greater, but then something happened on the way to the House floor.
Citizens made their voices heard.
The real story behind the story in Congress this week was the thousands of calls and emails sent to Representatives, clogging up inboxes and even slowing down the House internet system. Slowly, like the Titanic turning around, sentiments on the Hill shifted, and we heard Congressmen capitulating and changing their tune a little, desperately trying to find ways to salvage the bailout without completely enraging their constituencies.
Now we hear about taxpayer protections, about golden parachutes, and about other nuances that hardly cover up the fact that we would be creating more money out of thin air and further devaluing the dollar! The problem is not HOW the government is spending this money; it’s the fact that the government is spending this money. We don’t have it. We are already nearly $10 trillion in debt, not including unfunded liabilities. We already spend about $1 trillion a year we don’t have on our overseas empire. Now nearly $1 trillion more is somehow supposed to magically appear and solve all our problems! No – creating more money might delay the inevitable for some well-connected banks on Wall Street, but in a few weeks we will find ourselves right back in this same position, but much poorer.
The unfortunate thing is that we’ve already spent at least $700 billion on other bailouts that did not solve the problem. And while all this negotiation was taking place, the auto industry was quietly bailed out, with no controversy, no discussion, to the tune of $25 billion.
Inevitably, it appears Congress will call their constituents’ bluff and the bailout will pass, because that is the habit Wall Street and Washington have fallen into. People are right to be concerned about our financial future. I’ve been talking for 30 some years about reasons we need to be concerned and change our ways. We find ourselves now in a position of no good options, and no silver bullets. But the worst thing we can do is to compound our problems by intensifying the mistakes of the past. We do have tough economic times ahead, no doubt, no matter what we do, even if we do nothing. The question, is will we have the courage to take our medicine now and get it over with, or will we prolong the misery for many years to come? I’m less and less optimistic about the answer to that question.
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