Lying Blabbermouths
by
Ron Paul
Recently
by Ron Paul: The
Sequester ‘Crisis’ and What Should Be Done
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 partyÂ’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 yearÂ’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 partiesÂ’ 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 marketÂ’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 ReserveÂ’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 CongressÂ’s
phony budget debates. The Federal ReserveÂ’s polices erode the
value of the dollar, causing prices to rise, which in turn diminishes
peopleÂ’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 ReserveÂ’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 CongressÂ’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
ReserveÂ’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 peopleÂ’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.
March
18, 2013
Dr. Ron
Paul was a Republican member of Congress from Texas.