Cures for Our Economic Disease [Ron Paul]

U.S. Rep. Ron Paul, R-Texas, 14th District ^ | 2009-02-02

[rabscuttle385]

I have recently had several opportunities on various news programs to discuss the economy and what is wrong with the so-called economic stimulus package. I have said over and over what we shouldn’t be doing, and now I’d like to explain what we should be doing.

But to improve the situation, you must first have a solid grasp of how we got here. Government policies and central planning created the housing bubble, now going bust. About a decade ago the government made expanded homeownership and affordable housing a public goal. Through Fannie Mae, Freddie Mac and the secondary mortgage market the government incentivized creative, low down-payment, more widely available mortgage products, and discouraged the market-proven lending standards of the past. The Federal Reserve kept interest rates artificially low, which added more fuel to this fire. Many related sectors temporarily flourished because of this, and many people got into homes they otherwise could not have afforded. The increased demand for housing sent prices soaring until in many markets housing became even more unaffordable, necessitating even more creative mortgages, and impossibly leveraging homeowners. Many risky investment vehicles such as mortgage-backed securities, derivatives, credit default swaps grew out of this unsustainable situation. As the foreclosures began, the house of cards started to tumble. Too many people have confused the symptoms and the pain of the bust with the problematic policies that caused the bubble, which is really what needs to be treated.

First of all, just as the best cure for a hangover is not to drink so much, the best cure for a recession is a recession. It is time to sober up and return to free market sanity, risk and reward, supply and demand, without political intervention. Politicians are good at catering to the needs of special interests, but very bad at determining what needs to take place in the market. Government should stick to punishing fraud and enforcing contracts. When they use the tax code, bureaucratic departments and their manipulative rules and regulations to dictate social and economic behavior, we end up with distortions and malinvestments. Bailing out banks, continuing failed Fed policies and strapping the taxpayer with toxic debt will worsen the pain, and punish the innocent.

If Congress really wanted to do something helpful, it would cut taxes. Ideally, we would repeal the income tax altogether and get the IRS off the economy’s back, which would be a huge boon. We should also cut spending. Cut every unconstitutional department and program, every wasteful governmental encroachment on the people’s liberty and money, starting with our massive overseas empire. The cost of our empire is bringing us to our knees, just as the Soviets’ empire did to them. Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests.

These things would constitute real change, real economic stimulus. The plans being bandied about Washington are just more of the same. As long as no one seriously considers the cure, we are unfortunately destined to prolong the disease.

[Bokababe]

“And yet Ron Paul got the largest amount of support of any 2008 presidential candidate, from the soldiers who actually do “defend our nation” “ Where did you get this absurd idea?

Put the keywords "Ron Paul, military support" into any search engine and see what you find. It was all over the news before the primaries.

[King of Card Games]

[ovrtaxt]

Jim, if we continue to spend a $trillion a year on maintaining our current foreign policy (which Obama isn’t going to change), we won’t have a country to keep secure in the first place.

Something has to give. I don’t like our enemies either, but reality is reality, and numbers don’t lie. Sure we can default on all our foreign debt, but can we afford to make even more enemies? We would have to withdraw our global presence anyway if we did that.

I used to share your opinion on our foreign policy, but not anymore. There is no other choice but to change it, and deal with our domestic weaknesses- or we may face a totalitaian future by default.

[traviskicks]

You think we should be in 130 countries? Providing for the defense of Japan, Europe and South Korea, so they can spend money on social programs? Ron Paul is as right on foreign policy as he is on domestic policy.

[monday]

“I suspect that worked in 1776. The founders punted the Islamic problem down the road. We had plenty of time...then.”

Ever hear of the Barbary wars? They didn't punt, they kicked Islamic @ss though. Of course back then they fought wars like they meant it. They didn't conquer someone then babysit them for years afterward building them schools and hospitals. The truth is we wouldn't have an Islamic problem either if we acted more like them.

[Names Ash Housewares]

No, he’s wrong on as much as he is right on things.

Pulling back from the global stage means other nations will dictate the course of human history. Both militarily and economic.

Screw that.

[Richard Kimball]

Yeah, Ron Paul gets nowhere because he cranks half the population with his isolationism and the other half because he understands free market economics. He either hits the bulls eye or shoots the guy standing behind him.