"Ron Paul has yet to win a Republican primary or caucus. But his aim is to steadily gain delegates, building a movement and perhaps getting recognition at his party's nominating convention." - The Christian Science Monitor, January 22nd - 2012.
"Dr Ron Paul, who on the issue of money and the Federal Reserve - has been right for 25 years. There is no doubt that his critique of fiat money, of inflation and the Federal Reserve is absolutely in the right direction - and something I can support strongly" - Newt Gingrich
Congressman Ron Paul is running as a Republican Presidential candidate in the current US elections. At the time of writing, he is very much the under-dog in this race. Many see him as merely the head of a symbolic movement, rather than a serious candidate for Presidency. However, his message has been garnering an increasing amount of popular support for some years; particularly with respect to his views on domestic economic policy (as can be seen in the Newt Gingrich quote above). As a politician, he has garnered a reputation as being consistent in both his beliefs and voting record, as well as his personal integrity. He has been portrayed by the mainstream media as somewhat of an outsider, a man representing the "libertarian" niche of the Republican party. Libertarians, in a nutshell - are a group of people who have very strong convictions in limiting the powers of the Federal government and protecting "property rights" and "individual liberty". They often see themselves as champions of "the free market". Ron Paul does somewhat differ from the other candidates in the Republican field; at least..in his rhetoric and voting record. He strongly opposes bills such as The Patriot Act and the more recent National Defence Authorization Act - which seriously impact the liberties and rights of individuals inside the United States. He has vociferously opposed the bailouts of the banks, as well as opposed the wars overseas. His views on the post-9/11 attacks on civil liberties, his pro-drug policy and foreign policy have drawn quite a few "progressives" (essentially the mainstream American left-wing) to supporting him as a candidate for President. At first glance, Ron Paul seems like an attractive choice for people on both sides of the political spectrum, even if he does have a few unpalatable views on the role of social programs such as government healthcare and social security. However, Ron Paul is not as attractive a candidate as many people have been led to believe, and therefore - if he bows out of the Republican race, it may not be that much of a consequence for America or the world.
On an evening in New Hampshire, earlier in January - Ron Paul gave a speech in front of his supporters. Some of his words were particularly revealing:-
Ron Paul: "This is the first presidential campaign that the subject ever came up since the Federal Reserve was started. So we are now -- because of what is happening, it will remain a dominant issue. There’s no way they’re going to put it to bed, because they have destroyed our money. It’s worldwide. There’s a financial crisis going on. And it’s only sound money and personal liberty that can solve the crisis that we have today."
"So just -- just as we have been able to bring to the forefront that most important issue of funny money, fiat money, the paper money system, the Federal Reserve, we have brought to the forefront -- others have tokenly talked about it."
Ron Paul points a straight accusation at the Federal Reserve for destroying the money of the United States. He then points to "sound money" as one of his solutions. The Federal Reserve is certainly a questionnable institution, and is not really worthy of defending (but I'll get to that later). The words "sound money" are an allusion to gold-backed or silver-backed money (which will also be explored later). Ron Paul mentions "paper money", but one should ask the question: - Isn't most of the money in the United States (if not, the world) created on computer in the form of credit? Why place the sole blame on the Fed? Why not blame the regulators and their delegators who failed to do their jobs?
Ron Paul: "They -- they -- they argue that that is the case. But the thing of it is, the people, the bleeding hearts -- and I understand them and I recognize them, and I believe most of them are well intended -- but it doesn’t work, is the problem. All that good intentions, of saying, we’re going to give everybody a free house and have no loans and then they can borrow against, you know, the equity, and look what happened. It was a bubble. It burst. And they lost their houses."
While it is sensible and logical to criticise such a scenario of lending that Ron Paul depicts.....in reality; there is more to this. Ron Paul's statements miss the cruel reality of leverage-fraud (criminal actions) committed by the banking institutions.
On the 18th of November, Ron Paul gave a speech at a Town Hall meeting in Anamosa, Iowa. His official website labels the speech with the title "Ron Paul explains the economic crisis". Again, I have extracted some of the more notable parts of his speech for critical commentary:-
Ron Paul: "We’re seeing the consequence of many, many, decades of spending too much, allowing our government to grow, allowing our liberties to be undermined, allowing our military to do so many things it shouldn’t be doing and neglecting the things it should be doing."
Ron Paul: "way back after World War II was over and they devised a monetary system called the Bretton-Woods Agreement; nobody was to have a true gold standard, but we would have a partial gold standard. And our country was the wealthiest and we had some 700 million ounces of gold, more than any other country ever held. So they said, “Well, the dollar will be as good as the gold, so all the other currencies will be connected to the dollar”. And they thought that meant that it would be as good as gold forever. But there was one man by the name of Henry Hazlitt who, in 1944 when they set this up, said, “It won’t work, the governments will be tempted, and particularly our government, to print too much money”, and they did that. So more dollars were printed, we gave a lot of money away as foreign aid, the money went overseas, and the commitment was that anybody that turned in $35 could get an ounce of gold, if you were a foreigner. If you were an American, you weren’t even allowed to own gold. So anyway, that happened, and our gold supply went from over 700 million ounces of gold down to under 300 million ounces of gold. And that happened in 1971, Richard Nixon said, “No more gold standard”, he eliminated the gold standard with an executive order, and it was on that day that it dawned on me what age we were ushering in"
One of the key questions to ask here is whether the government is actually printing too much money? Or is it printing too much debt-based money (i.e. credit) at the behest of the privately-owned Federal Reserve? The answer to this question is really the latter:-
"A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a name inherited from the Demand Notes that they replaced in 1862. Often called Legal Tender Notes, they were called United States Notes by the First Legal Tender Act, which authorized them as a form of fiat currency" http://en.wikipedia.org/wiki/United_States_Note
Is the Federal Reserve a government institution? No. But that will be explored later.
Another question to ask of Ron Paul's speech is -: What makes gold and silver so special? Is it really the only thing that deserves to be fit into the category of "sound money"? England had a system where the majority of the money in circulation was in the form of tally-sticks for over 700 years. I produced a blogpost about this here. Gold is a product of the wealthy, and has been historically controlled by the wealthy. Should the wealthy owners of gold and silver control the quantity of money in circulation? These are serious questions to ponder. Wouldn't it be better to have a monetary system that meets the needs of those who are most in need? That meets the need of infrastructure? That is backed-up not only by real physical resources, but also by the willingness of people to labor for the purpose of creating a happier work-life balance?
Ron Paul: "You take the housing crisis that we have, people really wanted people to have a house, which is a good incentive. I happen to believe that if you want the maximum number of people to have a house, you ought to do it the old fashioned way: hard work, effort, pay, save your money, and build and pay for your house. I think that’s the way we get the best. But no, we wanted an easy ride, so the Fed said, “We’ll create the money that you need, we’ll pass out the money to the banks and they can make these loans. And the loans will be guaranteed”. Then it got out of control, the banks started speculating, they had derivatives and there was gambling going on and they created the housing bubble. But when you pump a lot of money into an industry, people may get houses, but also the prices go up. Initially people say, “Well, that’s wonderful, my $100,000 house is worth a $150,000, so I’ll go out and borrow more money”. So the whole thing went on for 20 years or so, so there was an obvious bubble there. So the bubble burst, as was predicted,"
Ron Paul lays the blame at the Federal Reserve's door. While the Fed shares the blame, it did NOT simply "create the money" that the banksters needed. Many derivatives are simply created out of thin air by private banks all the time, there is a lot of global interbank lending going on and a lot of this activity was fraudulent:-
"As a white-collar criminologist and former financial regulator much of my research studies what causes financial markets to become profoundly dysfunctional. The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.1 When the person that controls a seemingly legitimate business or government agency uses it as a "weapon" to defraud we categorize it as a "control fraud" ("The Organization as 'Weapon' in White Collar Crime." Wheeler & Rothman 1982; The Best Way to Rob a Bank is to Own One. Black 2005). Financial control frauds' "weapon of choice" is accounting. Control frauds cause greater financial losses than all other forms of property crime -- combined. Control fraud epidemics can arise when financial deregulation and desupervision and perverse compensation systems create a "criminogenic environment" (Big Money Crime. Calavita, Pontell & Tillman 1997.)"
http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html
William K.Black is a former regulator. He does not mince his words. Here he is on PBS, effectively accusing the Clinton, Bush and Obama administrations of criminal negligence:-
Ron Paul is saying the Fed controls the banks, whereas - in reality, the Fed is controlled by the banks (look at the sort of people who sit on the Board of the NY Fed for example):-
http://www.ny.frb.org/aboutthefed/orgchart/board/dimon.html
Ron Paul does not mention the word "criminal" at all. He uses the word "speculation", which is not inherently criminal given the fact it is a function of a typical market economy. Why is Ron Paul not demanding an end to the blatant protection of criminals in the Obama administration?
Ron Paul: "Congress created a trillion dollars and spent a trillion dollars bailing out the special interests. But the Fed created 15 trillion dollars, 5 of which went to overseas banks. Just the other day, when Bernanke had his press conference where they talk a lot about the debt crisis in Europe, he said, “We’ll stand by, we’re keeping an eye on it and, if necessary, to keep the banks solvent, we’re going to do it.” The only tool they have is to print more money. But now the confidence has been lost, the credit rating has been downgraded once recently, and it’s about to be downgraded again because our debt is too big. So, in the summertime, people are starting to realize the crisis."
Yes, it was blatantly wrong to bail-out the banking criminals who created the crisis - with all the fall-out of unemployment and wage-cuts that entails. The Fed should be brought to heel. The criminals should be punished, and seignority of debt and some form of monetary reform should occur. But Ron, who controls the rating agencies? (again - let us refer back to William K. Black who stated that the ratings agencies were complicit in the fraud due to their refusal to review loan files they were tasked with rating. They even gave triple-A ratings to cases that were saturated with fraud).
Ron Paul: "The truth is that we’re bankrupt and this can’t continue and, therefore, we have to cut spending. And this is why A. J. mentioned my program is asking for a modest cut in the first year; cut 1 trillion dollars, show the people we’re serious, and we need to cut spending."
How about - WE NEED TO STOP BORROWING FROM LEVERAGE-FRAUDSTERS, WHEN WE CAN CREATE MONEY DEBT-FREE! How about this Ron? Why not mention the American Monetary Institutes monetary reform plan? Why sacrifice a decent life and job for everybody for the sake of paying back debts to criminals? Ron Paul's austerity program is very severe. It is the sort of austerity that bankers are pushing for in places like Europe....for example:-
http://mobile.bloomberg.com/news/2011-12-13/monti-s-party-of-bankers-prompts-warning
Ron Paul is saying "we need to cut". But there is no such need. A sovereign nation is in charge of its money-supply. It has the power to create money debt-free and spend it on infrastructure repair or on other useful assets and projects. It has this power, just as much as it has the power to prosecute fraudsters in financial institutions and demand compensation for the damage they have wrought worldwide. If there do need to be cuts, it should really be in the form of excess waste of energy and useless production that does little to improve the quality of life for most people (but that's another issue which will be briefly explored later).
Ron Paul: "And under these conditions, it usually ends up with a currency crisis, runaway inflation, and everybody suffers, that means the checks bounce. Yes, the government keeps printing money, the prices soar."
How much money has the government really printed, Mr Paul?
Again - how much government-money is really being printed? Let's look at the ownership of the Federal Reserve:-
"It will be clear from the following points that the Fed is definitely not part of the US Government:
* The Fed is not organized within the Executive, Legislative or Judicial branches of our government.
* Who pays the Fed’s bills and determines its budget? Not any part of our government. The Fed gets its funding from its own specially privileged operations. The Fed Board determines Fed budgets.
* Who monitors and oversees Fed activities? Again the Fed itself. While some important elements of proper auditing have taken place, there has not yet been a comprehensive independent audit, by the Government Accountability Office as proposed in a recent letter from Ralph Nader to new Fed Chairman Ben Bernanke, calling for greater monetary transparency.
* Federal Reserve Employees are not part of the US Civil Service System and are not covered by government employees’ health insurance or pension programs. Who does the hiring and firing? Except for the highly publicized Chairman and 7 member Washington Board, this is in private, unelected hands.
* Federal Reserve Banks are not listed as government organizations by the telephone companies, a small but telling fact.
Here is how the Fed describes the Control situation, in the FAQ’s on its website:
“As the nation’s central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as “independent within the government.”
http://www.monetary.org/is-the-federal-reserve-system-a-governmental-or-a-privately-controlled-organization/2008/02
Federal Reserve notes are not United States Notes. The Fed is a private body operating under a government facade.
Ron Paul: "Even today, those on retirement, fixed incomes, and Social Security, are not keeping up with the cost of living. So their income is actually going down. Well, if we don’t do something about it, that will be accelerated, it will be massive. And the more people need something, and the more the government tries to give it to them, the worse the problem will get. That is why I think it’s so important that, we as a people, come together and say, “The problem is too much government, too much spending, too much special interests, we have to cut something”. So where are we going to start to cut? Well, I have a list of the priorities, and I think at the top of the priority on where I would cut, is all the overseas spending and welfare and foreign aid and all the activities. We should have a government designed to take care of us here at home, that is where I think we should start."
Do people not deserve decent lives Mr Paul? Why should their living standards come down, while the super-rich continue to run away with hordes of money?
Economic researcher David DeGraw (and founder of the 99% movement) wrote the following:-
"Just look at the bailout of Wall Street: trillions of dollars in national wealth were given to the people who engaged in fraudulent activity and crashed the economy. They then used the public’s wealth to give themselves all-time record-breaking bonuses. And now, while the rich people who caused this crisis have never been richer, the government is giving them tax breaks and cutting vital programs that we need to keep our society functioning. To say that America has descended into a neo-feudal banana republic is not using bombastic rhetoric or hyperbole, it is a technical fact to anyone who spends time analyzing our current economic and socio-political condition."
http://ampedstatus.org/the-richest-0-1-have-launched-a-war-on-us-its-time-to-fight-back-and-hold-these-400-billionaires-personally-responsible-for-our-economic-crisis/
No chance of getting these people to give the money back to the people, Mr Paul? Are the multi-billionaires in the US angrily marching in the streets over the actions of the tiny percentage of bankers who have bankrupted their own institutions and the country? Are they offering to invest their money into protecting the poor or creating decent jobs for the needy? Or offering training schemes to help people into decent jobs? No! The unemployment situation remains, and politicians seem to be offering nothing more than austerity.
Cuts to domestic spending
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On Ron Paul's Presidential campaign website, you can find a document titled "Plan To Restore America". In this ambitious document, Ron Paul and his team set out their aims to cut $1 trillion out of the budget in one year. Most of the cuts come out of programs such as Medicaid and nutritional programs for pregnant mothers (domestic programs), rather than the majority of cuts coming from defence and military spending. This goes directly against Ron Paul's statement above where he said:-
"Well, I have a list of the priorities, and I think at the top of the priority on where I would cut, is all the overseas spending and welfare and foreign aid and all the activities. We should have a government designed to take care of us here at home, that is where I think we should start."
One of the more concerning cuts in this programme, are the cuts to foreign aid. In theory, the consequences of such cuts could result in more deaths than all of those in the post-9/11 wars put together. Ron Paul proposes cutting ALL US foreign aid. Some of this aid is very bad - i.e. it goes to corrupt groups around the world, and food aid is often used as an economic weapon. However, there are situations where natural disasters do occur and there are serious questions as to whether charity donations from most citizens will be sufficient. Will the rich members of society donate generously? Which charities can be trusted? Before all government emergency aid programmes are scrapped - there should be serious contemplation as to the consequences. Given that the US provides the majority of all the emergency food aid on the planet (originally started as a result of JFK's "Food for Peace" programme), this COULD amount to a lot of potential deaths as a result of such cuts. It could shock the world. Cutting Aid to 0% does not sound very humanitarian.
It is actually impossible for Ron Paul to cut $1 trillion out of the US budget (in one year) without cutting more domestic spending than military spending. This makes it odd for a "progressive" or "left-wing" person to support him as a person with the right priorities. The sheer amount of domestic cuts he makes, have no justification - when prosecuting the banksters (who caused the debt-crisis in the first place) and enacting monetary reform (debt-free money) would make far more sense. Again, there has been no word from Ron Paul about the criminal leverage-fraudsters in Wall-Street. Instead, he continues to push the traditional conservative-libertarian line of "too much government printing" as causing the crisis. But the government borrows from fraudsters and bankers - it doesn't create its own debt-free money (except for coinage - which makes up a tiny fraction of the money supply).
Ron Paul voted for Ronald Reagan to be President (even though he later berated Reagan for being a defecit-spending failure), and then - in the recent 2012 election campaign; USED Ronald Reagan in political adverts for his campaign. He clearly wants to attract the hard-right element of the Republican base - nevermind the fact that most Americans are far to the left of that position (some say that it was apathy that gave the US Ronald Reagan). This Pew Research survey yielded some interesting results as to the political positions of the US public:-
http://www.people-press.org/2011/12/28/little-change-in-publics-response-to-capitalism-socialism/
It is possible to criticize Ron Paul from a libertarian "free-market" position. For example, Ron Paul publically defended Romney's exploits with Bain capital:-
“I think they’re wrong. I think they’re totally misunderstanding the way the market works,” Paul told me. “They are either just demagoguing or they don’t have the vaguest idea how the market works.”
http://abcnews.go.com/blogs/politics/2012/01/abc-exclusive-ron-paul-defends-romney-lashes-out-at-his-critics/
“You know, they come in and say, look, restructuring in the free market is a good idea, and I don’t know anything about Bain, so I’m not taking a position on that, and I haven’t looked at it and I have no idea what he did or didn’t do, but the principle of restructuring is a good thing in the marketplace,” he said.
http://thehill.com/blogs/blog-briefing-room/news/203419-ron-paul-defends-romney-against-bain-attacks
Perhaps Ron Paul should've bothered to do research before commenting. Or maybe he could've just said "I don't know anything about Bain, so I'm not taking a position on that".
While Romney was at Bain, he took over a South Carolina steel company, screwed it up and then dumped the pensions obligations onto the federal Pension Benefit Guaranty Corporation. The taxpayer had to pay $44 million, rather than the seignority of debt process via the asset-stripping parasites from Romney et al. This is not the behaviour of "the free market".
Ron Paul's intention of ending the Fed (even though it is not stated in his "Plan To Restore America") will not fix the economy. Ron Paul needs to have a program for government revenue, WITHOUT causing huge amounts of pain for everybody else - or making people work 12+ hours a day at even lower wages.
Ron Paul also has problems with "regulating" the financial sector. A sector that is barely even regulated already! The "regulators" are brought in by the same criminals who caused the crisis! Regulation is needed to ensure that these CEO's (whom former regulators like William K. Black have mentioned) don't get away with flooding the market with liars loans like they did to produce this crisis. In essence, regulation is just a means of enforcing existing fraud laws via the mandating of specified protocols.
The man on the left is known as "Chainsaw Gilleran". In 2003, he was the head of the Office of Thrift Supervision (OTS). A regulatory agency. Rather than promote good oversight of the banking institutions, he shows up at a press conference with a chainsaw pointed towards a pile of papers that symbolically depict "regulations" or "red-tape":-
Are these the sort of people that Ron Paul agrees with?
Does RP want to outlaw derivatives and CDS instruments? After all, that would make the job of banking regulation far easier and less laborious. I haven't heard him demand an end to them or any form of leverage fraud. Indeed, it was the Ronald Reagan admin that gutted regulation so that it would be much easier for fraud to go undetected. This deregulation continued under Clinton, then Bush and onto Obama. But sure - the "market" can regulate itself right? What is this "market"? And can it be trusted in the hands of financial predators? Former regulator William K. Black (who dealt with the SNL's) says that the Federal Reserve had the power to deal with the CEO's of these banks that had been involved in control fraud and liar's loans. But they never used it. Here he is testifying in front of the House Financial Services Committee:-
It my opinion, that the Federal Reserve should be nationalized and put under control of an independent body within the US government (rather than its current private Wall-Street control). Ron Paul would have the Fed abolished, regulations gutted and the bankers allowed to produce all sorts of "competing currencies". There is no evidence that this "free banking" experiment would work well, particularly if it allowed for the same sort of complex derivatives within an environment of lax regulation. Ron Paul has often promoted the idea of "gold"-backed money. The head of the World Bank called for a form of that two years ago (http://www.guardian.co.uk/business/2010/nov/08/world-bank-new-gold-standard), albeit Ron Paul followers would probably criticise it for being a half-baked gold-standard that is little different to Bretton Woods.
Ron Paul was clearly right to oppose the taxpayer bailing out the banks (while the other candidates did not). However, who did the majority of the bailouts? The privately-owned Federal Reserve. Again. How does that work? The Fed gets the Treasury to print "Federal Reserve" notes, but only for a tiny proportion of the economy. Most of the money is simply created on computer - and sent around the world. Ron Paul wants to end the Fed and would stop this bail-out process. But what is to stop the bankers from simply bailing themselves out via a central chamber of commerce in the private marketplace? They could simply create money out of thin air and then use it to buy various assets and debt-instruments (think of this as a privatised equivalent of the Quantitative Easing programmes that Central Banks have engaged in). The Federal Reserve has engaged in Quantitative Easing; and crucially - it is a privately-owned institution. It is beyond the oversight of the US Congress and other democratically elected people. But then again - so is "the market". Can the "market" be reformed to work for the people? And is Ron Paul offering such reforms?
Ron Paul claims to be a "champion of the Constitution" (his words from the 2008 elections). He even recently mentioned the Constitution in the same vein as the "The Ten Commandments":-
http://www.youtube.com/watch?v=H5NnPoH7HbI
Ron Paul often repeats the phrase from the US constitution "No State shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts". He has often used this to claim that the US government cannot print money. However, the provision cited in quotations above - is about the payment of debts with respect to individual states. The constitution also explicitly gives the Federal government the power to coin its own money.
Article 1, Section 8 of the Constitution states:
"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"
Paulites will use the word "coin" to tell you that this is referring to "gold" or "silver". However, as monetary researcher Bill Still said recently:-
"Coin" could be money made of leather according to the English usage of the day according to Professor Robert G. Natelson of Harvard (see my book, "No More National Debt"). Also, the U.S. Supreme Court has ruled that "coin" is, in essence a verb, thereby authorizing the issuance of paper money for the United States in Gulliard v. Greenman, 1884.
http://www.youtube.com/watch?v=wgn8_wRpUHA&feature=channel_video_title
Paulites may claim that Article 1, Section 8 only refers to regulation of government-created money, and not private money in circulation and thus, the government can allow the marketplace to produce competing currencies. This is possible. However, Ron Paul would damage the sovereignty of the United States government in the process. Libertarians are not interested in government sovereignty, of course. They're believers in a deregulated market-place.
Associate Justice of the Supreme Court Joseph Story (and famed defender of conservative "property rights") commented on this section of the Constitution by saying:-
"The power to coin money is one of the ordinary prerogatives of sovereignty, and is almost universally exercised in order to preserve a proper circulation of good coin of a known value in the home market. In order to secure it from debasement it is necessary, that it should be exclusively under the control and regulation of the government; for if every individual were permitted to make and circulate, what coin he should please, there would be an opening to the grossest frauds and impositions upon the public, by the use of base and false coin."
http://press-pubs.uchicago.edu/founders/documents/a1_8_5s10.html
Let us look at Article 1, Section 8 of the Constitution again (with the issue of monetary sovereignty in mind):-
"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"
The most important phrase here is "regulate the Value thereof". Ron Paul created a Bill that would repeal legal tender laws and push for competing currencies:-
"On March 15, Rep. Ron Paul (R-Texas) introduced H.R. 1098, better known as the “Free Competition in Currency Act of 2011,” which would repeal the legal tender laws in the United States Code (Section 5103 of Title 31). In its elegant simplicity (the bill is only three pages), it would be the first step to restoring a sound currency by allowing American citizens to choose which currency among competing currencies works best for them."
http://www.thenewamerican.com/usnews/congress/8972-ron-paul-wants-competing-currencies
This directly affects the ability of the Federal government in regulating "the Value thereof" with respect to money created inside the United States. The Constitution requires the government to regulate the quantity of money in circulation. Some people would argue that this only applies to government-created money, and again - their argument could be valid. However, it can also be argued that it could both erode monetary sovereignty and invite unregulated fraud and debt-deflation in the process. It is very important to state, that the US government does NOT regulate the quantity of money in circulation at this present time. The regulation is done by the privately-owned Federal Reserve and the big banks (such as JP Morgan Chase) that influence it directly. The criminals in a highly dysfunctional "market-place" are in control of the money-supply, and not a democratically elect. Ron Paul would simply allow for the existing big banks to continue creating new money as debt or new money claiming to be backed by assets. At the same time, he would prevent the government from creating money - unless it is "backed" by gold and silver. A very controversial move, to say the least.
In essence, he seems to want unregulated banking institutions to control the quantity of money. And what happens when the CEO's of banks cause another crash? Even, after the Federal Reserve stops existing? The fraudsters at these banking institutions could simply start purchasing gold and silver and other high-value assets and then the bankers and mining-company oligarchs could (in theory) have total control over everybody in the country. And what about loans to businesses? If there is not enough gold or silver or copper to back what they loan to you; then will people get a loan? Libertarian economist Murray Rothbard has written that the quantity or weight of gold is not a problem. But are there reliable empirical historical examples to support his views? It is very easy for economists to spin things so that the idea of expensive-money becomes attractive.
And once the "market" controls the power to create money - then they will control the State governments and the Federal government. They will most likely push for a regressive taxation system. Does this mean that people will have to rely on charity for decent schools, hospitals, infrastructure, social security, wage protections, etc. Why would gold-investors, silver-investors and unregulated bankers invest in your business unless they were convinced that you would make a profit within a decent time-frame? Why do that when your rivals are investing in global businesses or ventures with a high-velocity turn-over, hot-money speculation, and so forth? There are so many difficulties and dangers with a free "competing currency" system that Ron Paul is pushing for. The biggest danger comes with Ron Paul's idea of selling off government assets to private companies. If a debt-free currency (generated via a democratically-accountable elect) is maintained in order to give the people a decent safety-net, whilst improving their lives and prospects - then there could be a reasonable place for competing private currencies alongside a government one. Progressives pushing for Ron Paul, really need to contemplate these sort of things.
Ron Paul's domestic budgetary spending freezes and cuts are a very legitimate concern. Programmes offering high-protein meals to pregnant mothers, dental-health subsidies and general freezes to Medicaid are worrying. There is no evidence that private charity will fill the gap to a sufficient degree. Some may argue that this is only a spending freeze. However, the economic situation WILL continue to worsen and this will mean more people unemployed, and thus more people requiring the Federal and State governments' to assist them under programs such as Medicaid and S-CHIP. Who will these people turn to? Private charity? There WILL be a big shortfall and people will suffer needlessly as a result of these spending freezes. Rather than prosecuting the banksters and enacting fundamental monetary reform (that opposes the debt-based monetary system), Ron Paul is simply promoting austerity. The same austerity-programme that the political elite are pushing on Europe (albeit much harsher). Thankfully, Ron Paul does spare Medicare and Social Security from spending freezes - so his austerity could have been worse.
Cuts to Defense Spending
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Ron Paul's proposed Pentagon budget is very much within the post-9/11 world of global military spending. For example, his 2013 projection in the "Plan To Restore America" exceeds the spending for 2005. RP's plan shows Pentagon spending then INCREASING (very gradually) from 2013 to 2016.
From that chart you can see a $200 billion increase in military spending if you compare 2001 with RP's spending plans. What sort of significance does that have?
The POGO group (Project on Government Oversight) was quoted in the following Washington Spectator article as having discovered some interesting stats:-
"Since 2000, the Defense Department has spent more than $1.5 trillion on service contractors, with the contractors’ cost to taxpayers almost tripling each year. (Do names like Halliburton and Blackwater ring a bell?) POGO reports that the $200 billion the DOD spends on contractors each year is $50 billion more than what is spent on all uniformed personnel in the service branches. That is $50 billion more than was spent on all active duty, reserve, and national guard employed by the DOD." http://www.washingtonspectatorblog.org/home/2011/11/21/how-to-cut-445-billion-without-a-supercommittee-2/
In perspective, we can look at SOCOM (who are involved in over 75 countries) and look at their budget since 2001:-
"From a force of about 37,000 in the early 1990s, Special Operations Command personnel have grown to almost 60,000, about a third of whom are career members of SOCOM; the rest have other military occupational specialties, but periodically cycle through the command.
Growth has been exponential since September 11, 2001, as SOCOM's baseline budget almost tripled from $2.3 billion to $6.3 billion. If you add in funding for the wars in Iraq and Afghanistan, it has actually more than quadrupled to $9.8 billion in these years. Not surprisingly, the number of its personnel deployed abroad has also jumped four-fold."
http://www.atimes.com/atimes/south_asia/mh05df01.htm
By 2006, we had significant US troop and private contractor movements in Afghanistan and Iraq. If RP wants to bring troops home from Afghanistan and the Gulf regions and around the world - why does his budget projection show the same spending signature as the 2006 period? This is a crucial question. Somebody told me on a forum that Ron Paul's "Defence Spending" projections are down to the costs of treating veterans from the Iraq and Afghan wars. But this is blatantly untrue, as you can see here:-
"In a hearing before the panel on Wednesday, Heidi Golding, an analyst with the Congressional Budget Office, testified that the annual cost of caring for veterans from the Iraq and Afghanistan wars would nearly triple or more in the next decade, rising to $5.5 billion to $8.4 billion in 2020, from $1.9 billion in 2010.
In that hearing, Paul Rieckhoff, executive director of Iraq and Afghanistan Veterans of America, also raised concerns that veterans’ disability checks might not be paid if Congress fails to raise the debt limit next week.
With an annual budget of more than $125 billion, the Department of Veterans Affairs runs a nationwide health care system that cares for more than eight million people who have left military service, of which about 700,000 are from the current wars. The agency also administers disability compensation for millions of veterans wounded in service."
http://www.nytimes.com/2011/07/28/us/28veterans.html
There is, technically, nothing stopping RP from getting back down to 2001 levels. So why does his spending reflect 2006 levels with gradual increasing increments? Does Ron Paul and his team have a good excuse here? Or maybe they will change their defense-spending projections in another manifesto release? And if they do - can their integrity and consistency be trusted?
Ron Paul has given many public statements that oppose militarism. Here are some examples from a speech he gave at the University of Iowa back in October:-
"Buying weapons we don't need.and enriching the military-industrial complex. But that is complicated by people being talked into for patriotic reasons that
you can't resist any military spending and you have to endlessly fight wars - if not, you're not patriotic".
"We have no moral authority to force ourselves on other people, and we have no moral authority to accept this notion of pre-emptive war."
"I have argued for many years about a non-interventionist foreign policy and I've always been convinced I will win this argument. We will win this argument."
"The sooner we bring all our troops home, the better it will be for our economy"
"And this is not just bringing them home from the wars, we're bringing home from the leftovers from the old wars. Why are we in Japan? Korea? Germany?"
"We can immediately bring the troops home. Instead of building more and more bases overseas like we're doing now, we have 900 bases,. we're building
more of these drone bases - just aggravating the people of the world - I would say bring the troops home."
"They claim that we're in war against terrorism, and they use that term rather loosely because terrorism of course isn't a country - how can you declare
wars against terrorism. Terrorism is a tactic, it's a wicked mean tactic."
"This whole idea that we have to have a perpetual war going on is only there to make sure that we're intimidated and that if you don't obey exactly what
they want, you're unpatriotic"
http://www.ronpaul.com/2011-10-21/ron-paul-as-president-ill-bring-the-troops-home-immediately/
While Ron Paul opposed the Iraq war, he did vote for military action against "Al Qaeda" in 2001:-
http://www.guardian.co.uk/commentisfree/cifamerica/2011/jan/27/afghanistan-congress
As soon as this started to turn into a prolonged war; Ron Paul criticised the intervention as being a distraction from going after Bin Laden and Al Qaeda. The intervention in Afghanistan turned into an occupation. The important question to ask here, is - does Ron Paul know about the 9/11 cover-up? Is he aware that 9/11 is an unsolved crime (rather than an act of war)? Is he aware of government lies and treason? If so, why doesn't he speak out?
Have a watch of this video:-
Ron Paul was very defensive in his reaction to the question put by the ABC newsreader. He completely ridicules the idea "that the Bush administration might have known about the attacks ahead of time". But is it rediculous?
This is a compilation of mainstream news sources:-
http://www.buzzflash.com/perspectives/911bush.html
Has Ron Paul bothered to talk to 9/11 Family Steering Committee members about this important issue? Here is Jersey Girl Mindy Kleinberg speaking in 2004:-
And with regard to the question of "blowback" - is this really the whole story? Or is there something more nefarious? Researcher Nafeez Mosadeq Ahmed writes:-
"From the mid-1990s, bin Laden funded Chechen guerrilla leaders Shamil Basayev and Omar ibn al-Khattab to the tune of several millions of dollars per month, sidelining the moderate Chechen majority.21 US intelligence remained deeply involved until the end of the decade. According to Yossef Bodanksy, then-Director of the US Congressional Task Force on Terrorism and Unconventional Warfare, Washington was actively involved in ‘yet another anti-Russian jihad, ‘seeking to support and empower the most virulent anti-Western Islamist forces’. US Government officials participated in ‘a formal meeting in Azerbaijan’ in December 1999 ‘in which specific programmes for the training and equipping of mujahidin from the Caucasus, Central/South Asia and the Arab world were discussed and agreed upon’, culminating in ‘Washington’s tacit encouragement of both Muslim allies (mainly Turkey, Jordan and Saudi Arabia) and US “private security companies”… to assist the Chechens and their Islamist allies to surge in the spring of 2000 and sustain the ensuing jihad for a long time.’ The US saw the sponsorship of ‘Islamist jihad in the Caucasus’ as a way to ‘deprive Russia of a viable pipeline route through spiralling violence and terrorism’."
http://www.newint.org/features/2009/10/01/blowback-extended-version/
There is much more to the 9/11 cover-up, of course. For those who want to learn more, I suggest watching the documentary 9/11 Press For Truth - as it details the story of the victims' families who spear-headed the fight for the creation of the 9/11 Commission - in the face of resistance from the Bush administration. Perhaps Ron Paul is too scared to mention the more concerning aspects of the cover-up. However, if he had any integrity - the LEAST he could do would be to refer to the Family Steering Committee members who have demanded a new investigation, or do what Senator Bob Graham did and start talking about the need for accountability with regard to Saudi governmental involvement in the attacks. Why would the US government protect terrorist suspects? Is George W Bush judge, jury and executioner in these matters?
Since Ron Paul's "Plan To Restore America" has a post-9/11 defence-spending signature, there are real questions to whether he supports all the covert military interventions being conducted in over 100 countries that are being fought against "Al Qaeda" terrorists around the globe:-
http://www.thenation.com/article/162566/secret-war-120-countries
His record so far shows that he does not support such actions. However, his policy proposals suggest otherwise.
Having said all this - is Ron Paul the man who can save America? Don't buy the hype. However, despite some serious flaws in his ideology and intentions - there are clear indications that his record on the protections of domestic civil liberties outshines all the other well-known candidates. While he has consistently criticised the Federal Reserve, this economic criticism should really be launched at the debt-based money system generally (and his solutions in the form of private "free banking" are unpalatable and poorly marketed to the general public). His criticism of the major foreign military intereventions is strong and consistent, albeit there is legitimate concern as to whether he will even follow through with this. It's important to remember that George W. Bush spoke against the United States having so many military bases around the world and "nation-building" when he was campaigning in 2000. Then, of course - 9/11 happened. Choose your leaders carefully.
-UPDATE-
Jan. 26 (Bloomberg) -- The Pentagon will seek a $525 billion budget for fiscal 2013 and ask Congress for authority to close domestic military bases, according to a person familiar with plans to be announced today. In addition to the base-closing authority, Defense Secretary Leon Panetta will propose reducing military personnel and canceling the U.S. Army's C-27J transport plane. Hans Nichols reports on Bloomberg Television's "In the Loop." (Source: Bloomberg) http://www.youtube.com/watch?v=9MAbF5-X_TARon Paul's 2013 Pentagon budget is $500 billion. He has clearly restricted himself to a particular libertarian-bent caucus and Republican debates. He should've stood as an Independent. Someone told me that his Pentagon spending plans are out of fear that the public will not vote for him if they perceive he will be "weak" on defence. But that's nonsense. The majority of the electorate are very much in favour of cutting back the military by a big amount (i.e. bringing troops and contractors home from Afghanistan, Iraq and the Middle East). If there are sooo many progressives or independents wanting to vote for RP...why should they be unhappy about the Pentagon being cut to pre-9/11 levels? Clearly, either RP is not reaching these sorts of people or his campaign team are scared of Pentagon-lobbyists.
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