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From: 
Subject: Congressman Ron Paul: The Austrians Were Right

 


 





CONGRESSMAN RON PAUL:  THE AUSTRIANS WERE RIGHT




 
http://www.fourwinds10.com/siterun_data/education/public/news.php?q=12275808
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Fourwinds10.com on 11-25-08

 

 

Statement of Congressman Ron Paul

On the Floor of the United States House of Representatives 

November 20, 2008

 

Madame Speaker, many Americans are hoping the new administration will solve
the economic problems we face.  That's not likely to happen, because the
economic advisors to the new President have no more understanding of how to
get us out of this mess than previous administrations and Congresses
understood how the crisis was brought about in the first place.

Except for a rare few, Members of Congress are unaware of Austrian Free
Market economics.  For the last 80 years, the legislative, judiciary and
executive branches of our government have been totally influenced by
Keynesian economics.  If they had had any understanding of the Austrian
economic explanation of the business cycle, they would have never permitted
the dangerous bubbles that always lead to painful corrections.

 

Today, a major economic crisis is unfolding.  New government programs are
started daily, and future plans are being made for even more.  All are based
on the belief that we're in this mess because free-market capitalism and
sound money failed.  The obsession is with more spending, bailouts of bad
investments, more debt, and further dollar debasement.  Many are saying we
need an international answer to our problems with the establishment of a
world central bank and a single fiat reserve currency.  These suggestions
are merely more of the same policies that created our mess and are doomed to
fail.

 

At least 90% of the cause for the financial crisis can be laid at the
doorstep of the Federal Reserve.  It is the manipulation of credit, the
money supply, and interest rates that caused the various bubbles to form.
Congress added fuel to the fire by various programs and institutions like
the Community Reinvestment Act, Fannie Mae and Freddie Mac, FDIC, and HUD
mandates, which were all backed up by aggressive court rulings.

 

The Fed has now doled out close to $2 trillion in subsidized loans to
troubled banks and other financial institutions.  The Federal Reserve and
Treasury constantly brag about the need for "transparency" and "oversight,"
but it's all just talk - they want none of it.  They want secrecy while the
privileged are rescued at the expense of the middle class.

 

It is unimaginable that Congress could be so derelict in its duty.  It does
nothing but condone the arrogance of the Fed in its refusal to tell us where
the $2 trillion has gone.  All Members of Congress and all Americans should
be outraged that conditions could deteriorate to this degree.  It's no
wonder that a large and growing number of Americans are now demanding an end
to the Fed.

 

The Federal Reserve created our problem, yet it manages to gain even more
power in the socialization of the entire financial system.  The whole
bailout process this past year was characterized by no oversight, no limits,
no concerns, no understanding, and no common sense.

 

Similar mistakes were made in the 1930s and ushered in the age of the New
Deal, the Fair Deal, the Great Society and the supply-siders who convinced
conservatives that deficits didn't really matter after all, since they were
anxious to finance a very expensive deficit-financed American empire.

 

All the programs since the Depression were meant to prevent recessions and
depressions.  Yet all that was done was to plant the seeds of the greatest
financial bubble in all history.  Because of this lack of understanding, the
stage is now set for massive nationalization of the financial system and
quite likely the means of production.

 

Although it is obvious that the Keynesians were all wrong and
interventionism and central economic planning don't work, whom are we
listening to for advice on getting us out of this mess?  Unfortunately, it's
the Keynesians, the socialists, and big-government proponents.

 

Who's being ignored?  The Austrian free-market economists-the very ones who
predicted not only the Great Depression, but the calamity we're dealing with
today.  If the crisis was predictable and is explainable, why did no one
listen?  It's because too many politicians believed that a free lunch was
possible and a new economic paradigm had arrived. But we've heard that one
before-like the philosopher's stone that could turn lead into gold.
Prosperity without work is a dream of the ages.

 

Over and above this are those who understand that political power is
controlled by those who control the money supply.  Liberals and
conservatives, Republicans and Democrats came to believe, as they were
taught in our universities, that deficits don't matter and that Federal
Reserve accommodation by monetizing debt is legitimate and never harmful.
The truth is otherwise.  Central economic planning is always harmful.
Inflating the money supply and purposely devaluing the dollar is always
painful and dangerous.

 

The policies of big-government proponents are running out of steam.  Their
policies have failed and will continue to fail.  Merely doing more of what
caused the crisis can hardly provide a solution.

 

The good news is that Austrian economists are gaining more acceptance every
day and have a greater chance of influencing our future than they've had for
a long time.

 

The basic problem is that proponents of big government require a central
bank in order to surreptitiously pay bills without direct taxation.
Printing needed money delays the payment. Raising taxes would reveal the
true cost of big government, and the people would revolt.  But the piper
will be paid, and that's what this crisis is all about.

 

There are limits.  A country cannot forever depend on a central bank to keep
the economy afloat and the currency functionable through constant
acceleration of money supply growth.  Eventually the laws of economics will
overrule the politicians, the bureaucrats and the central bankers.  The
system will fail to respond unless the excess debt and mal-investment is
liquidated.  If it goes too far and the wild extravagance is not arrested,
runaway inflation will result, and an entirely new currency will be required
to restore growth and reasonable political stability.

 

The choice we face is ominous:  We either accept world-wide authoritarian
government holding together a flawed system, OR we restore the principles of
the Constitution, limit government power, restore commodity money without a
Federal Reserve system, reject world government, and promote the cause of
peace by protecting liberty equally for all persons.  Freedom is the answer.

 

Tags: austrian <http://acmjpress.acmj.org/?tag=austrian-economics>
economics, authoritarian <http://acmjpress.acmj.org/?tag=authoritarian> ,
bailout <http://acmjpress.acmj.org/?tag=bailout> , bernanke
<http://acmjpress.acmj.org/?tag=bernanke> , campaign for liberty
<http://acmjpress.acmj.org/?tag=campaign-for-liberty> , central bank
<http://acmjpress.acmj.org/?tag=central-bank> , commodity
<http://acmjpress.acmj.org/?tag=commodity> , community
<http://acmjpress.acmj.org/?tag=community-reinvestment-act>  reinvestment
act, congress <http://acmjpress.acmj.org/?tag=congress> , congressman ron
<http://acmjpress.acmj.org/?tag=congressman-ron-paul>  paul, conservatives
<http://acmjpress.acmj.org/?tag=conservatives> , credit
<http://acmjpress.acmj.org/?tag=credit> , currency
<http://acmjpress.acmj.org/?tag=currency> , deficit
<http://acmjpress.acmj.org/?tag=deficit> , dollar
<http://acmjpress.acmj.org/?tag=dollar> , economy
<http://acmjpress.acmj.org/?tag=economy> , empire
<http://acmjpress.acmj.org/?tag=empire> , executive
<http://acmjpress.acmj.org/?tag=executive> , fair deal
<http://acmjpress.acmj.org/?tag=fair-deal> , fannie mae
<http://acmjpress.acmj.org/?tag=fannie-mae> , fdic
<http://acmjpress.acmj.org/?tag=fdic> , fed
<http://acmjpress.acmj.org/?tag=fed> , federal reserve
<http://acmjpress.acmj.org/?tag=federal-reserve> , federal reserve
<http://acmjpress.acmj.org/?tag=federal-reserve-cartel>  cartel, fiat
<http://acmjpress.acmj.org/?tag=fiat-currency>  currency, fraud
<http://acmjpress.acmj.org/?tag=fraud> , freddie mac
<http://acmjpress.acmj.org/?tag=freddie-mac> , globalization
<http://acmjpress.acmj.org/?tag=globalization> , gold
<http://acmjpress.acmj.org/?tag=gold> , government
<http://acmjpress.acmj.org/?tag=government> , great depression
<http://acmjpress.acmj.org/?tag=great-depression> , house of
<http://acmjpress.acmj.org/?tag=house-of-representatives>  representatives,
hud <http://acmjpress.acmj.org/?tag=hud> , interventionism
<http://acmjpress.acmj.org/?tag=interventionism> , judiciary
<http://acmjpress.acmj.org/?tag=judiciary> , karl marx
<http://acmjpress.acmj.org/?tag=karl-marx> , keynesian economics
<http://acmjpress.acmj.org/?tag=keynesian-economics> , keynesians
<http://acmjpress.acmj.org/?tag=keynesians> , legislative
<http://acmjpress.acmj.org/?tag=legislative> , monetary system
<http://acmjpress.acmj.org/?tag=monetary-system> , money
<http://acmjpress.acmj.org/?tag=money> , new deal
<http://acmjpress.acmj.org/?tag=new-deal> , politicians
<http://acmjpress.acmj.org/?tag=politicians> , silver
<http://acmjpress.acmj.org/?tag=silver> , socialist
<http://acmjpress.acmj.org/?tag=socialist> , stalin
<http://acmjpress.acmj.org/?tag=stalin> , warmongers
<http://acmjpress.acmj.org/?tag=warmongers> 

acmjpress.acmj.org/ <http://acmjpress.acmj.org/?tag=austrian-economics> 

 

 

 

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