Deficits, Dollar, Federal Reserve, Individual v. Collective, Live and Learn, Taxes, Treasury, Trust

Ron Paul Explains Mistakes in U.S. Economic Policy

The State of Global Finance

While lawmakers rush to “fix” current economic problems, Ron Paul asks us to consider why we’re here in the first place.

Choice quotes:

“We cannot expect correct policies to be implemented if we don’t understand the cause of the crisis.”

“A massive single-year debt increase of $2 trillion and a $9 trillion stimulus by Congress and the Federal Reserve, verges on madness. This has entailed taxpayers being forced to buy worthless assets, propping up malinvestments, not allowing the liquidation of bad debt, bailing out privileged banking, Wall St. and corporate elites. We promote artificially low interest rates which eliminates information that only the market can provide. Steadily sacrificing economic and personal liberty is accepted as good policy.”

Inflating the money supply over 100% in less than a year, is no way to restore confidence to a failing financial system. Expect huge price increases in the future. We have set the stage for further expanding the money supply many folds over through fractional reserve banking. We deliberately liquidate debt, especially government debt, by debasing the currency. We refuse to accept the fact that the debt cannot be paid, and future obligations are incomprehensible, with revenues crashing, and unpredictable, while expenditures are put on autopilot with no new requests being denied.”

It makes so much sense when he says it. I wish somebody making decisions in the world of global finance and government, would listen.

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2 thoughts on “Ron Paul Explains Mistakes in U.S. Economic Policy

    • The debt is out of control. The Treasury will have an increasingly difficult time selling Treasury bonds in order to finance the debt. Right now, they’re trying to raise in excess of $150 billion/month for this year’s deficit alone. They’ve brought back the 3-year bond due to an inability to sell longer-term debt, like 30-year notes. The credit risk to loan money to the U.S. is growing, so investors do not want to be exposed for a long period of time. On top of that, investors are requiring higher interest rate returns to put their money at risk. When the Treasury is forced to raise interest rates on bonds, interest rates on mortgages and credit cards go up for American citizens. This will accelerate foreclosures and make it difficult for housing to stabilize.

      To respond directly to the NYT article, I would agree, program cuts are inevitable. Government spending has to be reeled in for our generation to have any chance at living in a prosperous economy. I think the Times states that tax increases are inevitable because they expect tax revenues to decline, due to the recession. The debate rages on as to the most effective way to maximize tax revenues. The Laffer curve states the basic problem: at some point, increasing tax rates on the producers in an economy will decrease tax revenues. Personally, I’d rather see a massive cut in the size of government, thus drastically reducing government spending; and the implementation of a simple, straight-forward fair tax. Flipping through 67,000 pages of tax code eventually reaches diminishing marginal returns.

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