We’ve come a long way baby, in 233 years!  The elite are still controlling our money, the corrupt, in and out of government, are still making billion (or is it trillion) dollar deals with the devil and the Congress and the President are trying to strip us of our freedom and sell America’s sovereignty to the third world, along with giving away our national wealth and resources.  Other than that, not much has changed.  In fact, we continue to repeat the same mistakes, over and over and over again, to the detriment of all Americans and to the destruction of our freedom and sovereignty.

President Andrew Jackson (1829 to 1837) knew what the central banks were doing and he closed them, paid off the national debt and returned the monetary system to gold and silver coins.  He said about the central banks:

“The paper-money system and its natural associations—monopoly and exclusive privileges—have already struck their roots too deep in the soil, and it will require all your efforts to check its further growth and to eradicate the evil.”

Jackson also said, while throwing the bankers out of the oval office:

“… You are a den of vipers and thieves.  I intend to rout you out, and by the grace of the Eternal God, I will rout you out,” and he did.

Jackson called paper money “rag money”.  He was right then and he is still right now.

Thomas Jefferson said to John Taylor in 1816 that: “I sincerely believe that banking establishments are more dangerous than standing armies…”.

President James Madison (1809 to 1817) said: “History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.”

These men knew what they were talking about.

In the end, it only took the money changers and the power brokers 81 years to undue the actions of Andrew Jackson and get their way again, by convincing the U. S. Congress and President Wilson that we needed another central bank, euphemistically called the Federal Reserve, which isn’t federal and it doesn’t have any reserves.

Congressman Louis T. McFadden (Rep. PA – June 1932) said of the Federal Reserve:  “The Federal Reserve banks are one of the most corrupt institutions the world has ever seen.There is not a man within the sound of my voice who does not know that this nation is run by the International Bankers.” McFadden also blamed the Great Depression on the Federal Reserve.  McFadden was right then and he is still right today.

The Federal Reserve, with the help of many socialist presidents and Congresses since 1913, have turned a once prosperous and wealthy nation, into a debtor nation by corrupting the phrase in the pre-amble of the U. S. constitution where it states: ”….. and promote the general welfare“.  As a result, every dollar we spend now represents debt and does not equal a fair measure of goods and services, as it should.  You would need $21.60 in 2007 to equal what a dollar was worth in 1913, prior to the establishment of the Federal Reserve.  Since 2000, the value of the dollar, thus each American’s buying power, has eroded by over 20%.

Socialist politicians in our government, for almost 100 years, for the purposes of remaining in power by exploiting the weakness in individuals who were looking for a free handout, worked in conjunction with the Federal Reserve to expand the money supply (debt) to pay for the handouts.  Not only was the public treasury pillaged for purely political reasons (that should be treason), but the American taxpayer also picked up the tab for the interest paid to the Federal Reserve and other countries for the loans and the hidden cost of inflation because of diluting the number of dollars in circulation.  This evil is still going on today, but the numbers are escalating exponentially.

The estimated liability for actual government debt and unfunded entitlement programs (Medicare, Medicaid and Social Security) for every man, woman and child in America, is estimated to be almost $350,000.  The Social Security unfunded liability is just shy of $14 Trillion.  Medicare’s unfunded liability is over $73 Trillion.  Both numbers are rising rapidly.

In light of the nation’s current financial black hole, which we are being dragged into by the sheer gravity of it, along with the failure of most government social programs, for the government to even be contemplating, much less debating the implementation of nationalized health care and cap and trade legislation, is not only fool hardy and grossly negligent, it is outright treason.

But as long as there are corrupt politicians who will exploit the weakness in humans for their votes and conspire with special interest groups, giant, international corporations and the Federal Reserve to create money out of thin air to pay for unconstitutional welfare and environmental protection programs, America’s airplane is on fire and is in a crash dive to the deadly sea of national bankruptcy, while Americans are headed for perpetual indentured servitude.

No!  Americans are already indentured (slaves) to America’s rising debt and the relief can only come from patriotic Americans who will bring this madness to an abrupt halt, first peacefully and if that doesn’t work, by any other means.

We claimed freedom from tyranny once before and if necessary, we can and will do it again.  We cannot let the bastards win, or the Revolution from which America was born and all the lives that were sacrificed since then to maintain our freedom, will have been for naught.

It is high time that free Americans everywhere, repeat the words of President Andrew Jackson, to the politicians of Washington DC and to those politicians elsewhere in state and local governments, “… You are a den of vipers and thieves.  We intend to rout you out, and by the grace of the Eternal God, we will rout you out,” and then do it.

President Jackson also said,  “it will require all your efforts to check its further growth and to eradicate the evil”, and indeed it WILL take the efforts of millions of Americans to “eradicate this evil.”

Ron Ewart [send him email] is President of the NATIONAL ASSOCIATION OF RURAL LANDOWNERS, an organization dedicated to re-establish, preserve, protect and defend property rights.

Statement at Hearing of the House Financial Services Committee, February 15, 2007

Transparency in monetary policy is a goal we should all support. I’ve often wondered why Congress so willingly has given up its prerogative over monetary policy. Astonishingly, Congress in essence has ceded total control over the value of our money to a secretive central bank.

Congress created the Federal Reserve, yet it had no constitutional authority to do so. We forget that those powers not explicitly granted to Congress by the Constitution are inherently denied to Congress – and thus the authority to establish a central bank never was given.

Of course Jefferson and Hamilton had that debate early on, a debate seemingly settled in 1913.

But transparency and oversight are something else, and they’re worth considering. Congress, although not by law, essentially has given up all its oversight responsibility over the Federal Reserve.

There are no true audits, and Congress knows nothing of the conversations, plans, and actions taken in concert with other central banks. We get less and less information regarding the money supply each year, especially now that M3 is no longer reported.

The role the Fed plays in the President’s secretive Working Group on Financial Markets goes unnoticed by members of Congress. The Federal Reserve shows no willingness to inform Congress voluntarily about how often the Working Group meets, what actions it takes that affect the financial markets, or why it takes those actions.

But these actions, directed by the Federal Reserve, alter the purchasing power of our money. And that purchasing power is always reduced. The dollar today is worth only four cents compared to the dollar in 1913, when the Federal Reserve started. This has profound consequences for our economy and our political stability. All paper currencies are vulnerable to collapse, and history is replete with examples of great suffering caused by such collapses, especially to a nation’s poor and middle class. This leads to political turmoil.

Even before a currency collapse occurs, the damage done by a fiat system is significant. Our monetary system insidiously transfers wealth from the poor and middle class to the privileged rich. Wages never keep up with the profits of Wall Street and the banks, thus sowing the seeds of class discontent. When economic trouble hits, free markets and free trade often are blamed, while the harmful effects of a fiat monetary system are ignored. We deceive ourselves that all is well with the economy, and ignore the fundamental flaws that are a source of growing discontent among those who have not shared in the abundance of recent years.

Few understand that our consumption and apparent wealth is dependent on a current account deficit of $800 billion per year. This deficit shows that much of our prosperity is based on borrowing rather than a true increase in production. Statistics show year after year that our productive manufacturing jobs continue to go overseas. This phenomenon is not seen as a consequence of the international fiat monetary system, where the United States government benefits as the issuer of the world’s reserve currency.

Government officials consistently claim that inflation is in check at barely 2%, but middle class Americans know that their purchasing power – especially when it comes to housing, energy, medical care, and school tuition – is shrinking much faster than 2% each year.

Even if prices were held in check, in spite of our monetary inflation, concentrating on CPI distracts from the real issue. We must address the important consequences of Fed manipulation of interest rates. When interest rates are artificially low, below market rates, insidious mal-investment and excessive indebtedness inevitably bring about the economic downturn that everyone dreads.

We look at GDP numbers to reassure ourselves that all is well, yet a growing number of Americans still do not enjoy the higher standard of living that monetary inflation brings to the privileged few. Those few have access to the newly created money first, before its value is diluted.

For example: Before the breakdown of the Bretton Woods system, CEO income was about 30 times the average worker’s pay. Today, it’s closer to 500 times. It’s hard to explain this simply by market forces and increases in productivity. One Wall Street firm last year gave out bonuses totaling $16.5 billion. There’s little evidence that this represents free market capitalism.

In 2006 dollars, the minimum wage was $9.50 before the 1971 breakdown of Bretton Woods. Today that dollar is worth $5.15. Congress congratulates itself for raising the minimum wage by mandate, but in reality it has lowered the minimum wage by allowing the Fed to devalue the dollar. We must consider how the growing inequalities created by our monetary system will lead to social discord.

GDP purportedly is now growing at 3.5%, and everyone seems pleased. What we fail to understand is how much government entitlement spending contributes to the increase in the GDP. Rebuilding infrastructure destroyed by hurricanes, which simply gets us back to even, is considered part of GDP growth. Wall Street profits and salaries, pumped up by the Fed’s increase in money, also contribute to GDP statistical growth. Just buying military weapons that contribute nothing to the well being of our citizens, sending money down a rat hole, contributes to GDP growth! Simple price increases caused by Fed monetary inflation contribute to nominal GDP growth. None of these factors represent any kind of real increases in economic output. So we should not carelessly cite misleading GDP figures which don’t truly reflect what is happening in the economy. Bogus GDP figures explain in part why so many people are feeling squeezed despite our supposedly booming economy.

But since our fiat dollar system is not going away anytime soon, it would benefit Congress and the American people to bring more transparency to how and why Fed monetary policy functions.

For starters, the Federal Reserve should:

• Begin publishing the M3 statistics again. Let us see the numbers that most accurately reveal how much new money the Fed is pumping into the world economy.
• Tell us exactly what the President’s Working Group on Financial Markets does and why.
• Explain how interest rates are set. Conservatives profess to support free markets, without wage and price controls. Yet the most important price of all, the price of money as determined by interest rates, is set arbitrarily in secret by the Fed rather than by markets! Why is this policy written in stone? Why is there no congressional input at least?
• Change legal tender laws to allow constitutional legal tender (commodity money) to compete domestically with the dollar.

How can a policy of steadily debasing our currency be defended morally, knowing what harm it causes to those who still believe in saving money and assuming responsibility for themselves in their retirement years? Is it any wonder we are a nation of debtors rather than savers?

We need more transparency in how the Federal Reserve carries out monetary policy, and we need it soon.

Ron Paul is a Republican member of Congress from Texas. His “Audit the Fed” bill, HR1207, currently has over 290 co-sponsors in the House of Representatives.  He is the author of seven books, including “The Revolution: A Manifesto,” and his latest, “End the Fed.”

Tem·po·rar·y – an adjective meaning lasting, used, serving, or enjoyed for a limited time. Derived from the Latin tempora rius, from tempus, tempor-, time.  Synonyms include temporary, acting, ad interim, interim, provisional. Antonym is permanent.

Governor Rendell continues to press for a temporary, 16 percent increase in the Personal Income Tax (PIT), which he argues is the state’s “best option” to balance the state budget.

He says a PIT increase wouldn’t be as bad since roughly half of Pennsylvania households would not pay it. For the half that would end up footing the tax bill, the Governor says the increase would be “less than $5 per week.”

Milton Friedman said:  “Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay.”

Although $5 may not seem a lot to the Governor, this “temporary tax” adds up to $20 a month, or $240 a year – money I am sure individuals would rather spend elsewhere.

From a look at the definition, “permanent” is an antonym of “temporary;” that is exactly what has become of other “temporary” tax increases throughout Pennsylvania history.

The most famous (or infamous) temporary tax is the 1936 Johnstown Flood Tax.  Enacted as a 10 percent tax on liquor, the toll was set to expire May 31, 1937.  Over the years, the sunset date was extended numerous times until the tax was made permanent in 1951.  The current rate is 18 percent.

A year prior to the Johnstown Flood Tax, the Cigarette Tax was enacted as another emergency tax of 0.1 cent per cigarette. It became permanent in 1951, and the current rate is 6.75 cents per cigarette.

Other “temporary” taxes include the Realty Transfer Tax – enacted in 1951 as a 1 percent temporary tax. The tax was made permanent in 1961 and the rate remains at 1 percent.

The Corporate Net Income Tax (CNI) was first imposed in 1935 at a rate of 6 percent.  The rate “temporarily” was raised in 1977 to 10.5 percent, which was made permanent in 1982.  In 1991, the rate reached a high of 12.25 percent, and in 1995, lowered to its current rate of 9.9 percent.

The Sales and Use Tax was enacted in 1953, and eventually evolved into support for public education.  The tax started at 1 percent and currently is at 6 percent. The initial 6 percent imposition was also to be temporary until 1969, however, later that year the 6 percent was made permanent. Philadelphia and Allegheny County impose another 1 percent on purchases in their jurisdictions.

The Personal Income Tax (PIT) was imposed in 1971 at 2.3 percent.  Throughout the years, the rate has varied and some increases automatically sunsetted.  The PIT reached its current high in 2003 when Governor Rendell raised the rate to its current 3.07 percent.

As you can see, temporary taxes are rarely temporary and higher taxes are simply no good for Pennsylvania’s future or economic recovery. We must get government spending under control and have additional choices other than raising taxes – even if only “temporary.”

Mike Folmer [send him email] of Lebanon, Pennsylvania is a Pennsylvania State Senator who represents the 48th Senate district, which includes all of Lebanon County and portions of Berks, Chester, Dauphin and Lancaster Counties.

In 1819 U.S. Supreme Court decision “McCullough v. Maryland,” Chief Justice John Marshall wrote, “An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation.”

Today, 190 years later, Pennsylvania Governor Ed Rendell has called for a 16 percent increase in the Personal Income Tax, saying, “The simple truth is we have no good choices. There are no shortcuts out of this crisis, no magic bullets, no painless path out of this morass. We can do the easy thing for the moment or the right thing for Pennsylvania’s future. The fairest plan is to spread the pain across the board, and let our economic recovery begin.”

I disagree higher taxes are good for Pennsylvania’s future or economic recovery and believe we have additional choices other than raising taxes.

Our nation was founded because Americans were upset about taxes.  The colonists were angry their government spent their money without giving them a say.  Patrick Henry gave the rallying cry, “no taxation without representation.”

What would our Founding Fathers feel about our nation today?   While we have taxation with representation, we certainly are taxed…a lot. The federal government spends trillions (and incurs trillions in additional debt) and states spend billions; despite which level of government (federal, state, county, municipal, or school district) spending you refer to, it is all taxpayer money – your money.

Regardless if you advocate for larger government or smaller government, one thing is certain – government is getting bigger and the private sector is getting smaller, particularly in Pennsylvania.  This certainly was not the vision of Founding Fathers like Thomas Paine, who said, “that government is best which governs least.”

Governor Rendell said his proposed tax increase will “only” cost taxpayers a few dollars each week.  He also said the burden will not fall upon those least able to pay, and insists the increase will be “temporary” (hopefully, more temporary than the Johnstown Flood Tax of 1936).

How we spend the people’s money – your money – does matter.  Taxes should always be the last resort – especially during troubled economic times. People are hurting, jobs are being lost, and the future is uncertain.  Government is the only entity that seems to grow and ask for more when money is tight.

We should not – and we cannot – forget the principles on which our nation was founded:  fair taxes, transparency in the expenditure of those dollars, and recognition that those who pay the bills should not be expected to pay more.  It’s your money.  Government needs to live within its means and not expect any more from you when they don’t.

Mike Folmer [send him email] of Lebanon, Pennsylvania is a Pennsylvania State Senator who represents the 48th Senate district, which includes all of Lebanon County and portions of Berks, Chester, Dauphin and Lancaster Counties.

Last week, General Motors finally declared bankruptcy.  Many in government thought $20 billion in taxpayer dollars would save the company, but as predicted, it only postponed the inevitable.  The government will dump another $30 billion into GM and take a 60 percent controlling interest for it.

Public officials are now involving themselves in tactical business decisions such as where GM’s headquarters should move and what kind of cars it will build.

The promise that this is temporary and will eventually be profitable is supposed to ease the American people into accepting this arrangement, but it is of little comfort to those who remember similar promises when the American taxpayers bought Amtrak.  After three years, government was supposed to be out of the passenger rail business.

40 years and billions of dollars later, the government is still operating Amtrak at a loss, despite the fact that they have created a monopoly by making it illegal to compete with Amtrak.  Imagine what they can now do to what is left of the great American auto industry!

In a truly free market, GM would get your money one way and one way only – by selling you a car you want, at a price you are willing to pay.  Instead, the government is giving public money to a private company in spite of the market signals it has been sending.

Throwing money at GM does not stop it from being an engine of wealth destruction; on the contrary, it simply gives it more wealth to destroy.

Had it been allowed to fail naturally, the profitable pieces of GM would have been bought up and put to good use by now.  The laid off employees would likely have found new jobs and all that capital would be in private hands, reinvested in companies that produce products demanded by consumers.  Instead, we are all poorer now.

Political pressure, rather than the rule of law, is deciding how to divide up the remains of GM.  The bondholders had billions in retirement savings invested in the company, and though they were entitled to nearly three times as much as the United Auto Workers, the bondholders were left with just a 10 percent stake compared to the union’s 17.5 percent stake.   For their 60 percent stake, taxpayers have a future of constant bailouts to look forward to.

Comingling public control of private business is known as fascism.  While today’s politicians may feel emboldened with all their new power, history will only repeat itself as all this collapses on itself.

It is the height of hubris for bureaucrats and politicians to attempt to control the market and the freewill of the American people.  In the end, the market always wins out.

Maybe one day future generations will wise up and allow free markets to function and thrive without the albatross of government around its neck.  For now, it looks like those in charge have not learned the lessons of the past, and have doomed us to repeat those mistakes once again.

Ron Paul is a republican member of Congress from Texas.

Recently I have grown deeply concerned with the potential power grab by the central government over credit card interest rates. In a time of weak economic conditions in many industries and the overall economy in general, the White House and Congress assume they have the power and responsibility to lower credit card rates and greatly increase regulation over the industry, in order to protect the consumer.

Prior to 1937, Congress’s role in the regulation of commerce was quite simply defined as the “movement of goods” between states, and put most production and manufacturing outside of the regulatory power of Congress. This definition has essentially been abandoned ever since the Supreme Court, in 1937, upheld an act allowing Congress to regulate many aspects of labor through the National Labor Relations Board.

Before this case, activities within the states were left strictly to the states to regulate and it was out of the boundaries of the federal government to intervene. Today, this description of regulation would be laughed at by the bureaucrats in Washington arguing to regulate practically anything that the government doesn’t already have its hands on.

The issue of whether credit card rates and businesses should be regulated is a viable discussion. Traditionally, and constitutionally, this is an issue that should absolutely be left to the states. It is a local issue and not an interstate issue, thus taking it out of Congress’s regulation jurisdiction. At least, this is what the case would have been before 1937 when a more clear interpretation was used to define the Commerce Clause in the Constitution.

The troubling aspect of the new potential regulations of credit cards is that it is the Federal Reserve Board who is making many of the new decisions and regulations limiting credit-rate increases, set to take effect in 2010. Now, think for a moment.

If it used to be out of the constitutional boundaries of Congress to regulate local and state matters like credit card rates, where on earth does the Federal Reserve get the constitutional authority to set and carry out these regulations? It is troubling that the Constitution can be trampled on this much without so much as a peep asking where the constitutional authority for these powers is derived from.

The issue of whether these regulations are needed or worthwhile is one thing. But rough problems today will easily turn into a disaster tomorrow if there is no check on government. Today we are seeing a federal government with few boundaries or concern for following the Constitution. Our government was created under the Constitution, and the federal government and Congress specifically were given very specific and limited powers. This was generally respected for the first 150 years of our nation’s history.

Credit card regulation may certainly be beneficial on a state level. If the regulation is needed, constitutionally it is clearly and definitively a decision to be debated and made by the states, not the federal government or Federal Reserve. Currently not only is state power being trampled on, but Congress has turned and continues to turn the responsibility of the states over to a closed-off, powerful, independent agency whose very constitutionality itself is questionable.

In today’s time of calls for more federal regulation, intervention, and control over finance, it is hard to imagine a time when Congress’s role in commerce was so narrowed down to regulating the movement of goods between states. It isn’t too unlikely that the Federal Reserve will gain even more regulatory powers over the financial industry over the next several years. What’s ironic is that it is all being carried out in the name of protecting the consumer.

It is absurd to think that allowing the Federal Reserve to carry more regulatory responsibility will help consumers. They have no constitutional authority to regulate, the operators of the Fed are not elected by the people, and the primary operations of the Fed are off-limits to audits. You cannot tell me that this group can adequately protect consumers and not pander to the banking interests who run the agency.

True regulatory representation of the consumer can only be achieved through the states. If it isn’t the individuals who decide the regulations, it isn’t right to call it consumer protection, is it? It’s a head scratcher to think that the same organization who has destroyed the value of our currency (which hits the lower and middle class hardest) can stand up for consumers with a straight face.

It is largely a lack of understanding and respect for the Constitution that got us into this mess in the first place. Many in government either do not understand, or simply ignore, the restraints placed on Congress’s regulatory power and the 10th Amendment’s clear language bringing issues not given to the federal government back to the states and the people.

If it is consumers who you want to protect, all you have to do is follow, respect, and protect the Constitution. Through their local, state, and own regulatory power, the free individuals of this country can do the rest.

“If the provisions of the constitution be not upheld when they pinch as well as when they comfort, they may as well be abandoned.” — Former Associate Justice of the Supreme Court George Sutherland

David Kretzmann is a remarkably precocious and insightful teenage investor who has been investing in individual stocks since July 2005. His latest commentary on finance, the economy, government and more can be found on his website, http://davidkretzmann.com

This week the House is expected to pass an $825 billion economic stimulus package.  In reality, this bill is just an escalation of a government-created economic mess.   As before, a sense of urgency and impending doom is being used to extract mountains of money from Congress with minimal debate.  So much for change.  This is déjà vu.  We are again being promised that its passage will help employment, help homeowners, help the environment, etc.

These promises are worthless. 

This time around especially, Congress should know better than to pass anything of this magnitude without first reading the fine print.  There a many red flags that I have found in this bill.

At least $4 billion is allocated to expanding the police state and the war on drugs through Byrne grants, which even the Bush administration opposed, and the COPS program, both of which are corrupt and largely ineffective programs.

To help Big Brother keep a better eye on us and our children, $20 billion would go towards health information technology, which would create a national system of electronic medical records without adequate privacy protection.  These records would instead be subject to the misnamed federal “medical privacy” rule, which allows government and state-favored special interests to see medical records at will.  An additional $250 million is allocated for states to nationalize individual student data, expanding Federal control of education and eroding privacy.

$79 billion bails out states that haphazardly expanded their budgets during the bubble years, but refuse to retrench and cut back, as their taxpayers have had to, during recession years.

$200 million expands Americorps.  $100 million goes to “faith-and-community” based organizations for social services, which will further insinuate the government into charity and community service.  Private charities are much more efficient and effective because they are directly accountable to donors, while public programs tend to get rewarded for failure. With its money, the Federal Government brings its incompetence and its whims, while creating foolish dependence.  This is sad to see.

Of course the bill is rife with central planning projects.  $4 billion for job training, much of which will be used to direct workers into “green jobs”.  $200 million to “encourage” electric cars, $2 billion to support US manufacturers of advanced batteries and battery systems, which is yet another function of government I can’t find in the Constitution. Not to mention $500 million for energy efficient manufacturing demonstration projects, $70 million for a Technology Innovation Program for “research in potentially revolutionary technologies” in which government, not supply and demand, will pick winners and losers.  $746 million for afterschool snacks, $6.75 billion for the Department of Commerce, including $1 billion for a census.

This bill delivers an additional debt burden of $6,700 to every American man, woman and child.

There is a lot of stimulus and growth in this bill – that is, of government.  Nothing in this bill stimulates the freedom and prosperity of the American people.  Politician-directed spending is never as successful as market-driven investment.  Instead of passing this bill, Congress should get out of the way by cutting taxes, cutting spending, and reining in the reckless monetary policy of the Federal Reserve.

Ron Paul is a republican member of congress from Texas.

The economic situation continues to deteriorate this week as past and future bailouts were discussed on Capitol Hill.  The debate was over the accountability of already disbursed TARP money, and on whether or not to release remaining funds.   Banks that had already been bailed out before are looking for more money to fill the black holes that are their balance sheets, warning that they are simply too big to fail.

However, whatever ‘devastating’ consequences these banks are dreaming up and pushing on Capitol Hill regarding their own collapse will be nothing compared to the collapse of our currency if we keep debasing it through these foolish bailouts.  It should be that they are too big to bailout.  The world will not come to an end without this or that bank.  The most troubling thing to me is this rhetoric that only government can save the economy, and must act.  This is so counter-productive.

We must ask ourselves what strengthens this country, and what weakens it.

Government is a monumental drag on this economy.  Government at all levels currently absorbs about 35-40 percent of GDP, which is still not enough for its voracious appetite. While productivity is already overtaxed, the government routinely spends more than it takes in and makes up for the shortfall by constantly borrowing or debasing our dollars through inflation.

It pains me to think of all the opportunities for productive economic growth we have given up simply because our government is super-sized instead of Constitution-sized.  There are just a few constitutionally sanctioned activities for government to engage in, but it is so overstretched with unconstitutional encroachments that what it is legitimately supposed to do, it does very badly.  And yet we are to believe the solution to our problems is to make government bigger.

On the contrary, government makes our problems bigger.  The central bank’s meddling with monetary policy led to overheated lending, and now massive defaults.  The government used manipulative tax policy to distort the housing market which has had many unintended consequences, and here we are.  Government is quick to enact and slow to correct bad policy.  Yet in spite of government’s failures, it flourishes and grows, thanks to the continual bailouts from the unwitting taxpayer.

Big government has been tried and has failed miserably.  What we need now is small government, and freedom.  We need the freedom to pull ourselves up by our own bootstraps again, as we traditionally do in this country.  But try to start a business or charity today, and you will understand how little economic freedom we really have left.

Freedom, not government, made this the land of opportunity.  Freedom laid the foundation that catapulted us to becoming the strongest economic power in the world.  The American people are strong and capable.  We can pull ourselves out of this mess.  All we need is for the nanny-state to get out of the way and allow us to do it.

Freedom is our strength, government is our weakness.  Only by recognizing this and unleashing our strengths will we solve the problems we face today.

Ron Paul is a republican member of congress from Texas.

The freedom to fail is an essential part of freedom.  Government- provided financial security necessitates relinquishing the very essence of freedom.  Last week, the big 3 American automakers came back to Capitol Hill with their hands out to the government.  Congress spent this past week debating how much money to give them and what strings should be attached.

Though the bailout plan for the auto industry has suffered what I would call a temporary setback in the Senate, other avenues for public funding are being explored through the Federal Reserve and the Treasury Department.  I am afraid the American auto industry will soon learn that having billions rain down from Washington will not be the blessing one might expect.

The government, after it subsidizes an industry, tends to become a very demanding benefactor.  Politicians may not have any real idea about how to build a car, run a bank, educate a child, heal the sick or build a road, but they are quite adept at using carrots and sticks to manipulate and threaten those who do.  Most of the federal control over education, roads, healthcare, and now banking and soon auto manufacturing, is done through money, mandates and conditions. 

The bailout proposal we were considering would force automobile manufacturers to submit their business plans for the approval of a new federal “car czar.”  This bureaucrat would have the authority to approve the automakers’ restructuring plan, monitor implementation of the plan, and even stop certain transactions he determines are inconsistent with the companies’ long-term viability.

One could argue that if billions of taxpayer dollars are going to flow into a failing industry, then representatives of those taxpayers have “bought” a say in how that industry is run – which is precisely why bailouts are such a bad idea for both the industry and the taxpayers.  The federal government has neither the competence nor the Constitutional authority to tell private companies, such as automakers, how to run their businesses.

I would have thought that failed experiments with central planning and government control of business that caused so much harm in the last century would have taught my colleagues the folly of making businesses obey politicians and bureaucrats instead of heeding the wishes of consumers, employees, and stockholders.  But the auto industry is in danger of learning for themselves one of the oldest lessons in politics: he who pays the fiddler calls the tune.

It is not the job of government to sustain business.  The government should get out of the way, and instead examine excessive regulations, tax policy and red tape that have been hostile to manufacturing in this country.  We should get back on a sustainable economic course in this country, or we are doomed to collapse, as the Soviets did, under the crushing burden of big government and a strangled economy that can no longer pay for it.

Ron Paul is a republican member of congress from Texas.

This week the bailout of the Big Three automakers was under heavy consideration in Congress’s lame duck session.  I have always opposed government bailouts of private organizations.  Back in 1979 Congress had hearings about bailing out Chrysler and I was on record pointing out that these types of policies are foolish and very damaging to the long term economic health of our country.  They still are.

There was also renewed pressure this week to bailout homeowners and send another round of stimulus checks to “Main Street” to balance out all the handouts to big business.  It seems that eventually the entire economy is going to be blanketed over with Federal Reserve notes.  Most in Washington are completely oblivious as to why this model of money creation and spending is so dangerous.

We must remember that governments do not produce anything.  Their only resources come from producers in the economy through such means as inflation and taxation.   The government has an obligation to be good stewards of these resources.  In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones.

By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use.  An essential element of a healthy free market, is that both success and failure must be permitted to happen when they are earned.  But instead with a bailout, the rewards are reversed – the proceeds from successful entities are given to failing ones.

How this is supposed to be good for our economy is beyond me.

With each bailout we hear rhetoric that this is the mother of all bailouts.  This will fix the problem once and for all, and that this is absolutely necessary to avert disaster.  This sense of panic squeezes astonishing amounts of dollars out of reluctant but hopeful legislators, who hate the position they are being put in, but are relieved that it will be the last time.  It is never the last time, and again and again we are faced with the same scenarios and the same fears.

We are already in the bailout business for such a staggering amount that admitting it was wrong in the first place would be too embarrassing.  So the commitment to this course of action is only irrationally escalated, in the hopes that somehow, someway eventually it will work and those in power won’t have to admit they were wrong.

It won’t work.  It can’t work.  We need to cut our losses and get back on course.  There is too much at stake for too many people to continue down this road.  The bailouts thus far to AIG, Bear Stearns, Fannie and Freddie, and TARP funds amount to around $1.5 trillion. Considering our GDP is $14 trillion, and our Federal budget is already $3 trillion, this additional amount will significantly eat into our future lifestyles.  That amounts to an extra $5,000 that every person in the country needs to somehow produce just to keep up.

It is obvious to most Americans that we need to reject corporate cronyism, and allow the natural regulations and incentives of the free market to pick the winners and losers in our economy, not the whims of bureaucrats and politicians.

Ron Paul is a republican member of congress from Texas.