PoliticalAction.com Blog

Statement of Congressman Ron Paul
United States House of Representatives

Statement Introducing the Free Competition in Currency Act

December 9, 2009

Madame Speaker, I rise to introduce the Free Competition in Currency Act of 2009. Currency, or money, is what allows civilization to flourish. In the absence of money, barter is the name of the game; if the farmer needs shoes, he must trade his eggs and milk to the cobbler and hope that the cobbler needs eggs and milk. Money makes the transaction process far easier. Rather than having to search for someone with reciprocal wants, the farmer can exchange his milk and eggs for an agreed-upon medium of exchange with which he can then purchase shoes.

This medium of exchange should satisfy certain properties: it should be durable, that is to say, it does not wear out easily; it should be portable, that is, easily carried; it should be divisible into units usable for every-day transactions; it should be recognizable and uniform, so that one unit of money has the same properties as every other unit; it should be scarce, in the economic sense, so that the extant supply does not satisfy the wants of everyone demanding it; it should be stable, so that the value of its purchasing power does not fluctuate wildly; and it should be reproducible, so that enough units of money can be created to satisfy the needs of exchange.

Over millennia of human history, gold and silver have been the two metals that have most often satisfied these conditions, survived the market process, and gained the trust of billions of people. Gold and silver are difficult to counterfeit, a property which ensures they will always be accepted in commerce. It is precisely for this reason that gold and silver are anathema to governments. A supply of gold and silver that is limited in supply by nature cannot be inflated, and thus serves as a check on the growth of government. Without the ability to inflate the currency, governments find themselves constrained in their actions, unable to carry on wars of aggression or to appease their overtaxed citizens with bread and circuses.

At this country’s founding, there was no government controlled national currency. While the Constitution established the Congressional power of minting coins, it was not until 1792 that the US Mint was formally established. In the meantime, Americans made do with foreign silver and gold coins. Even after the Mint’s operations got underway, foreign coins continued to circulate within the United States, and did so for several decades.

On the desk in my office I have a sign that says: “Don’t steal – the government hates competition.” Indeed, any power a government arrogates to itself, it is loathe to give back to the people. Just as we have gone from a constitutionally-instituted national defense consisting of a limited army and navy bolstered by militias and letters of marque and reprisal, we have moved from a system of competing currencies to a government-instituted banking cartel that monopolizes the issuance of currency. In order to reintroduce a system of competing currencies, there are three steps that must be taken to produce a legal climate favorable to competition.

The first step consists of eliminating legal tender laws. Article I Section 10 of the Constitution forbids the States from making anything but gold and silver a legal tender in payment of debts. States are not required to enact legal tender laws, but should they choose to, the only acceptable legal tender is gold and silver, the two precious metals that individuals throughout history and across cultures have used as currency. However, there is nothing in the Constitution that grants the Congress the power to enact legal tender laws. We, the Congress, have the power to coin money, regulate the value thereof, and of foreign coin, but not to declare a legal tender. Yet, there is a section of US Code, 31 USC 5103, that purports to establish US coins and currency, including Federal Reserve notes, as legal tender.

Historically, legal tender laws have been used by governments to force their citizens to accept debased and devalued currency. Gresham’s Law describes this phenomenon, which can be summed up in one phrase: bad money drives out good money. An emperor, a king, or a dictator might mint coins with half an ounce of gold and force merchants, under pain of death, to accept them as though they contained one ounce of gold. Each ounce of the king’s gold could now be minted into two coins instead of one, so the king now had twice as much “money” to spend on building castles and raising armies. As these legally overvalued coins circulated, the coins containing the full ounce of gold would be pulled out of circulation and hoarded. We saw this same phenomenon happen in the mid-1960s when the US government began to mint subsidiary coinage out of copper and nickel rather than silver. The copper and nickel coins were legally overvalued, the silver coins undervalued in relation, and silver coins vanished from circulation.

These actions also give rise to the most pernicious effects of inflation. Most of the merchants and peasants who received this devalued currency felt the full effects of inflation, the rise in prices and the lowered standard of living, before they received any of the new currency. By the time they received the new currency, prices had long since doubled, and the new currency they received would give them no benefit.

In the absence of legal tender laws, Gresham’s Law no longer holds. If people are free to reject debased currency, and instead demand sound money, sound money will gradually return to use in society. Merchants would have been free to reject the king’s coin and accept only coins containing full metal weight.

The second step to reestablishing competing currencies is to eliminate laws that prohibit the operation of private mints. One private enterprise which attempted to popularize the use of precious metal coins was Liberty Services, the creators of the Liberty Dollar. Evidently the government felt threatened, as Liberty Dollars had all their precious metal coins seized by the FBI and Secret Service in November of 2007. Of course, not all of these coins were owned by Liberty Services, as many were held in trust as backing for silver and gold certificates which Liberty Services issued. None of this matters, of course, to the government, which hates competition. The responsibility to protect contracts is of no interest to the government.

The sections of US Code which Liberty Services is accused of violating are erroneously considered to be anti-counterfeiting statutes, when in fact their purpose was to shut down private mints that had been operating in California. California was awash in gold in the aftermath of the 1849 gold rush, yet had no US Mint to mint coinage. There was not enough foreign coinage circulating in California either, so private mints stepped into the breech to provide their own coins. As was to become the case in other industries during the Progressive era, the private mints were eventually accused of circulating debased (substandard) coinage, and with the supposed aim of providing government-sanctioned regulation and a government guarantee of purity, the 1864 Coinage Act was passed, which banned private mints from producing their own coins for circulation as currency.

The final step to ensuring competing currencies is to eliminate capital gains and sales taxes on gold and silver coins. Under current federal law, coins are considered collectibles, and are liable for capital gains taxes. Short-term capital gains rates are at income tax levels, up to 35 percent, while long-term capital gains taxes are assessed at the collectibles rate of 28 percent. Furthermore, these taxes actually tax monetary debasement. As the dollar weakens, the nominal dollar value of gold increases. The purchasing power of gold may remain relatively constant, but as the nominal dollar value increases, the federal government considers this an increase in wealth, and taxes accordingly. Thus, the more the dollar is debased, the more capital gains taxes must be paid on holdings of gold and other precious metals.

Just as pernicious are the sales and use taxes which are assessed on gold and silver at the state level in many states. Imagine having to pay sales tax at the bank every time you change a $10 bill for a roll of quarters to do laundry. Inflation is a pernicious tax on the value of money, but even the official numbers, which are massaged downwards, are only on the order of 4% per year. Sales taxes in many states can take away 8% or more on every single transaction in which consumers wish to convert their Federal Reserve Notes into gold or silver.

In conclusion, Madame Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government’s ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies and cosponsor the Free Competition in Currency Act.

Far from fading away like the establishment expected, Congressman Paul’s message of freedom, peace, and prosperity continues to garner unprecedented coverage.

After a tremendous string of media hits to start December, Ron Paul’s biggest television appearance yet will come this Tuesday, December 15, as he co-hosts CNBC’s Squawk Box from 8-9am eastern!

It is incredible for a member of Congress not in his party’s leadership to be receiving the amount of attention Ron Paul has seen in recent months. Our movement is truly making great progress.

Thank you for continuing to follow Dr. Paul’s media appearances. You can be sure the producers take notice of the increased viewerships their shows receive when they interview Congressman Paul.

Tune in to CNBC’s Squawk Box this Tuesday from 8-9am eastern and support Ron Paul’s message of economic freedom!

Statement of Congressman Ron Paul
United States House of Representatives

Statement Before Foreign Affairs Committee

December 10, 2009

Mr. Speaker thank you for holding these important hearings on US policy in Afghanistan. I would like to welcome the witnesses, Ambassador Karl W. Eikenberry and General Stanley A. McChrystal, and thank them for appearing before this Committee.
I have serious concerns, however, about the president’s decision to add some 30,000 troops and an as yet undisclosed number of civilian personnel to escalate our Afghan operation. This “surge” will bring US troop levels to approximately those of the Soviets when they occupied Afghanistan with disastrous result back in the 1980s. I fear the US military occupation of Afghanistan may end up similarly unsuccessful.
In late 1986 Soviet armed forces commander, Marshal Sergei Akhromeev, told then-Soviet General Secretary Mikhail Gorbachev, “Military actions in Afghanistan will soon be seven years old. There is no single piece of land in this country which has not been occupied by a Soviet soldier. Nonetheless, the majority of the territory remains in the hands of rebels.” Soon Gorbachev began the Soviet withdrawal from its Afghan misadventure. Thousands were dead on both sides, yet the occupation failed to produce a stable national Afghan government.
Eight years into our own war in Afghanistan the Soviet commander’s words ring eerily familiar. Part of the problem stems from a fundamental misunderstanding of the situation. It is our presence as occupiers that feeds the insurgency. As would be the case if we were invaded and occupied, diverse groups have put aside their disagreements to unify against foreign occupation. Adding more US troops will only assist those who recruit fighters to attack our soldiers and who use the US occupation to convince villages to side with the Taliban.
Proponents of the president’s Afghanistan escalation cite the successful “surge” in Iraq as evidence that this second surge will have similar results. I fear they might be correct about the similar result, but I dispute the success propaganda about Iraq. In fact, the violence in Iraq only temporarily subsided with the completion of the ethnic cleansing of Shi’ites from Sunni neighborhoods and vice versa – and all neighborhoods of Christians. Those Sunni fighters who remained were easily turned against the foreign al-Qaeda presence when offered US money and weapons. We are increasingly seeing this “success” breaking down: sectarian violence is flaring up and this time the various groups are better armed with US-provided weapons. Similarly, the insurgents paid by the US to stop their attacks are increasingly restive now that the Iraqi government is no longer paying bribes on a regular basis. So I am skeptical about reports on the success of the Iraqi surge.
Likewise, we are told that we have to “win” in Afghanistan so that al-Qaeda cannot use Afghan territory to plan further attacks against the US. We need to remember that the attack on the United States on September 11, 2001 was, according to the 9/11 Commission Report, largely planned in the United States (and Germany) by terrorists who were in our country legally. According to the logic of those who endorse military action against Afghanistan because al-Qaeda was physically present, one could argue in favor of US airstrikes against several US states and Germany! It makes no sense. The Taliban allowed al-Qaeda to remain in Afghanistan because both had been engaged, with US assistance, in the insurgency against the Soviet occupation.
Nevertheless, the president’s National Security Advisor, Gen. James Jones, USMC (Ret.), said in a recent interview that less than 100 al-Qaeda remain in Afghanistan and that the chance they would reconstitute a significant presence there was slim. Are we to believe that 30,000 more troops are needed to defeat 100 al-Qaeda fighters? I fear that there will be increasing pressure for the US to invade Pakistan, to where many Taliban and al-Qaeda have escaped. Already CIA drone attacks on Pakistan have destabilized that country and have killed scores of innocents, producing strong anti-American feelings and calls for revenge. I do not see how that contributes to our national security.
The president’s top advisor for Afghanistan and Pakistan, Richard Holbrooke, said recently, “I would say this about defining success in Afghanistan and Pakistan. In the simplest sense, the Supreme Court test for another issue, we’ll know it when we see it.” That does not inspire much confidence.
Supporters of this surge argue that we must train an Afghan national army to take over and strengthen the rule and authority of Kabul. But experts have noted that the ranks of the Afghan national army are increasingly being filled by the Tajik minority at the expense of the Pashtun plurality. US diplomat Matthew Hoh, who resigned as Senior Civilian Representative for the U.S. Government in Zabul Province, noted in his resignation letter that he “fail[s] to see the value or the worth in continued U.S. casualties or expenditures of resources in support of the Afghan government in what is, truly, a 35-year old civil war.” Mr. Hoh went on to write that “[L]ike the Soviets, we continue to secure and bolster a failing state, while encouraging an ideology and system of government unknown and unwanted by [the Afghan] people.”
I have always opposed nation-building as unconstitutional and ineffective. Afghanistan is no different. Without a real strategy in Afghanistan, without a vision of what victory will look like, we are left with the empty rhetoric of the last administration that “when the Afghan people stand up, the US will stand down.” I am afraid the only solution to the Afghanistan quagmire is a rapid and complete US withdrawal from that country and the region. We cannot afford to maintain this empire and our occupation of these foreign lands is not making us any safer. It is time to leave Afghanistan.

here’s Ron and Glenn Beck laying out a lot of heavy stuff….

United States Senator Arlen Specter, For the Commonwealth of Pennsylvania

Dear Friends:

I want to share with you an op-ed (link here and copied below) I wrote that ran in today’s Philadelphia Daily News about why I oppose sending additional American troops to Afghanistan.

If you are interested in learning more about how I came to this decision, I encourage you read the floor statement I made in September in which I raised substantive questions about our mission in Afghanistan. At that time, I also wrote detailed letters to – and subsequently received responses and briefings from – Secretary of State Hillary Clinton, Secretary of Defense Robert Gates, CIA Director Leon Panetta, DNI Director Dennis Blair and Admiral Mike Mullen.

As always, please don’t hesitate to contact me on this and any other issues of importance to you.

Sincerely,

Arlen Specter

Why I oppose the Afghan surge
By ARLEN SPECTER

I’M OPPOSED to sending 30,000 more American troops to Afghanistan because I don’t believe they are indispensable in our fight against al Qaeda.
If they were, I’d support such a surge because we have to do whatever it takes to defeat al Qaeda, which seeks to annihilate us.

But if al Qaeda can organize and operate out of Yemen, Somalia or elsewhere, then why fight in Afghanistan, which has made a history of resisting would-be conquerors – from Alexander the Great in the 3rd century BC, to Great Britain in the 19th and early 20th centuries, to the former Soviet Union in the 1970s and 1980s?

In order to be successful in Afghanistan, it’s necessary to have a reliable ally in the Afghan government. The evidence demonstrates that President Hamid Karzai does not have the requisite reliability.

THE LEGITIMACY of his administration is suspect because of vote fraud. There is widespread corruption at the highest levels of his government. His government has tolerated, if not encouraged, drug-trafficking.

President Obama has said, “President Karzai’s inauguration speech sent the right message about moving in a new direction.” In my judgment, any such “message” amounts to a dubious and belated pledge of reform and deserves to be treated with the greatest skepticism.

For too long, the United States has borne the overwhelming weight of providing troops with only modest NATO contributions. We currently provide 68,000 troops, Britain 9,500 and the other countries just over 36,000. NATO has pledged another 7,000 troops, an inadequate response when you consider the combined populations of NATO countries – excluding the United States – and the threat they face from al Qaeda.

In the context of the Vietnam and Iraq wars, it is understandable that the American people are very skeptical about fighting in Afghanistan. Had we known that Saddam Hussein did not have weapons of mass destruction, we would not have gone into Iraq.

Historians have replayed the tragic mistakes in Vietnam. When you add the 851 killed and 4,605 wounded in Afghanistan to the 4,369 killed and 31,575 wounded in Iraq, it is understandable that the American people do not want to continue the overwhelming burden of fighting in Afghanistan with so little assistance from our allies and so little prospects for success.

The cost of the Afghanistan war imposes an additional burden. It costs $1 million a year for each soldier, or $30 billion a year to support 30,000 additional troops. The cost for the total force in Afghanistan of approximately 100,000 soldiers would be more than $100 billion a year.

Pursuing a successful war in Afghanistan would require considerable additional support from Pakistan.

While Pakistan has been more helpful in recent weeks, their long-term commitment remains uncertain. For years, I’ve urged that the United States should take the lead in brokering a rapprochement with India that would allow Pakistan to redeploy forces from the Indian border to Taliban and al Qaeda strongholds in the mountainous regions of the north. If we could cool that tension with India, they could help us fight the Taliban and al Qaeda.

My opposition to the troop surge in no way diminishes my concern over the challenge we face in al Qaeda and the need to confront it wherever it emerges.

But I question whether Afghanistan is the primary front or even the only battlefield when we may face emerging challenges in Yemen, Somalia and Pakistan itself. That is where we have the best chance to succeed.

We should concentrate on fighting al Qaeda without limitation on time or resources, but we should not engage in the laborious and problematic task of nation-building, or civil affairs, or the protection of other societies in place of their own security systems.

This noble man is spot on again…..

High-stakes duel between Rep. Paul and chairman Bernanke intensifies

By Silla Brush | The Hill
12/08/09

Rep. Ron Paul and Ben Bernanke are locked in a clash of titans.

Paul, the 74-year-old House libertarian from Texas with the high-pitched voice, has fought for decades to kill off the Federal Reserve.

Bernanke, the mild-mannered ex-Princeton professor and chairman of the bank, is waging a high-stakes battle for the Fed’s reputation. And he’s doing everything possible to knock out Paul.

The fight is still in the early rounds. But with the full House expected to vote this week to give government auditors more power to scrutinize the Fed, Paul has the upper hand.

The Senate is a much more difficult round for Paul, though a similar stew of liberal and conservative support is starting to simmer in the upper chamber behind the Republican’s wonky auditing measure.

Bernanke and Paul have never met one-on-one behind closed doors, Paul’s office said. The battle has taken place in public — on blogs, with grassroots activists and during congressional hearings.

Bernanke has testified against the provision, given lengthy media interviews, written op-eds and attempted to lift the cloud of secrecy that hangs over the bank.

The Fed is audited, he argues, but allowing government scrutiny of interest rate decisions will politicize the Fed. Opening the door to congressionally requested audits would compromise the market’s confidence in the bank.

Paul, a longstanding supporter of a new gold standard, made his case formally in his recently published book, End the Fed.

The 2008 presidential candidate’s crusade is no longer a quixotic quest. He is a prime beneficiary of the grassroots anger this year against government bailouts for Wall Street.

First introduced in February, Paul’s bill to audit the Fed has gained 317 co-sponsors, a shocking three-quarters of the House. The bill has not won over many Democrats in leadership, but it has picked up several committee chairmen, including Reps. Bart Gordon (Tenn.), Jim Oberstar (Minn.) and John Spratt (S.C.).

Rep. Alan Grayson (D-Fla.), a prominent Paul ally on the bill, has provided a huge boost to the effort with his firebrand strain of liberal politics.
Grayson has publicly slammed the Fed, going so far as calling its top lobbyist a “K Street whore” before apologizing. Paul himself said the full force of “lobbyists for the Fed” is stacked against him.

As the popularity of the Paul-Grayson measure rose this year, Bernanke’s fell.

Praised by many economists for taking the necessary steps to right the economy over the last year, his overall public approval has soured. A Rasmussen poll in November showed that just 21 percent of those surveyed thought Bernanke should be reappointed. Meanwhile, 79 percent of those polled said auditing the Fed is a good idea.

Republicans have jumped behind Paul, who stood out in last year’s GOP presidential primary for his outspokenness against the Iraq war.

“There needs to be Fed independence and accountability for those dollars to at least look back at those decisions,” said Rep. Kevin Brady (R-Texas).

But the political value is plain as Republicans argue the government is taking too large a role in the economy.

“The Fed becomes for Republicans a very convenient, always controversial, always misunderstood, very specific whipping boy that they can ride to potential victory in 2010 and 2012,” said a Washington-based financial lobbyist.

Bernanke has the normally powerful Rep. Barney Frank (D-Mass.) in his corner. But as chairman of the House Financial Services Committee, Frank couldn’t eke out a compromise.

Frank rarely loses battles, but an attempt — with Rep. Mel Watt (D-N.C.) — at a deal on the audit issue simply fell short at the committee level. Liberal activist Robert Borosage, who is campaigning against Bernanke’s nomination for a second term, said the compromise effort was nothing more than “the establishment alternative.”

The committee voted 43-26 in favor of Paul’s amendment as 15 Democrats on the panel bucked Frank.

The vote drew a bright line between the senior Democrats atop the committee and the freshman and sophomore members.

“I think some of the newer members are in the most vulnerable districts,” said Rep. Brad Miller (D-N.C.), a Paul-Grayson co-sponsor who instead joined Frank in voting against the Paul amendment. “They were certainly getting the calls that I was getting, and they were reading the politics differently.”

Frank and Paul are both veterans of the House, and while they are on nearly opposite ends of the political spectrum, they have a mutual respect. The two have worked closely on an Internet gaming measure.

Many Democrats and Republicans on Capitol Hill say that Frank, despite his partisan rhetoric, is a pragmatist.

“I never felt [Frank] was against me,” Paul said.

Frank said last week the language wouldn’t be changed when the House heads for the vote. Ten of the 13 House members on the Rules Committee are among Paul’s backers, including Chairwoman Louise Slaughter (D-N.Y.).

“Absent some change in the way the public is reacting, I don’t see any changes,” Frank said. “I think there is this tension within the Republican Party. A lot of their people who traditionally have a lot of influence are troubled by this, but they may be cowed by the anger at the Fed.”

In the Senate, Paul has found support from Sens. Jim DeMint, the conservative Republican from South Carolina, and Bernie Sanders, the Independent from Vermont who calls himself a proud socialist.

A left-right coalition of interest groups on the outside is joining forces against Bernanke.

Bob Cusack contributed to this article.

Texas Straight Talk – A weekly column
Rep. Ron Paul (R) – TX 14

Who Wants War?

If anyone still doubted that this administration’s foreign policy would bring any kind of change, this week’s debate on Afghanistan should remove all doubt. The President’s stated justifications for sending more troops to Afghanistan and escalating war amount to little more than recycling all the false reasons we began the conflict. It is so discouraging to see this coming from our new leadership, when the people were hoping for peace. New polls show that 49 percent of the people favor minding our own business on the world stage, up from 30 percent in 2002. Perpetual war is not solving anything. Indeed continually seeking out monsters to destroy abroad only threatens our security here at home as international resentment against us builds. The people understand this and are becoming increasingly frustrated at not being heard by the decision-makers. The leaders say some things the people want to hear, but change never comes.

One has to ask, if the people who elected these leaders so obviously do not want these wars, who does? Eisenhower warned of the increasing power and influence of the military industrial complex and it seems his worst fears have come true. He believed in a strong national defense, as do I, but warned that the building up of permanent military and weapons industries could prove dangerous if their influence got out of hand. After all, if you make your money on war, peace does you no good. With trillions of dollars at stake, there is tremendous incentive to keep the decision makers fearful of every threat in the world, real or imagined, present or future, no matter how ridiculous and far-fetched. The Bush Doctrine demonstrates how very successful the war lobby was philosophically with the last administration. And they are succeeding just as well with this one, in spite of having the so-called “peace candidate” in office.

We now find ourselves in another foreign policy quagmire with little hope of victory, and not even a definition of victory. Eisenhower said that only an alert and informed electorate could keep these war racketeering pressures at bay. He was right, and the key is for the people to ensure that their elected leaders follow the Constitution. The Constitution requires a declaration of war by Congress in order to legitimately go to war. Bypassing this critical step makes it far too easy to waste resources on nebulous and never-ending conflicts. Without clear goals, the conflicts last forever and drain the country of blood and treasure. The drafters of the Constitution gave Congress the power to declare war precisely because they feared allowing the executive unfettered discretion in military affairs. They understood that making it easy for leaders to wage foreign wars would threaten domestic liberties.

Responses to attacks on our soil should be swift and brief. Wars we fight should always be defensive, clearly defined and Constitutional. The Bush Doctrine of targeting potential enemies before they do anything to us is dangerously vague and easily abused. There is nothing left to win in Afghanistan and everything to lose. Today’s military actions are yet another futile exercise in nation building and have nothing to do with our nation’s security, or with 9/11. Most experts agree that Bin Laden and anyone remotely connected to 9/11 left Afghanistan long ago, but our troops remain. The pressures of the war racketeers need to be put in check before we are brought to our knees by them. Unfortunately, it will require a mighty effort by the people to get the leadership to finally listen.

Congressman Ron Paul
Foundation for Rational Economics and Education

Dear Friend of Liberty:

The Founders’ inspired vision of limited government has been kept alive by the hard work and generosity of Americans who truly cherish individual Liberty average people like you and me.

In the toughest times times like we are facing right now in the life of our nation freedom fighters have always stepped forward for America—armed with whatever it takes and at whatever sacrifice—to answer the call to defend our liberty. That’s how America was born and how we, as a free and sovereign nation, have survived.

I have not known a time when the threats to our Liberty and the Founders’ vision have been greater than they are today. For Liberty to survive, it is imperative that we confront these new threats, in all of their ugly forms, both foreign and domestic.

We continue to see a major economic crisis unfolding in our nation. New government programs are started daily, and future plans are being made for even more costly government expansion. 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, bailout 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. Their manipulation of credit, the money supply, and interest rates 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 and US Treasury have perniciously doled out trillions in subsidized loans to troubled banks and other financial institutions, and that number is growing through a revolving TARP slush fund which the Feds are using to bail out their huge corporate buddies. 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 trillions in bailout money have gone. All Members of Congress 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 couple of years has been characterized by no oversight, no limits, no concerns, no understanding, and no common sense.

Similar mistakes were made in the 1930s which 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 even the means of production.

The Feds not only own and control car companies and financial institutions, their lust for power and control now extends to their malevolent scheme to nationalize our healthcare system and thereby take over one sixth of our entire economy. This will be a disaster if it happens!

I could go on but I know that you understand the crisis that we face and agree with me on what must be done to turn our nation around.

I hear from Americans like you who are up in arms about what is going on in our nation. Messages come into my congressional office morning, noon and night. Taxpayers are outraged by the huge bailouts, the massive expansion of government and the refusal by Congress and the leaders of both parties to follow the Constitution.

Many Americans are frustrated—many are outright angry—about failed government policies that just tighten the government’s noose around our necks. Many millions of fed up taxpayers have taken to the streets and town hall meetings in recent months to make sure their voices were heard by the uncaring Washington elites.

Since the financial crisis has become more and more apparent, and the attempts by the Fed and Treasury and Congress to solve the problem have become more desperate, my phone has been ringing off the wall with calls from media outlets wanting interviews and to get my opinions about what is going on and how we need to deal with it.

Several books that I have authored with the help of FREE have become instant best sellers as patriotic Americans search desperately for the intellectual and political ammunition they need to fight for the future of our country and to take back our freedom from the fascists who despise our Constitution and those of us who defend it.

During the presidential election, do you remember how the media scoffed at my suggestions that we were facing economic disaster? They laughed at my calls for limited government, for abolishing the Fed and the IRS, for cutting federal spending at home and abroad to balance our budget, and my call for a sound monetary system. Today, we are well into this economic crisis and they are not laughing any more.

The time is ripe for us to be at the forefront of offering workable solutions of calling for a return to limited, constitutional government, the need for honest money and low taxes, and the absolute need to expose and abolish the Federal Reserve which has done so much to undermine our currency and destroy one of the most productive economic systems in the history of the world.

My bill to audit the Fed has made tremendous progress. Together we have led the fight to get congressional hearings, 308 cosponsors, and unprecedented attention around the country for this legislation. Yet the banksters and a few of their weasel allies in Congress continue to do everything they can to water down or outright kill our movement to audit this monstrous institution.

I’m outraged at every such attempt to stop our bill in order to enable the secrecy and disruptive power of the Fed to continue. Some days I am so angered by the banksters’ underhanded shenanigans that I’m reminded of the famous battle cry of central bank foe Andrew Jackson as he moved to abolish the central bank: “By eternal God I will rout you out!” Jackson shouted as he demonstrated the courage to go against Congress and the Fed.

The task before us is huge. Our challenge is both political and philosophical, but either way, the solution must begin by properly educating Americans as to why our current out-of-control, misguided political and financial systems have failed, and what must be done to turn things around.

My Foundation for Rational Economics and Education (FREE) has been waging such an educational effort for several decades. We have had a great deal of success publishing newsletters and books and producing radio and TV programs teaching people about the Constitution and free markets and sound money.

FREE has done much to educate patriots like you and to win the battle for the hearts and minds of Americans young and old.

FREE is publishing books like my popular Foreign Policy of Freedom, and we have printed and distributed tens of thousands of Pocket Constitutions to students and groups nationwide.

Today, given the severity of the crisis we face, we must do even more in our battle to spread the truth It is imperative that we redouble and expand the work and scope of FREE’s educational effort. Right now, while people are still looking for answers and even the media is trying to figure out what in the world is going on, we must step in to fill the void that exists and to provide answers and solutions for the problems that we face.

You have been a faithful supporter of the cause of liberty. You understand the serious nature of the threats that confront us and the dangers posed to our freedom and our very way of life.

Our ability to lead this movement comes from your tax-deductible contribution to FREE. $50 or $100, or even $250 or more if you can afford it, is urgently needed to help fund the effort to turn our government and our nation around before it is too late. Please go to the FREE donation page now to contribute: http://www.free-nefl.com/html/contribute.html

Leadership is sorely lacking in Washington following the Democrats’ recent victory. It is time for true leaders like us to step forward and offer the vision needed to point Congress and our nation in the right direction and to halt the assault on our nation’s sovereignty.

This is a dangerous time. But it is also an historic opportunity. Please help today with your most generous, tax-deductible gift for freedom. We must act swiftly to counter the ongoing-attempt to socialize our nation and trample upon our freedom. The time is NOW and the need is urgent!!!

I’m counting on you.

In Liberty,
Ron Paul