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

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.

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

We are ONE MONTH AWAY FROM DISASTER!!
Right now, we must SEIZE THE MOMENT!
December’s Climate Treaty is nearly here, and even though those who respect and honor the free enterprise system in the United States have made tremendous strides and even some victories, even still . . .

THE STAGE IS SET IN COPENHAGEN FOR THE . . . . .
WORLD CLIMATE ORDER!!
This is where I need your help IMMEDIATELY!

YOU CAN HALT THE OBAMA “GREEN EXPRESS” IN COPENHAGEN!
FAX Obama And All 100 Senators – STOP Obama’s CLIMATE TREATY! https://secure.conservativedonations.com/cdfe_greentreaty/?a=3253

Through your fax blasts and your giving, the Center for the Defense of Free Enterprise (CDFE) can greatly assist the disruption of such a disastrous decision! If Obama, Al Gore, and their cronies have their way, we will be ratifying this “greenhouse debacle” within days.

STOP THE COPENHAGEN GREEN WORLD ORDER!

We have prepared special faxes (see below) to be sent to President Obama and every Member of Congress. Let’s put the brakes on this very bad blow to our American free enterprise system. Will you assist the CDFE today?

All the G20 nations know perfectly well that “adaptation” to global warming would destroy their economies! It is my hope that someone, anyone who is a key insider adviser to President Obama, will let him know!

The last United Nations negotiating session before next month’s Copenhagen summit on climate change has ended in Spain, yet there is no agreement yet. There is still a change for good to win over evil.

Unfortunately, most Americans are uninformed about this climate change issue. You see, that is one of the main reasons why we exist—to use research and education to PROPERLY INFORM Americans on these free enterprise matters. Unfortunately, this treaty is a matter of life and death to us as a sovereign nation. In 1776 the United States was formed as a completely sovereign nation.

We must do everything within our power
to keep that sovereignty!!
This takeover of our sovereignty amounts to real TREASON!!

The Copenhagen Climate Treaty has two basic objectives:
* Prescribe energy use and consumption to the “haves”!!
* Shift wealth from the “haves” to the “have nots”!!
The accomplishment of these two objectives amounts to outright socialism at best – and global totalitarianism at worst. Both are NOT a win-win!!

Obama stands ready to sign the treaty!

That’s why our Senators must hear from us right away!

YOU CAN HALT THE OBAMA “GREEN EXPRESS” IN COPENHAGEN!
FAX Obama And All 100 Senators – STOP Obama’s CLIMATE TREATY! https://secure.conservativedonations.com/cdfe_greentreaty/?a=3253

Copenhagen can lead to a significant political agreement, but if it happens it will be a major disaster for the developed world, with the United States the biggest loser, since it would bankrupt the nation to bribe poor countries into surrendering their own development.

Insiders at the negotiating session in Spain said the missing ingredient – even more than the absence of agreement on targets, money and technology – was trust.

But treaty organizers are determined to have it pass. And with the help of our U. S. Senators and President Obama, it will! Swedish Finance Minister Anders Borg said at the close of the Spain session, “There will be a deal in Copenhagen, that’s quite clear. We won’t solve the problem in Copenhagen, but there will be progress.”

It is up to you and I to STOP THAT PROGRESS!

Part of the Copenhagen Climate Treaty unbelievably reads: “Industrialized countries have a dual obligation under the Treaty, representing their overall responsibility for keeping the world within limits of the global carbon budget and ensuring that adaption to the impacts of climate change is possible for the most vulnerable.

THIS DUAL BINDING OBLIGATION TAKES THE FORM OF EMISSIONS REDUCTIONS AS WELL AS THE PROVISION OF SUPPORT TO DEVELOPING COUNTRIES.”

Yes, that means we are giving away a part of our great country’s sovereignty!

If all elements of the Treaty (which hardly anyone knows a lot about!!) were to be voted in place, this December, it would establish a GLOBAL GOVERNMENT for the first time in history!!

This tyranny must come to a screeching HALT!

It is time for YOU to choose: tyranny or freedom?

YOU CAN HALT THE OBAMA “GREEN EXPRESS” IN COPENHAGEN!
FAX Obama And All 100 Senators – STOP Obama’s CLIMATE TREATY! https://secure.conservativedonations.com/cdfe_greentreaty/?a=3253

Here is precisely how this Copenhagen Climate Treaty will adversely affect you:
* Double digit inflation as a result of all goods and materials becoming much more expensive
* Raise the deficit through increased borrowing by our Treasury
* Transfer economic growth and profits from the United States to lesser-prepared countries
* Delay the recovery of the United States, which will affect EVERY SEGMENT of our society
* Increased U. S. manufacturing job loss through new cap and trade laws
* Be even more in debt to communist China
* Increase your state and federal taxes
* Regulation of personal spending on energy by law and high prices
* Move away from the U.S. Dollar to a One-World currency
* Increased costs per gallon of gas
THE LIST GOES ON AND ON!

And yet, too few Americans have ever researched this subject at all! Or, they’ve seen Al Gore interviewed on some television program; and believe all the “doom and gloom” that he professes.

You thought that Obama’s “Healthcare Reform” was the most important issue. Lord knows, we’ve lived through all the debates these past few months—and months to come! YET&..

If we do not stand firm against Obama and the U. S. Senate ratifying this Copenhagen Treaty, YOU may be enslaved to a new Green World Order!

This will not wait until someone else is president. This will not even wait until the elections of 2010. We are facing devastation next month!

YOU CAN HALT THE OBAMA “GREEN EXPRESS” IN COPENHAGEN!
FAX Obama And All 100 Senators – STOP Obama’s CLIMATE TREATY! https://secure.conservativedonations.com/cdfe_greentreaty/?a=3253

Let your voice, fax and check book be heard!

NO MORE SOVEREIGNTY SUICIDE!!
Even though President Obama pledged his allegiance to uphold the Constitution at his inauguration, his actions have not meshed with what can happen, literally, next month!

The U. S. Constitution dictates that treaty ratification must have approval votes by a TWO-THIRDS majority in the U. S. Senate.

Please join us in this SOVEREIGNTY SUICIDE STRUGGLE!

Act now! Don’t delay.

We will be looking for your urgent fax to the President and every U. S. Senator.

The nation you save will be your own.

Sincerely,

Ron Arnold
Center for the Defense of Free Enterprise
www.cdfe.org

P. S. I cannot underscore how important this issue really is. Do not let our President or our Senators SELL US OUT under the mis-guidance of helping other under-developed countries. Sure, we have compassion for others less fortunate, but NOT at the expense of losing our sovereignty.

YOU CAN HALT THE OBAMA “GREEN EXPRESS” IN COPENHAGEN!
FAX Obama And All 100 Senators – STOP Obama’s CLIMATE TREATY! https://secure.conservativedonations.com/cdfe_greentreaty/?a=3253

Or SEND your donation to:

Center for the Defense of Free Enterprise
Dept Code – 3253
12500 NE 10th Place
Bellevue, WA 98005

The Center for the Defense of Free Enterprise is a non-partisan education and research organization which works on free enterprise studies, public policy research, book publishing, conferences, white papers, and media outreach. We are a tax-exempt educational organization under Section 501(c)(3) of the United States Tax Code. The Center was founded in 1976 and has been exempt since 1977. The Center does not seek or accept government funds. Contributions to the Center are tax deductible.

U.S. ECONOMIC STATE OF EMERGENCY

NATIONAL DEBT HITS 12 TRILLION DOLLARS FOR THE FIRST TIME IN HISTORY

Dear Fellow Patriot,
We’ve all heard about the Federal debt being an immoral burden for our children and grandchildren. But the day of reckoning with our national debt is now here impacting us!

Forget the grandkids, our economy is at grave risk of collapse right now!

Federal deficits are projected to top $1 trillion every year for the next decade. We’ve doubled our debt to foreign countries in just the last four years. Our debt to China rose by almost 40% last year alone!

In 2008, the interest on the national debt was $451 billion. Think of this. We could send 123,000 kids to college, or double the U.S. Border Patrol, or immunize every two-year old in America, with just one-day’s interest on the national debt!

TELL CONGRESS YOU DEMAND A BALANCED BUDGET AMENDMENT
Sign the Petition to Help America Get Deficit Free
http://deficitfree.com/petitions/petition-for-a-balanced-budget-amendment/

We now face economic collapse. The dollar is in near free-fall. Foreign countries are balking at lending the U.S. more money, instead turning to gold for their currency reserves. And that $9 trillion in new debt borrowing that’s planned for the next decade, it won’t happen. There’s just not $9 trillion to borrow anywhere in the world.

Congress will vote in December to extend America’s indebtedness above $12,100,000,000,000, necessitated because our national debt grew last year by more than $1,400,000,000,000 and will grow this year by $1,400,000,000,000.According to the Obama White House estimates, the national debt will continue to grow by more than $1 trillion for the next nine years. Except it won’t – because it can’t. Remember there just isn-t $9 trillion to borrow.

The dollar is in free-fall. The Ponzi scheme Congress calls Social Security is about to collapse. Foreigners are beginning to balk at loaning the US government more money. That grave economic turmoil our debt and deficit will cause in the future, it’s now here.

TELL CONGRESS YOU DEMAND A BALANCED BUDGET AMENDMENT
Sign the Petition to Help America Get Deficit Free
http://deficitfree.com/petitions/petition-for-a-balanced-budget-amendment/

Lets put the 12 trillion dollar US DEBT into perspective:

What is 12 trillion dollars in terms of time and space?
* If you spent $1 per minute it would take 22,816,000 years to spend 12 trillion. Which would mean you would need to have started spending at the beginning of the Neogene Period or 20 million years before the Ice Age.
* If you had 12 trillion frequent flyer miles, you could travel first-class, round-trip to the SUN and back 67,500 times.

Beyond threatening our economic security, our national debt is imperiling our national independence. We now owe foreign entities $3.448 Trillion – 28.2% more than just 12 months ago!

Three of the five largest holders of US debt should cause you sleepless nights.
* We owe China the most, $797 billion — 38.9% more than we did just 12 months ago.
* We owe Oil Exporting Countries $189.2 billion – 11.5% more than just 12 months ago.
* We owe Caribbean Banking Centers (thought to hold billions in narco-terrorist money) $180.2 billion – 35.5% more than just 12 months ago.

Japan and the United Kingdom round out the top five foreign debt holders, with our debt to the UK increasing an astonishing 173% in just the last 12 months.

TELL CONGRESS YOU DEMAND A BALANCED BUDGET AMENDMENT
Sign the Petition to Help America Get Deficit Free
http://deficitfree.com/petitions/petition-for-a-balanced-budget-amendment/

Can we really expect China to increase its lending to the US by nearly 40% next year, and each of the next nine years? Even if it wanted to, the UK doesn’t have the cash to increase its lending to the US by another 173% next year.

Any one of these debt holders could put the US economy in collapse overnight by selling or even just threatening to sell off their US debt holdings.

We owe them…they own us! Clearly, our national independence is in grave risk.

The Federal government also owes Social Security and Medicare $4.5 Trillion. With the economic downturn, Social Security doled out more money than it took from employees’ paychecks for the first time this year. By 2016 – just seven years from now – according to the Social Security Trustees report, Social Security will move from surplus to permanent deficit as the baby boomers retire.

That “lock-box” presidential candidates like to talk about has never existed. The Social Security ponzi scheme makes Bernie Madoff look like a wayward kid shoplifting a pack of gum.

If we do not balance the budget by the time Social Security moves to permanent deficit in 2016, we almost assuredly will not without a cataclysmic economic crisis.

TELL CONGRESS YOU DEMAND A BALANCED BUDGET AMENDMENT
Sign the Petition to Help America Get Deficit Free
http://deficitfree.com/petitions/petition-for-a-balanced-budget-amendment/

Had enough GLOOM & DOOM?

What’s the solution? A balanced budget constitutional amendment.

History has shown Congress simply won’t act responsibly unless the voters force them to balance the budget. With great voter pressure, Congress came within 1 Senate vote of passage of the balanced budget amendment in 1996 – and the Congress passed balanced budgets each of the next four years.

When support for the balanced budget amendment waned, Congress spent like crazy.

A balanced budget amendment is the only cure to a Congress unwilling to control spending. In fact, Germany passed the BBA just last year.

TELL CONGRESS YOU DEMAND A BALANCED BUDGET AMENDMENT
Sign the Petition to Help America Get Deficit Free
http://deficitfree.com/petitions/petition-for-a-balanced-budget-amendment/

Thats why we launch this week DeficitFree.com – a national push for a Balanced Budget Amendment by July 4, 2013, and a balanced Federal budget by July 4, 2016. These would be the two best birthday gifts we could give our country!

Our first and immediate goal is to bring together 5 Million Balanced Budget Amendment supporters by July 4, 2010, with a minimum of 5,000 from each Congressional district. You can join the movement at www.DeficitFree.com. This non-partisan movement is being launched by some of America’s most successful grassroots activists – not Washington DC politicians.

We need 5 million voters to work together to ensure the Balanced Budget Amendment becomes the most prominent issue in the 2010 Congressional races and in the 2012 Presidential contest.

If we don’t, it won’t be our grandkids who will suffer the economic collapse of our country and our loss of national independence.

It will be us!

Defend America,

Tim Mooney
DeficitFree,com

P.S. The Social Security Trustees predict Social Security will move from surplus to permanent deficit by 2016 – just seven years from now. If we haven’t balanced the budget by then, we likely won’t without a cataclysmic economic collapse. That’s why we need a Balanced Budget Amendment passed now! Please sign the DeficitFree.com petition now! http://deficitfree.com/petitions/petition-for-a-balanced-budget-amendment/

Deficit Free – 406 First Street SE, Third Floor, Washington DC 20003

Farmers, Hemp Industry Leaders Arrested for Planting Industrial Hemp at DEA Headquarters in Act of Civil Disobedience to Protest ‘Reefer Madness’

Fed Up Captains of Hemp Industry Plant Hemp Seed on DEA’s Lawn With Ceremonial Shovels

DEA’s Continued Blockade of State Industrial Hemp Programs Violates Common Sense as Well as Obama’s Presidential Directive to Federal Agencies to Respect States’ Rights

WASHINGTON, Oct. 13 /PRNewswire-USNewswire/ — At approximately 10 a.m. this morning, North Dakota farmer Wayne Hauge, Vermont farmer Will Allen, and fed up American entrepreneurs, who have dedicated their livelihoods to developing and marketing healthy, environmentally-friendly hemp products, for the first time turned to public civil disobedience with the planting of industrial hemp seed at DEA headquarters (700 Army Navy Dr Arlington, VA 22202) to protest the ban on hemp farming in the United States. Even though the U.S. is the largest market for hemp products in the world, and industrial hemp is farmed throughout Europe, Asia and Canada, not a single American farmer has the right to grow the versatile crop which is used for food, clothing, body care, paper, building materials, auto paneling and more.

Hoping to focus the attention of the Obama Administration on halting DEA interference, North Dakota Farmer Wayne Hauge; Founder of Cedar Circle Organic Farm in Vermont Will Allen; Hemp Industries Association (HIA) President Steve Levine; Dr. Bronner’s Magic Soaps President David Bronner; Vote Hemp Communications Director Adam Eidinger and Founder of Livity Outernational Hemp Clothing, Issac Nichelson were arrested while digging up the DEA’s lawn to plant industrial hemp seed imported from Canada. At this time, they are
currently being held in Arlington County jail and are awaiting charges. They are expected to be released later this afternoon and will be available for interviews upon release. The six protesters planted hemp seeds with ceremonial chrome shovels engraved with:

Hemp Planting Oct. 2009 ~ DEA Headquarters ~ American Farmers Shall Grow Hemp Again

Reefer Madness Will Be Buried

Mr. Hauge is licensed by North Dakota to cultivate and process non-drug industrial hemp, just as Canadian farmers across the border have done profitably for over ten years supplying the booming U.S. market. However, the DEA refuses to distinguish non-drug industrial hemp cultivars grown for millennia for seed and fiber and has unconstitutionally blocked all state hemp programs such as North Dakota’s. Mr. Hauge, along with North Dakota State Rep. David Monson, sued the DEA in the U.S. District Court of North Dakota in 2007, and the case is currently before the Eighth Circuit Court of Appeals. “In recent years there has been strong growth in demand for hemp in the U.S., but the American farmer is being left out while Canadian, European and Chinese farmers fill the void created by outdated federal policy,” said fourth-generation farmer Hauge. “When hemp is legalized, land grant universities across the nation will develop cultivars suitable to different growing regions to enhance yield and explore innovative uses such as cellulosic ethanol.”

Pictures and video of the action for free and unrestricted use, along with hemp farming footage and background information are available upon request in hardcopy and online. An HIA produced video of the action will also be posted, after 6 p.m. on 10/13 at: www.votehemp.com/DEAhempplanting.html

In the back drop of the spectacle at DEA headquarters, dozens of hemp business owners in town attending the HIA convention over the weekend fanned out across Capitol Hill to lobby lawmakers in support of hemp legislation introduced by Representatives Ron Paul (R-TX) and Barney Frank (D-MA) that would permit states to cultivate non-drug industrial hemp under state industrial hemp programs. Nine states have such programs, but their implementation has been blocked by DEA bureaucratic intransigence. This spring, however, President
Obama instructed federal agencies to respect state laws in a presidential directive on federal pre-emption:

“Executive departments and agencies should be mindful that in our federal system, the citizens of the several States have distinctive circumstances and values, and that in many instances it is appropriate for them to apply to themselves rules and principles that reflect these circumstances and values. As Justice Brandeis explained more than 70 years ago, ‘it is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory and try novel social and economic experiments without risk to the rest of the country.'”
– Source:
www.whitehouse.gov/the_press_office/Presidential-Memorandum-Regarding-Preemption/

Vote Hemp and the HIA are dedicated to a free market for low-THC industrial hemp and to changes in current policy to allow U.S. farmers to once again grow this agricultural crop. Dr. Bronner’s Magic Soaps President and Vote Hemp Director David Bronner stated: “Dr. Bronner’s has grown into the leading natural soap brand in the U.S. since incorporating hemp oil in 1999, due in significant part to the unsurpassed smoothness it gives our soaps. As an American business, we want to give our money to American farmers and save on import and freight costs. In this difficult economy, we can no longer indulge the DEA’s self-serving hemp hysteria.”

SOURCE Hemp Industries Association

Ryan Fletcher, +1-202-641-0277, for Hemp Industries Association; or Adam Eidinger of Hemp Industries Association, +1-202-744-2671

O. Max Gardner III
Shelby, N.C. March 31, 2008
Times are tough. Suffice it to say, we are embroiled in considerable market, economic and outright personal turmoil. Gas and food prices are going up and up and home values are going down and down. Real wages are flat and as they say “a dollar ain’t what it used to be.” Since we stand to see trillions of dollars’ worth of assets vaporize in the ensuing mess, we ought to take a long look back at history to see how we got into it, and how we might get out of, this god-awful mess. We also need to understand that Henry Paulson and Ben Bernanke, without an explicit vote by the Congress, have put virtually billions of dollars of taxpayer money at risk to save us from the risky and unregulated business practices of the investment bankers and hedge funds.
What has placed the entire American financial capitalism system in jeopardy of a complete collapse? How did we get to the point where the Government of last resort (the U.S. Treasury) is working with the lender of last resort (the Federal Reserve) to shore up housing and credit markets to avoid the Great Depression II? And, what caused a Republican administration to throw overboard the idea that the market can sort out this mess by itself? How did the fifth biggest investment bank in the world implode in approximately 24 hours? In order to understand the present, we must first understand the past.
Just ten years ago the markets and the economy were shocked when John Meriwether’s Long Term Capital Management fund imploded and lost some $4 billion dollars. The failure of LTCM helped foster a global financial crisis and triggered both a Wall Street-led bailout and congressional hearings on the dangers of hedge funds, the free-wheeling pools for wealthy investors and institutions that often trade heavily and rely on borrowed money to bolster returns.
Did we learn anything from this disaster and did Mr. Meriwether? Regrettably, the answer to both of these questions is no. Even today Mr. Meriwether’s biggest fund, JWM Partners LLC, has plunged 28% since the first of the year and some of his investors are trying to get their money out. The struggles of Mr. Meriwether and his new investment funds represent clear warning signals that we have learned nothing from the past and that the perils of the current crisis are far from over. In fact, one observer has noted that we are just in the first inning of an extra-inning game.
The Meriwether problem was not the only warning sign. Half a decade ago, the entire nation was shocked when award-winning “innovator” Enron and George Bush’s favorite son, Kenny-Boy Lay, turned out to be little more than high-end con artists in charge of what was then the largest cash-shredding pyramid scheme in the history of the world. The crucial failing for investors was Enron’s use of opaque, “mark-it-to-model” accounting techniques.
The problem with this type of accounting is that it uses “computer or notional values” where there is no real market for the real-world valuation of assets. So, instead of using an objective market to benchmark the value, you mark your assets to the so-called model, which in many cases is completely divorced from the real world. This accounting magic is especially helpful when you are wrong about the real value of the assets, either because you made an error or because you based it on exceedingly generous assumptions. I don’t know about the rest of you but the theory of “notional asset values” has never really registered with me. Or, to put it another way, this is the type of deal that even Howie Mandel would call out “no deal.”
In the end, of course, we all learned that Enron’s accounting was more or less a mark-to-fairy-tale model, with the company booking enormous gains from assumed future profits on schemes (like bandwidth trading) that sounded great, but had little chance of producing anything besides headlines. Enron actually securitized every receivable and contract it created and in some cases resecuritized the original deals two or three times over. Enron even securitized contracts where there was no real chance of any future income to fund the deal. Enron operated on the theory that if we show you the securitized bond and if you show us the money then we will eventually show you a big future profit.
Does any of this sound familiar? It should because all of this was engineered by Enron’s original golden boy, Andy Fastow. If you want a little hint about why things at Enron went so far south, then you need to know that before he signed on with Enron Andy was one of those tall-building mortgage bankers. Andy really only applied to the questionable Enron receivables and other opaque “assets” the bizarre securitization models and structures that he had worked with on a daily basis in the mortgage banking business. In light of the current market meltdown, I suppose that Andy must be having severe second thoughts about his guilty plea. Kenny-Boy Lay, on the other hand, is well past the second thought process.
Andy Fastow, meet Freddie and Fannie
You might think we’d learned our lessons about fantasy accounting after John Meriwether and Enron, but you would be wrong. Things actually got worse. And I mean much worse. Meriwether and Enron were like the “head start” problems for high school seniors. The Enronization infection moved to the comfy-sounding “homeownership” market. Against a star-spangled, feel-good backdrop of George Bush touting the “American Dream” and increasing homeownership, our recent mark-to-model mania tripped up a lot more than one big company.
The problem is that this infection quickly swept through the entire banking world. Bear Stearns is not the first to choke on the lousy, poorly modeled mortgage-backed securities, and it will not be the last. I would even suggest that the late author Hunter Thompson would find the “collateral debt obligations” and “credit default swaps” to be just plain weird stuff! What did Hunter say, when things turn weird the weird turn pro? Well, we have had our share of pros in this game, that’s for sure. Tony Mozillo, the butcher’s son, is one name that hits the top of this list.
But more dangerous yet was the way this mania also infected our own almost scared Government Sponsored Entities. The fact of the matter is that the most widespread mark-to-model fantasies were actually committed not by some easy-to-blame Wall Street guru like Mozillo, but by Freddie Mac and Fannie Mae, our two most favored GSEs.
One of my dear friends refers to the two GSEs as Fanron and Freddie Kruger. And, her fears as expressed by her naming rights may not be so far-fetched. Mr. Paulson and the Federal Reserve Board just allowed Fannie and Freddie to increase their leverage so that they can buy about $200 billion more in bad mortgage-backed securities. So, Fannie and Freddie will get even bigger but at what price? They accounted for 76% of the new mortgage market share for the fourth quarter of last year, up from 46% in the second quarter. And even though they are not part of the Government, everyone knows that if either Fannie or Freddie stumbles, the taxpayers will get stuck with the tab. Whether or not you agree with Ron Paul on most things you should agree with him with respect to his concerns about our liability for the operations of Fannie and Freddie. We should cut off the implicit government guarantees for their operations and let them take their losses like the rest of the losers.
It was flawed models (and the habit of booking earnings on these models) that enabled financial companies to concoct the elaborate securities that funded the bubble. And now, to save us from disaster the Federal Reserve has agreed for the first time in history to make direct loans to these same investment banks. As a non-lawyer asked me last week, “Is this legal?” The answer is I don’t know but it does not pass the “smell” test. In the first three days of this new era, securities firms borrowed an average of $31.3 billion per day from the Federal Reserve System. These are big numbers any way you do the math. And yes, these are the same investment banks whose CEOs paid themselves handsome bonuses ahead of the current financial tsunami. These guys don’t deserve a bailout with our money. What they deserve is a public flogging and then about 20 years of hard-labor at GitMo.
But the fat-cat CEOs weren’t the only ones making out like bandits. While Wall Street was booking fantasy profits on bad assumptions about real estate mortgages, Freddie and Fannie were securitizing anything that looked like a mortgage, whether the broker-completed application form was based on real numbers or just plain fabricated numbers and made-to-order appraisals. So the thought of using Freddie and Fannie, no matter how you dress them up, to save us from financial ruin seems like another Alice-in-Wonderland story from the dark side. This is akin to selecting Tony Soprano to serve as Director of the Federal Bureau of Investigation. Does this really make you feel safer about the security of our money? I don’t think so.

But, What Were They Really Thinking?
In their pyramid schemes (excuse me I mean in their computer models), house prices always go up. In their models, you can pay any price for a home, so long as you can make the monthlies with a teaser-rate ARM, never mind the upcoming adjustments that will take the APR up to 14% and then double the monthly payments. In their models, it’s OK to take out a Payment Option ARM where you elect to make no monthly payments at all, thereby increasing the total debt owed each month (this is what the accountants call negative amortization). In their models, you avoid all of these problems via a refinance down the line with an equity cash-out to boot. In their models, it’s OK to buy on a less-than-forthcoming, Alt-A so-called “liar loans,” because there’s no real punishment for lying on a mortgage application — particularly if everyone’s doing it. With these models, it makes sense to buy three other homes, in order to flip them later. And it makes sense to extract HELOC cash from the home, based on fantasies about continually increasing “equity.” What goes up never goes down, right? The law of gravity has no application to residential real estate!
The sad truth of the matter is that all of this is not so different from what brother Meriwether and Enron were doing. Freddie and Fannie were marking up the value of their assets (the bonds) to a model (their belief that real estate prices always go up). They were allowing the consumers who were taking out the underlying mortgages to spend their new-found “income” immediately, on iPods, Hummers, $250 designer jeans, and fancy vacations to Maui and Mexico. What was the saying—here today and gone to Maui? This happened all over the country, and millions of people behaved the same way. In fact, the American Fantasy of owning a home (for no money down) that would provide a fully leveraged, 10% annual returns for a decade, is precisely what enabled those Wall Street suits to do what they did. It takes two to tango, folks. And this was the biggest dance party in economic history.
Last year’s model got ugly
Alas, the music stopped and the dance is over. And when the music stopped we all found out that there were not enough chairs for all of us to sit down. It is bye-bye Miss American Pie, we all went to the bank but all the banks were dry. And, finally, we all realize that this dream’s “income” wasn’t actually matched by real cash flows, just fuzzy math and bizarre computer models — precisely the problem at Enron. The “income” was all hot air. And now that the “income” from home appreciation has turned negative, it must be supported by cash mortgage payments. But many people can’t pay those bills, the mortgages are defaulting in huge numbers, and now, we are all paying a huge price, even those of us who didn’t throw our money into a flimsy, overpriced McMansion.
Almost 18 months ago the “industry” lambasted the Center for Responsible Lending when it predicted that foreclosure rates on subprime mortgage loans could hit a outstanding and unbelievable rate of 19%. Well, the most recent figures from December of 2007 reveal that the current rates are 25.2%! As they say on the Verizon commercials, can you hear me now? And just last week Fitch predicted that almost 50% of these mortgages would eventually end up in foreclosure. I think that is 1 out of every 2, regardless of how you do the math or the model.
We all know that the Bear Stearns stockholders were wiped out for either $2.00 or $10.00 per share, take your pick. Hell, their office building in New York is worth more than Morgan has offered for all of the stock. Many other stocks have been creamed. The losses at those companies most directly victimized by their own housing-bubble ineptitude – Citigroup, HSBC, USB and Wachovia — are easy to understand. But, of course, the losses have extended much further than that. Even mighty Apple has dropped like a rock, as investors wonder how many iPods can be sold in Foreclosureville, U.S.A. And if they can’t afford their beloved iPods, what will they buy? That’s the thinking that has crushed everything from trendy togs-sellers like Zumiez to mom and pop carmakers like good old GM and Ford.
Consumers are spending less, and the Federal Reserve is printing money like the banks used to print credit cards. We are in a serious recession and appear to be headed directly into stagflation-a combination of recession and inflation. And the real concern at the kitchen table is that no one appears to be in charge or on top of the problem. The average American does not care what Reverend Wright said, but whether or not they can buy food and fuel next week.
It’s Ugly Out There
By now, it ought to be clear that I have been, and remain, very negative on the state of the American economy. But, I am certain that this systemic failure has steered us into a terrifying and possible direct crash right into the proverbial ditch. And, make no mistake about it, this ditch is deep and nasty and the extraction process will be long and difficult. As the lost safari leader once said, “Folks, there just ain’t no easy way out.”
The real tragedy is that all of these problems were spawned by greed gone amok on Wall Street and by the lack of any meaningful oversight from Washington and the Federal Reserved Board. I am not sure if we will have another Great Depression but it is possible and more of us realize it every day. If it happens, and if the worst case scenario turns into a real American tragedy, then the road to recovery will be long and winding with many bumps and detours along the way. It all makes me think that Andy Fastow must be sitting back in his cell at Club-Fed with a little smile on his face. If so, the Andy is the only one laughing now! The only one.

O. Max Gardner III

Larry Flynt

Publisher of Hustler magazine and free speech advocate
Posted: August 20, 2009 08:15 PM

The American government — which we once called our government — has been taken over by Wall Street, the mega-corporations and the super-rich. They are the ones who decide our fate. It is this group of powerful elites, the people President Franklin D. Roosevelt called “economic royalists,” who choose our elected officials — indeed, our very form of government. Both Democrats and Republicans dance to the tune of their corporate masters. In America, corporations do not control the government. In America, corporations are the government.

This was never more obvious than with the Wall Street bailout, whereby the very corporations that caused the collapse of our economy were rewarded with taxpayer dollars. So arrogant, so smug were they that, without a moment’s hesitation, they took our money — yours and mine — to pay their executives multimillion-dollar bonuses, something they continue doing to this very day. They have no shame. They don’t care what you and I think about them. Henry Kissinger refers to us as “useless eaters.”

But, you say, we have elected a candidate of change. To which I respond: Do these words of President Obama sound like change?

“A culture of irresponsibility took root, from Wall Street to Washington to Main Street.”
There it is. Right there. We are Main Street. We must, according to our president, share the blame. He went on to say: “And a regulatory regime basically crafted in the wake of a 20th-century economic crisis — the Great Depression — was overwhelmed by the speed, scope and sophistication of a 21st-century global economy.”

This is nonsense.

The reason Wall Street was able to game the system the way it did — knowing that they would become rich at the expense of the American people (oh, yes, they most certainly knew that) — was because the financial elite had bribed our legislators to roll back the protections enacted after the Stock Market Crash of 1929.

Congress gutted the Glass-Steagall Act, which separated commercial lending banks from investment banks, and passed the Commodity Futures Modernization Act, which allowed for self-regulation with no oversight. The Securities and Exchange Commission subsequently revised its rules to allow for even less oversight — and we’ve all seen how well that worked out. To date, no serious legislation has been offered by the Obama administration to correct these problems.

Instead, Obama wants to increase the oversight power of the Federal Reserve. Never mind that it already had significant oversight power before our most recent economic meltdown, yet failed to take action. Never mind that the Fed is not a government agency but a cartel of private bankers that cannot be held accountable by Washington. Whatever the Fed does with these supposed new oversight powers will be behind closed doors.

Obama’s failure to act sends one message loud and clear: He cannot stand up to the powerful Wall Street interests that supplied the bulk of his campaign money for the 2008 election. Nor, for that matter, can Congress, for much the same reason.

Consider what multibillionaire banker David Rockefeller wrote in his 2002 memoirs:

“Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.”

Read Rockefeller’s words again. He actually admits to working against the “best interests of the United States.”

Need more? Here’s what Rockefeller said in 1994 at a U.N. dinner: “We are on the verge of a global transformation. All we need is the right major crisis, and the nations will accept the New World Order.” They’re gaming us. Our country has been stolen from us.

Journalist Matt Taibbi, writing in Rolling Stone, notes that esteemed economist John Kenneth Galbraith laid the 1929 crash at the feet of banking giant Goldman Sachs. Taibbi goes on to say that Goldman Sachs has been behind every other economic downturn as well, including the most recent one. As if that wasn’t enough, Goldman Sachs even had a hand in pushing gas prices up to $4 a gallon.

The problem with bankers is longstanding. Here’s what one of our Founding Fathers, Thomas Jefferson, had to say about them:

“If the American people ever allow private banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their father’s conquered.”

We all know that the first American Revolution officially began in 1776, with the Declaration of Independence. Less well known is that the single strongest motivating factor for revolution was the colonists’ attempt to free themselves from the Bank of England. But how many of you know about the second revolution, referred to by historians as Shays’ Rebellion? It took place in 1786-87, and once again the banks were the cause. This time they were putting the screws to America’s farmers.

Daniel Shays was a farmer in western Massachusetts. Like many other farmers of the day, he was being driven into bankruptcy by the banks’ predatory lending practices. (Sound familiar?) Rallying other farmers to his side, Shays led his rebels in an attack on the courts and the local armory. The rebellion itself failed, but a message had been sent: The bankers (and the politicians who supported them) ultimately backed off. As Thomas Jefferson famously quipped in regard to the insurrection: “A little rebellion now and then is a good thing. The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”

Perhaps it’s time to consider that option once again.

I’m calling for a national strike, one designed to close the country down for a day. The intent? Real campaign-finance reform and strong restrictions on lobbying. Because nothing will change until we take corporate money out of politics. Nothing will improve until our politicians are once again answerable to their constituents, not the rich and powerful.

Let’s set a date. No one goes to work. No one buys anything. And if that isn’t effective — if the politicians ignore us — we do it again. And again. And again.

The real war is not between the left and the right. It is between the average American and the ruling class. If we come together on this single issue, everything else will resolve itself. It’s time we took back our government from those who would make us their slaves.

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

Since the bailouts last fall, lawmakers have been behaving as quasi-owners of the bailed-out banks and businesses, leading to calls for increased regulation of executive compensation and other wasteful expenditures. We have heard much about bonuses and executive pay packages that sound more like lottery winnings than an honest salary.

Many lawmakers voted in favor of these unconstitutional bailouts, believing that these corporations were too big to fail, and allowing them to go under would precipitate widespread economic disaster. This second wave of citizen outrage at the bailouts has left these lawmakers with a bit of egg on their face, and once again, they feel the need to “do something” to “fix” it. Shouldn’t there be a regulatory structure in place governing executive compensation? Politically, it seems quite feasible. People are outraged that the system has once again gutted the many to make a few at the top fantastically wealthy. But they are incorrectly demonizing the free market.

What we need to realize is that there WAS a regulatory structure in place that was attempting to stop bad management, including overpaying executives. That regulatory structure is the free market, and when poor management brought these companies to the point of bankruptcy, Congress circumvented the wisdom of the free market, and inserted its own judgment at our expense. And now because of that intervention, we will burdened with massive new regulations. We can be certain this effort will fail.

The free market is a naturally occurring phenomenon that can’t be eliminated by governments, not even totalitarian ones like the former Soviet Union. It can be regulated, over-taxed and manipulated until it is driven underground. Lately it has been wrongly accused of doing so many things it just doesn’t do, that are really the fault of crony corporatism and convoluted government policies that brought on the crisis. Too many people equate the free market with big business doing whatever it wants, but that is not the free market. Unconstitutional taxpayer funded bailouts are what allow giant corporations to run roughshod over the economy. The free market is what puts them out of business when they misbehave.

The free market is you and your neighbors working hard to produce what you produce, and exchanging goods and services voluntarily, in mutually agreeable arrangements. The free market is about respecting property rights and contracts. It is not about building up oligarchs and monopolies and confiscatory tax theft – these are creatures of government.

We must watch out when government comes up with interventionist solutions to interventionist problems. The root of our problems lie in interventionism. Trusting the free market is the solution.

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

The Cash for Clunkers program has received a lot of attention this week on Capitol Hill and across the country. The program offers a voucher of up to $4500 in federal funds to anyone who trades in a working used car for a new one with better fuel economy. Congress was shocked at how quickly people responded to promises of free money and drained the program, while car dealers have been equally shocked at how slow and arduous the government’s website to claim the rebates has been.

It’s not a shock that people respond to incentives. The program has been deemed a resounding success, and Congress has authorized 2 billion more taxpayer dollars for it. But not everyone is happy about this. Low-income earners who would have been in the market for those perfectly serviceable, working cars will have fewer to choose from, and those cars will probably be more expensive than they normally would have been. Automotive repair shops actively lobbied against this program, as it will destroy many of the cars they would have repaired. They were out-lobbied. And of course, Americans as a whole are hurt, because this additional bailout of auto companies comes at our expense through inflation.

I have introduced a somewhat similar bill that would have provided a much better alternative to Cash for Clunkers because it does not rely on increased government bureaucracy or spending. My bill HR 1768 provides tax credits to people trading in used cars for new cars with better fuel economy. There is a big difference, in my mind, between letting people keep their own money versus giving them someone else’s. It is clear which one a free and fair society would choose. Not only that, but my bill would not have required working, serviceable cars to be destroyed for scrap metal.

Cash for Clunkers is a popular program right now, but in the larger scheme of things it does very little towards accomplishing its stated goals. Requiring cars to be destroyed and new ones made to replace them might help the auto industry in the short run, but any improved fuel economy will not make up for the environmental impact of junking one car and making a new one. So this is not a program that should really make environmentalists happy.

There is also much evidence that the boost in demand for autos, that has made dealers happy, is just borrowed demand from the past and the future. In other words, many have put off purchases they would have made anyway because they were waiting to see what the government would do. Others who would have waited a little longer to trade in a vehicle are accelerating their decisions so they can get in before the money runs out. So I would not be surprised to find that this artificial boom in auto sales is followed by an extended drop. This should serve as a very tangible example of how government meddling in the economy creates booms and busts. While everyone loves the booms, the busts are what creates the crises that government thrives on, and that is what we really need to watch out for!