PoliticalAction.com Blog

by Rep. Ron Paul | Texas Straight Talk
August 1, 2011

One might think that the recent drama over the debt ceiling involved one side wanting to increase or maintain spending with the other side wanting to drastically cut spending, but that is far from the truth. In spite of the rhetoric being thrown around, the real debate is over how much government spending will increase. No plan under serious consideration cuts spending in the way you and I think about it. Instead, the cuts being discussed are illusory and are not cuts from current amounts being spent, but cuts in prospective spending increases. This is akin to a family saving $100,000 in expenses by deciding not to buy a Lamborghini and instead getting a fully loaded Mercedes when really their budget dictates that they need to stick with their perfectly serviceable Honda.

But this is the type of math Washington uses to mask the incriminating truth about the unrepentant plundering of the American people. The truth is that frightening rhetoric about default and full faith in the credit of the United States being carelessly thrown around to ram through a bigger budget than ever in spite of stagnant revenues. If your family’s income did not change year over year, would it be wise financial management to accelerate spending so you would feel richer? That is what our government is doing, with one side merely suggesting a different list of purchases than the other.

In reality, bringing our fiscal house into order is not that complicated or excruciatingly painful at all. If we simply kept spending at current levels, by their definition of cuts that would save nearly $400 billion in the next few years, versus the $25 billion the Budget Control Act claims to cut. It would only take us five years to cut $1 trillion in Washington math just by holding the line on spending. That is hardly austere or catastrophic.

A balanced budget is similarly simple and within reach if Washington had just a tiny amount of fiscal common sense. Our revenues currently stand at approximately $2.2 trillion a year and are likely to remain stagnant as the recession continues. Our outlays are $3.7 trillion and projected to grow every year. Yet we only have to go back to 2004 for federal outlays of $2.2 trillion, and the government was far from small that year. If we simply referred to that year’s spending levels, which would hardly do us fear, we would have a balanced budget right now. If we held the line on spending and the economy actually did grow as estimated, the budget would balance on its own by 2015 with no cuts whatsoever.

We pay 35% more for our military today than we did 10 years ago for the exact same capabilities. The same could be said for the rest of the government. Why has our budget doubled in 10 years? This country doesn’t have double the population or double the land area or double anything that would require the federal government to grow by such an obscene amount.

In Washington terms a simple freeze in spending would be a much bigger cut than any plan being discussed. If politicians simply cannot bear to implement actual cuts to actual spending, just freezing the budget would give the economy the best chance to catch its breath, recover and grow.

Texas Straight Talk – A Weekly Column
Rep. Ron Paul (R) – TX 14

This week marks six months since Congress passed the healthcare reform bill in what has become all-too-typical legislative chicanery. Those in power crafted a mammoth piece of legislation and rammed it through Congress under a dire sense of emergency. Insisting on time enough to read the bill was dismissed as dangerous and crazy in a time of crisis. We were told that if we really wanted to see what was in the bill we would have to pass it first. I cannot imagine the Founding Fathers intended that Congress legislate in this manner. I would think if a member is not absolutely certain the entire legislation meets constitutional muster, the default vote should be “no” in accordance with our oath of office. But now that Congress has had six months to read the new law, there is a significant amount of buyer’s remorse on Capitol Hill.

The more constituents learn about the law, the more angry they become. 60% of Americans are now to be said in favor of repealing the entire thing. Unfortunately, it is much more difficult to repeal a law than it is to pass a bill. I wrote a while back about the egregious provision to require businesses to issue 1099s for all transactions over $600 as a way to partially pay for it. I have co-sponsored legislation to fix this issue, yet this is just the tip of the iceberg.

First of all, in spite of the administration repeating over and over that this legislation would not increase costs for Americans, they are now saying they knew all along that it would. The Congressional Budget office estimates that American families will see their premiums rise by an average of $2,100 by 2016. The Wall Street Journal has reported that the cost of compliance is forcing some insurers to increase premiums by up to 20% as soon as next year. Also, in spite of repeated claims from the administration that we could all keep our plans and doctors if we liked them, the administration’s own officials are now predicting that won’t be true for up to
117 million Americans who will lose their current plans.

Major insurers are also dropping child-only plans because of mandates and price fixing on such policies leaving parents with fewer choices for their children, not more. In addition, in spite of claiming this law would contain government costs, not increase them, administration actuaries now predict it will increase healthcare spending by over $300 billion. This additional spending comes along with doctor shortages, fewer choices and more taxes, perhaps, worst of all, increases in labor cost because of health insurance mandates are discouraging employers from hiring new workers and even triggering more layoffs.

Anyone with a basic understanding of Austrian economics could have predicted the unintended consequences of these new healthcare policies. Central planning never increases choices and quality or cuts costs as promised. Price controls and government mandates always create artificial scarcity. Healthcare is not a right or privilege. It is a product, like food or clothing. As with any good or service, the free market regulation of supply and demand provides the optimal quality to the maximum number of people.

Once we realize the problems we are trying to solve today were created by government intervention beginning in the 1960s, we can begin to put patients back in control of healthcare, rather than third party oligopolies and government bureaucrats. The sooner the better.