PoliticalAction.com Blog

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

Last week, the House approved another increase in the national debt ceiling. This means the government can borrow $1.9 trillion more to stay afloat and avoid default. It has been little more than a year since the last debt limit increase, and graphs showing the debt limit over time show a steep, almost vertical trend. It is not likely to be very long before this new ceiling is met and the government is back on the brink between default and borrowing us further into oblivion. Congressional leaders and the administration acknowledge that the debt limit will need to be increased again next year. They are crossing their fingers that the forecasts are correct and they will not need another increase sooner, even before the 2010 midterm elections.

Continually increasing the debt is one of the logical outcomes of Keynesianism, since more government spending is always their answer. It is claimed that government must not stop spending when the economy is so fragile. Government must act. Yet, when times are good, government also increases in size and scope, because we can afford it, it is claimed. There is never a good time to rein in government spending according to Keynesian economists and the proponents of big government.

Free market Austrian economists on the other hand know that times are bad because of the size and scope of government. The economy is fragile because of the overwhelming stranglehold of bureaucracy and taxation of Washington. Any jobs Washington might create through these endless spending programs are paid for through more taxation and debt put on the productive sectors of the economy. Just as insidious is the hidden tax of inflation caused by the Fed and its ever-expanding credit bubble. When the Fed steps in with its solutions, it only devalues the dollars in everyone’s pocket while encouraging more reckless waste on Wall Street. All of this leads to a worsening economy, not an improved one.

And so the downward spiral continues. The worse things get, the more politicians want to spend. The more they spend, the heavier the debt load becomes and the more we have to spend just to maintain our interest payments. As our debt load becomes unsustainable, the alarm of our creditors increases. It is becoming so serious that our credit rating, as a nation, could be downgraded. If this happens, interest on the national debt will increase even more, leading to even higher taxes on Americans and inevitably, price inflation.

Still, Washington is full of talk of more regulation, more taxation and more spending. The Senate is still struggling to pass a massive regulatory increase on the financial sector, even as the stock market suffers more shockwaves. Pay-as-you-go rules give the appearance of fiscal responsibility, but in truth these rules are only used as a justification to raise taxes. Spending programs like healthcare reform, increased military spending, and a recent doubling of destructive foreign aid are viewed by Washington as necessary and reasonable, instead of foolishness we absolutely cannot afford.

The people understand this, which is why there is so much anger directed at politicians. Washington needs to change its thinking and adopt some common sense priorities. The Constitution gives some excellent limitations that would get us back on the right path if we would simply abide by them. The framers of the Constitution understood that only the ingenuity of the American people, free from government interference, could get us through hard times, yet Washington seems bent only on prolonging the agony.

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

By Barry Goldwater, Jr. on 8.26.09 @ 6:08AM

Nowhere in the debate regarding health care has anyone asked if the government is able and qualified to run such a system. Before we ask the government to manage universal health care, let’s check them out.

How successful has the federal government been in managing agencies, programs and businesses?

Let’s look at Medicare. The president and Congress propose to extend Medicare to cover the 47 million people who lack health care coverage. Did anyone remind Congress that Medicare is broke? It’s rampant with fraud and abuse. It is estimated that Medicare and Medicaid fraud cost taxpayers $60 billion per year.

Medicare is required by law to pay full retail prices for drugs that could be obtained for far less in a competitive-bidding system.

Health insurance companies are required by state regulators to maintain a reserve for future liabilities. Every working stiff in this country is required to pay premium taxes into Medicare, which has no reserve. The federal government has been running the largest Ponzi scheme ever created, and it is on the hook for $36 trillion in unfunded liabilities. And you, Mr. President, want the federal government to run health care?

On Aug. 4, 1977, Jimmy Carter declared war on energy dependence and created the U.S. Department of Energy. Every president since has done the same. Today, 31 years later, the Department of Energy’s budget is $26 billion. It employs 16,000 people and 100,000 contract employees. We are no closer to energy independence than we were in 1977. And you want the federal government to run health care?

The U.S. Postal Service lost $7 billion last year and is talking about closing hundreds of offices. And you want the federal government to run health care?

The Federal Reserve was created by the Federal Reserve Act of 1913 to maintain a stable financial system. The Federal Reserve gets failing marks for its direct complicity in the economic meltdown and subsequent recession. The Federal Reserve has failed us. And you want the federal government to run health care?

Fannie Mae and Freddie Mac were created by Congress as government-sponsored enterprises to provide low-interest funding for the mortgage industry. These government-run mortgage banks were created to provide competition and cheap loans to those who could not afford normal market rates.

Fannie Mae and Freddie Mac own more than $5 trillion in mortgage paper. On Sept. 7, 2008, they were declared insolvent and were taken over by the Federal Housing Finance Agency and bailed out with more than $400 billion — another government-run mess. And you, Mr. President, want the federal government to run health care?

Amtrak was created by an act of Congress in October 1970 to run the nation’s railroad system. Amtrak was supposed to reverse over two decades of continuous operating deficits. With a congressional mandate to become profitable, it was given $40 million in initial funding, along with $100 million in loan guarantees. After 38 years, Amtrak has never made a profit and receives a federal subsidy, with no prospect in sight of breaking even. And you want the federal government to run health care?

The war on drugs was started by President Richard Nixon in 1969. The United States has been spending $69 billion a year worldwide for the past 40 years, for a total of $2.5 trillion, on drug prohibition — with little to show for it. Today, there are more drugs on our streets at cheaper prices than ever before. It is easier for young people to obtain illegal drugs than a six-pack of beer. Why? Because sellers of illegal drugs don’t ask kids for IDs. And you want the federal government to run health care?

The list of government failures is long and telling. I can’t wait for “Government Motors'” new car. Are you waiting anxiously? Are you holding your breath? That car will be on recall for many years. And you, Mr. President, want the federal government to run health care?

The government has failed for 30 years to achieve energy independence. The government has bankrupted the Medicare program. The Postal Service is broke. The Federal Reserve was the primary cause of this economic meltdown and recession. Fannie Mae and Freddie Mac have been taken over and bailed out. We have lost the war on drugs.

Mr. President, our government can’t even run a railroad. How the hell do you think the government will ever manage a universal health care system?

Einstein once said, “The definition of insanity is doing the same thing over and over again and expecting different results.”