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Congressional Record [.PDF]
HON. RON PAUL
IN THE HOUSE OF REPRESENTATIVES
Wednesday, October 29, 2003
2003 Ron Paul 115:1
Mr. PAUL. Mr. Speaker, like all Americans, I am concerned about the loss of jobs in Americas manufacturing sector and the role currency manipulation plays in that loss. For many years, I have warned my colleagues that Americas monetary policy is endangering Americas economy. The economic difficulties currently facing this country are a classic example of the harm resulting from a boom-andbust cycle caused by an inflationary monetary policy. An open debate on monetary issues is therefore long overdue.
2003 Ron Paul 115:2
However, instead of debating Americas monetary policy, we are debating Chinas monetary policy. Specifically, the goal of this resolution is to pressure China to change the valuation of its currency. Whatever short-term benefit our manufacturers may gain from this action, the policies urged today are not in the long-term interest of the American people.
2003 Ron Paul 115:3
In arguing for fluctuating rates, the backers of H. Res. 414 are demanding that the Chinese Government adopt an irrational policy. A sound economy requires a sound and dependable unit of economic measurement. Yet, by definition, under fluctuating rates the currency, which serves as the basic unit of economic measurement, will not be sound and dependable. Instead, that value will change depending on the whims of politicians and the perceived economic needs of politically powerful special interests.
2003 Ron Paul 115:4
China, in fact, has done very well with a fixed measurement of value. Chinas economic growth rate is high; China is also exporting many products into our market while our domestic producers are suffering. Therefore, China makes a good scapegoat for our economic problems. Demanding that the Chinese government adjust its currency is a convenient distraction from addressing the real economic problems facing our country.
2003 Ron Paul 115:5
Instead of having fluctuating currency exchange rates and the inevitable instability that accompanies them, we should be working to establish a gold-backed currency whose value is determined by the market. This would provide an objective measurement of the value of economic goods and services and thus strengthen the economy by freeing it from the negative effects of our unstable monetary policy.
2003 Ron Paul 115:6
I would also urge my colleagues to consider the benefits we receive from our relationship with China. Of course, consumers benefit from lower-priced goods. Adopting the policy urged by supporters of this bill would cause consumer prices to increase, thus reducing consumers wealth. Other producers would suffer as a result of the consumers decreased purchasing power. — While there is not an organized lobby arguing against the-policy recommendations of H. Res. 414, I doubt many of our constituents want us to increase the prices they pay for goods and services.
2003 Ron Paul 115:7
Congress should also consider how the Chinese benefit the United States Government by holding our debt. The dollars the Chinese acquire by selling us goods and services must be returned to the United States. Since the Chinese are not buying an equivalent amount of American goods and services, they are using the dollars to finance our extravagant spending.
2003 Ron Paul 115:8
In fact, Mr. Speaker, our ability to continue to fund the welfare-warfare state without destroying the American economy depends on foreigners buying our debt. Perhaps we should think twice before we start bullying and browbeating our foreign creditors to change their economic or other polices to our liking.
2003 Ron Paul 115:9
H. Res. 414s underlying premise is that sovereign countries have a duty to fashion economic policies that benefit the United States and it is a proper concern of Congress if these countries fail to do so. H. Res. 414 attempts to justify Congressional interference in the internal economic affairs of China by claiming that China is not living up to its obligations as a member of the World Trade Organization (WTO). I would remind my colleagues that the WTO has oftentimes ruled against the United States and Congress is right now changing United States tax laws to please the WTO. Ceding control over United States tax and trade policy to this international organization violates the United States Constitution and is contrary to the interests of American citizens. Therefore, it is not wise to endorse the WTO process by encouraging other countries to submit to WTO control.
2003 Ron Paul 115:10
Instead of promoting global economic government, the United States Congress should reform those policies that reduce our manufacturers competitiveness. Recently, a financial journalist visited with businessmen who are launching new enterprises in China. When he asked them why they chose to invest in China, they answered: It is so much easier to start a business in China than in the United States, especially in places like Massachusetts and California. This answer should send a clear message to every lawmaker in America: the taxes and regulations imposed on American businesses are damaging economic growth and killing jobs. If we were serious about creating jobs, we would be working on an aggressive agenda of cutting taxes and repealing needless regulations.
2003 Ron Paul 115:11
Congress can also improve Americas competitive position by ending the practice of forcing American workers to subsidize their foreign competitors through organizations such as the Export-Import Bank and the International Monetary Fund. I have introduced the Steel Financing Fairness Act (H.R. 3072) to accomplish this goal. H.R. 3072 prevents taxpayer funds from being sent to countries, such as China, that subsidize their steel industries. Of course, our ultimate goal should be to end all taxpayer subsidies of foreign corporations and governments.
2003 Ron Paul 115:12
In conclusion, Mr. Speaker, I remind my colleagues that stability in currencies is something we should seek, not something we should condemn Instead of urging China to adopt a floating rate, Congress should be working to adopt a stable, commodity-backed currency whose value is determined by the market and encourage other countries to also adopt a market-based currency. This will benefit American workers, entrepreneurs, and consumers. Congress should also strengthen Americas economy by reducing taxes and repealing unnecessary and unconstitutional regulations and stop forcing American taxpayers to subsidize their foreign competitors.