U.S. Rep. Ron Paul | housing |
housing
State Of The Republic
28 January 1998 1998 Ron Paul 2:81
Devolution. Block grants are the popular vehicle to restore local control of the Federal bureaucracy. The housing bill, the first major change to public housing since the Depression, did not cut spending, but actually increased funding through the block grant system of devolving power to the States. A token effort similar to this was made in the early 1970s under Nixon called revenue-sharing. It did not work and was dropped.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:82
This new method will not work either. Whether the bureaucrats are in Washington or in the State capitols, it will not change the dynamics of public housing. Public ownership, whether managed locally or federally, cannot replace the benefits of private ownership. Besides, the block grant method of allocating funds does not eliminate the need to first collect the revenues nationally and politically distribute the funds to the various State entities. Strings will always be attached no matter how many safeguards are written into the law. The process of devolution is an adjustment in management and does not deal with the philosophic question of whether or not the Federal Government or even the State governments ought to be involved. The high hopes that this process will alter the course of the welfare state will, I am sure, be dashed after many more years of failures and dollars spent.
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State Of The Republic
28 January 1998 1998 Ron Paul 2:94
Corporatism. Congress and the administration is greatly influenced by corporate America. We truly have a system of corporatism that if not checked will evolve into a much more threatening form of fascism. Our welfare system provides benefits for the welfare poor and, in return, the recipients vote to perpetuate the entire system. Both parties are quite willing to continue the status quo in not questioning the authority upon which these programs are justified, but the general public is unaware of how powerful corporate America is in changing and influencing legislation. Even those programs said to be specific for the poor, like food stamps, housing, education and medicine, have corporate beneficiaries. These benefits to corporate America are magnified when it is realized that many of the welfare redistributionist programs are so often not successful in helping the poor.
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Millennium Bug
24 February 1998 1998 Ron Paul 13:2
The General Accounting Office (GAO) has reported unfavorably on the FDIC’s readiness. Before the Subcommittee on Financial Services and Technology, Committee on Banking, Housing and Urban Affairs, US Senate, Jack L. Brock, Jr., Director, Governmentwide and Defense Information Systems, testified on February 10, 1998 (Year 2000 Computing Crisis: Federal Deposit Insurance Corporation’s Efforts to Ensure Bank’s Systems Are Year 2000 Compliant) that the Federal Deposit Insurance Corporation (FDIC) has not met its own “y2k-compliant” standards. According to GAO, the FDIC has not yet completed the assessment phase of the remediation process, despite its own standard that banks under the agency’s supervision should have completed this phase by the end of the third quarter of 1997.
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Birth Defects Prevention Act
10 March 1998 1998 Ron Paul 24:3
As a Congressman, I have repeatedly come to the house floor to denounce the further expansion of the federal government into areas ranging from “toilet-tank-size mandates” to “public housing pet size;” areas, that is, where no enumerated power exists and the tenth amendment reserves to state governments and private citizens the exclusive jurisdiction over such matters. My visits to the floor have not gone uncontested — proponents of an enlarged federal government and more government spending have justified their pet spending and expansionist projects by distorting the meaning of the “necessary and proper” and “common defense and general welfare” clauses to encompass the constitutionally illegitimate activities they advocate. Even the Export-Import Bank and Overseas Private Investment Corporation during Foreign Operations Appropriations debate were constitutionally “justified” by the express power to “coin money and regulate the value thereof”? In other words, where money exists, credit exists — where credit exists, loans exist — where loans exist, defaulters exist — and from this, the federal government has a duty to bail-out (at taxpayer expense) politically connected corporations who make bad loans in political-risk-laden venues?
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Emergency Supplemental Appropriations Act
31 March 1998 1998 Ron Paul 31:1
Mr. PAUL. Mr. Chairman, I rise in opposition to H.R. 3579, the Emergency Supplemental Appropriations Act, a bill to further fund, at the expense of airports and Section 8 Housing Assistance, the unconstitutional effort to “police the world.” Having submitted amendments to the Rules Committee to defund the “police the world” aspects of this bill only to be denied in the Rules process, I must oppose final passage of this supplemental Appropriations bill.
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Head Start Program
14 September 1998 1998 Ron Paul 99:1
Mr. PAUL. Mr. Speaker, I appreciate the opportunity to express my opposition to S. 2206, which reauthorizes the Head Start program, as well as the Community Services Block Grant program and the Low Income Housing Energy Assistance Program (LIHEAP). While the goals of Head Start and the Community Services Block Grant program are certainly noble, the means these programs use to accomplish these goals (confiscating monies from one group of citizens and sending them to another group of citizens in the form of federal funding for Washington-controlled programs) are immoral and ineffective. There is no constitutional authority for Congress to fund any programs concerning child-rearing or education. Under the constitutional system, these matters are left solely in the hands of private citizens, local government, and the individual states.
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U.S. Foreign Policy and NATO’s Involvement in Yugoslavia and Kosovo
21 April 1999 1999 Ron Paul 29:52
The 1960s crowd, although having a reputation for being anti-war due to their position on Vietnam, has never been bashful about its bold authoritarian use of force to mold economic conditions, welfare, housing, medical care, job discrimination, environment, wages and working conditions, combined with a love for taxes and inflation to pay the bills. When in general the principle of government force to mold society is endorsed, using force to punish Serbs is no great leap of faith, and for the interventionists is entirely consistent. Likewise, the interventionists who justified unconstitutional fighting in Vietnam, Panama, Nicaragua, Grenada, Libya and the Persian Gulf, even if they despise the current war in Yugoslavia, can easily justify using government force when it pleases them and their home constituency.
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Preserving Housing for Senior Citizens and Families into the 21st Century
27 September 1999 1999 Ron Paul 98:1
Mr. PAUL. Mr. Speaker, I rise in opposition to H.R. 202. “Preserving Housing for Senior Citizens and Families into the 21st Century.” While my views on respecting our Constitution limitations regarding Federal issues are well known and need not be repeated here now, I have other concerns regarding this bill specifically.
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Preserving Housing for Senior Citizens and Families into the 21st Century
27 September 1999 1999 Ron Paul 98:6
Unfortunately, H.R. 202 makes the situation worse by diluting our current policy of helping the truly needy in favor of creating a middle class entitlement by expanding eligibility for occupancy to as high as 80% of the area median income for existing housing developments for seniors. I commend Mr. Stossel for illustrating clearly that choosing liberty is the best path for making a difference. I wish more of my colleagues heeded his advise.
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Health Care Reform: Treat The Cause, Not The Symptom
4 October 1999 1999 Ron Paul 103:6
No one can take a back seat to me regarding the disdain I hold for the HMO’s role in managed care. This entire unnecessary level of corporatism that rakes off profits and undermines care is a creature of government interference in health care. These non-market institutions and government could have only gained control over medical care through a collusion through organized medicine, politicians, and the HMO profiteers in an effort to provide universal health care. No one suggests that we should have universal food, housing, TV, computer and automobile programs; and yet, many of the poor do much better getting these services through the marketplace as prices are driven down through competition.
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Quality Care For The Uninsured Act
6 October 1999 1999 Ron Paul 104:3
No one can take a back seat to me regarding the disdain I hold for the HMOs’ role in managed care. This entire unnecessary level of corporatism that rakes off profits and undermines care is a creature of government interference in health care. These non-market institutions and government could have only gained control over medical care through a collusion among organized medicine, politicians, and the HMO profiteers, in an effort to provide universal health care. No one suggests that we should have “universal” food, housing, TV, computer and automobile programs and yet many of the “poor” do much better getting these services through the marketplace as prices are driven down through competition.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:20
Government statistics are continuously reaffirming our great prosperity with evidence of high and rising wages, no inflation, and high consumer confidence and spending. The U.S. Government still enjoys good credit and a strong currency in relationship to most other currencies of the world. We have no trouble financing our public nor private debt. Housing markets are booming and interest rates remain reasonable by modern day standards. Unemployment is low.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:83
Government housing programs are no more successful than the Federal Government’s medical and education programs. In the early part of this century, government housing was virtually unheard of. Now the HUD budget commands over $30 billion each year and increases every year. Finances of mortgages through the Federal Home Loan Bank, the largest Federal Government borrower, is the key financial institution pumping in hundreds of billions of dollars of credit into the housing market, making things worse. The Federal Reserve has now started to use home mortgage securities for monetizing debt. Public housing has a reputation for being a refuge for drugs, crimes and filth, with the projects being torn down as routinely as they are built. There is every indication that this entitlement will continue to expand in size regardless of its failures. Token local control over these expenditures will do nothing to solve the problem.
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A Republic, If You Can Keep It
31 January 2000 2000 Ron Paul 2:84
Recently, the Secretary of HUD, using public funds to sue gun manufacturers, claimed this is necessary to solve the problems of crime which government housing perpetuates. If a government agency, which was never meant to exist in the first place under the Constitution, can expand their role into the legislative and legal matters without the consent of the Congress, we indeed have a serious problem on our hands. The programs are bad enough in themselves but the abuse of the rule of law and ignoring the separation of powers makes these expanding programs that much more dangerous to our entire political system and is a direct attack on personal liberty. If one cares about providing the maximum best housing for the maximum number of people, one must consider a free market approach in association with a sound, nondepreciating currency. We have been operating a public housing program directly opposite to this and along with steady inflation and government promotion of housing since the 1960s, the housing market has been grossly distorted. We can soon expect a major downward correction in the housing industry prompted by rising interest rates.
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UNNECESSARY SUPPLEMENTAL APPROPRIATIONS AND UNWISE MILITARY ADVENTURISM IN COLOMBIA
March 29, 2000 2000 Ron Paul 20:3
But we should be very cautious about what we are doing today by expanding our involvement in Colombia. We are now moving into Colombia and spending a lot of money and expanding our war in this area. We should not be spending our money on military adventurism. We should be taking this money and spending it to build up our military defenses. We should be using this money to pay our military personnel more money, give them better housing and better education and better medical care.
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2000 EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT
March 29, 2000 2000 Ron Paul 21:5
I had an amendment that was not approved. But what I would have done, if I had had the chance, I would have taken all the money from the overseas spending, Kosovo, Bosnia, East Timor, and the funds now for this new adventure down in Colombia, and put it into building up our military defense. That is what we need. We need better salaries, better medical care, and we need better housing for our military personnel. But here we go spreading ourselves thinly again around the world by taking on a new adventure, which will surely lead to trouble and a lot of expense.
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Amendment No. 5 Offered By Mr. Paul
30 March 2000 2000 Ron Paul 22:17
I would have preferred an amendment that would have struck some of these funds from overseas and placed them into beefing up the military, increasing the pay of our military personnel, giving them better housing and better medical care, as well as having some of those funds spent here at home. That amendment was not permissible under the rule.
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AMERICAN HOMEOWNERSHIP AND ECONOMIC OPPORTUNITY ACT OF 2000
April 6, 2000 2000 Ron Paul 27:7
Section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305) is amended by adding at the end the following new subsection:
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ECONOMIC UPDATE
December 4, 2000 2000 Ron Paul 97:25
* A short time after Chairman Greenspan took over the reigns of the Federal Reserve the stock market crash of 1987 prompted him to alleviate concerns with a heavy dose of monetary inflation. Once again, in the slump of 1991 and 1992, he again re-ignited the financial bubble by more monetary inflation. There was no hesitation on Mr. Greenspan’s part to inflate as necessary to alleviate the conditions brought about by the Mexican financial crisis, the Asian crisis, the Russian ruble crisis, and with the Long-Term Capital Management crisis. Just one year ago the non-existent Y2K crisis prompted huge, unprecedented monetary inflation by the Federal Reserve. All these efforts kept interest rates below the market rate and contributed to the financial bubble that is now starting to deflate. But, there is no doubt that this monetary inflation did maintain an economy that seemed like it would never quit growing. Housing markets thrived, the stock market and bond market thrived, and in turn, the great profits made in these areas, especially gains made by stock market transactions, produced profits that inflated greatly the revenues that flowed into the Treasury. The serious problem that we now face, a collapsing stock market and a rapidly weakening economy, was caused by inflating the money supply along with artificially low interest rates. More inflation and continuing the policy of artificially low interest rates can’t possibly be the solution to the dilemma we face.
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CHALLENGE TO AMERICA: A CURRENT ASSESSMENT OF OUR REPUBLIC —
February 07, 2001 2001 Ron Paul 7:69
The extra credit in the 1990s has found its way especially into the housing market like never before. GSEs, in particular Freddie Mac and Fannie Mae, have gobbled up huge sums to finance a booming housing market. GSE securities enjoy implicit government guarantees, which have allowed for a generous discount on most housing loans. They have also been the vehicles used by consumers to refinance and borrow against their home equity to use these funds for other purposes, such as investing in the stock market. This has further undermined savings by using the equity that builds with price inflation that homeowners enjoy when money is debased. In addition, the Federal Reserve now buys and holds GSE securities as collateral in their monetary operations. These securities are then literally used as collateral for printing Federal Reserve notes; this is a dangerous precedent.
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Manipulation Of Interest Rates Cause Economic Problems
20 March 2001 2001 Ron Paul 22:11
The most important aspect of that is the instability it creates in the marketplace. It does not always lead to a CPI increasing at 10 or 15 percent. Our CPI is rising significantly. We have other prices going up significantly, like education costs and medical care costs, housing costs. So there is a lot of inflation even when one measures it by prices.
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Internationalizing SEC
13 June 2001 2001 Ron Paul 41:9
And even if we assume we have a surplus and the money is already in the budget, we still should be concerned because we are making a choice. We are saying that we are going to take this money and take the risk of sending it over there. Maybe it will help. Maybe I am right, maybe it will not do quite as much good as we think, but we make a trade-off. We say today that we will send this money with the hope that it will do good at the expense of a domestic program. Do my colleagues think every poor person in this country has been taken care of, their medical care needs or housing? So we do make choices continuously, but we forget about that.
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Patients’ Bill Of Rights
2 August 2001 2001 Ron Paul 74:7
No one can take a back seat to me regarding the disdain I hold for the HMO’s role in managed care. This entire unnecessary level of corporatism that rakes off profits and undermines care is a creature of government interference in health care. These non-market institutions and government could have only gained control over medical care through a collusion of organized medicine, politicians, and the HMO profiteers in an effort to provide universal health care. No one suggests that we should have universal food, housing, TV, computer and automobile programs; and yet, many of the poor to much better getting these services through the marketplace as prices are driven down through competition.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:27
The GSEs, made up of Fannie Mae, Freddie Mac, and the Federal Home Loan Bank, have managed to keep the housing market afloat, in contrast to the more logical slowdown in hotel and office construction. This spending through the GSEs has also served as a vehicle for consumption spending. This should be no surprise, considering the special status that GSEs enjoy, since their implied line of credit to the US Treasury keeps interest rates artificially low. The Clinton administration encouraged growth in housing loans that were financed through this system.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:32
A major problem still remains. Ultimately the market determines all value including all currencies. With the current direction of the dollar certainly downward, the day of reckoning is fast approaching. A weak dollar will prompt dumping of GSE securities before treasuries, despite the Treasury’s and the Fed’s attempt to equate them with government securities. This will threaten the whole GSE system of finance, because the challenge to the dollar and the GSEs will hit just when the housing market turns down and defaults rise. Also a major accident can occur in the derivatives markets where Fannie Mae and Freddie Mac are deeply involved in hedging their interest-rate bets. Rising interest rates that are inherent with a weak currency will worsen the crisis.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:36
Our dollar problem, which affects our financial and budgetary decisions, originated at the Fed with our country’s acceptance of paper money thirty years ago. Federal Reserve officials and other government leaders purposely continue to mislead the people by spouting the nonsense that there is no evidence of inflation, as measured by government-rigged price indices. Even though significant price increases need not exist for monetary inflation to place a hardship on the economy, stock prices, housing prices, costs of medical care and education, and the cost of government have all been rising at very rapid rates. But the true inflation, measured by the money supply, is rising at a rate of greater than 20%, as measured by MZM. This fact is ignored.
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Statement on the Financial Services committee’s “Views and Estimates for Fiscal Year 2003”
February 28, 2002 2002 Ron Paul 12:4
Finally, the committee’s views support expanding the domestic welfare state, particularly in the area of housing. This despite the fact that federal housing subsidies distort the housing market by taking capital that could be better used elsewhere, and applying it to housing at the direction of politicians and bureaucrats. Housing subsidies also violate the constitutional prohibitions against redistributionism. The federal government has no constitutional authority to abuse its taxing power to fund programs that reshape the housing market to the liking of politicians and bureaucrats.
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Has Capitalism Failed?
July 9, 2002 2002 Ron Paul 66:7
In the 1930s, it was quite popular to condemn the greed of capitalism, the gold standard, lack of regulation, and a lack government insurance on bank deposits for the disaster. Businessmen became the scapegoat. Changes were made as a result, and the welfare/warfare state was institutionalized. Easy credit became the holy grail of monetary policy, especially under Alan Greenspan, "the ultimate Maestro." Today, despite the presumed protection from these government programs built into the system, we find ourselves in a bigger mess than ever before. The bubble is bigger, the boom lasted longer, and the gold price has been deliberately undermined as an economic signal. Monetary inflation continues at a rate never seen before in a frantic effort to prop up stock prices and continue the housing bubble, while avoiding the consequences that inevitably come from easy credit. This is all done because we are unwilling to acknowledge that current policy is only setting the stage for a huge drop in the value of the dollar. Everyone fears it, but no one wants to deal with it.
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Free Housing Market Enhancement Act
July 16, 2002 2002 Ron Paul 70:1
Mr. Speaker, I rise to introduce the Free Housing Market Enhancement Act. This legislation restores a free market in housing by repealing special privileges for housing-related government sponsored enterprises (GSEs). These entities are the Federal National Mortgage Association (Fannie), the Federal Home Loan Mortgage Corporation (Freddie), and the National Home Loan Bank Board (HLBB). According to the Congressional Budget Office, the housing-related GSEs received $13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone.
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Free Housing Market Enhancement Act
July 16, 2002 2002 Ron Paul 70:3
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase the debt of housing-related GSEs. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.
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Free Housing Market Enhancement Act
July 16, 2002 2002 Ron Paul 70:4
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie, Freddie, and HLBB have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
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Free Housing Market Enhancement Act
July 16, 2002 2002 Ron Paul 70:5
However, despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
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Free Housing Market Enhancement Act
July 16, 2002 2002 Ron Paul 70:6
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
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Free Housing Market Enhancement Act
July 16, 2002 2002 Ron Paul 70:8
Mr. Speaker, it is time for Congress to act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors misled by foolish government interference in the market. I therefore hope my colleagues will stand up for American taxpayers and investors by cosponsoring the Free Housing Market Enhancement Act.
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25 July 2002
Monetary Practices 2002 Ron Paul 78:9
Price fixing foils the market. Government mandated ceilings on apartment rental rates, for instance, create housing shortages, as is well known by anyone who has gone apartment hunting in New York City. Similarly, a legislated interest-rate ceiling would cause a credit shortage: The volume of investment funds demanded would exceed people’s actual willingness to save.
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Republic Versus Democracy
29 January 2003 2003 Ron Paul 6:33
Public financing of housing, for instance, benefits builders, bureaucrats, insurance companies and financial institutions while the poor end up in drug-invested, crime-ridden housing projects. For the same reason, not only do business leaders not object to this system but they also become strong supporters of welfare programs and foreign aid.
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The Financial Services Committee’s Terrible Blueprint for 2004
February 28, 2003 2003 Ron Paul 27:5
Finally, the committee’s views support expanding the domestic welfare state, particularly in the area of housing. This despite the fact that federal housing subsidies distort the housing market by taking capital that could be better used elsewhere, and applying it to housing at the direction of politicians and bureaucrats. Housing subsidies also violate the constitutional prohibitions against redistributionism. The federal government has no constitutional authority to abuse its taxing power to fund programs that reshape the housing market to the liking of politicians and bureaucrats.
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America National Sovereignty vs. UN “International Law” – Time for Congress to Vote
April 29, 2003 2003 Ron Paul 51:1
Mr. Speaker, I rise to urge the leadership of this body to bring a very important vote to the House floor. I recently reintroduced HR 1146, the American Sovereignty Restoration Act, which would end our participation in the United Nations. Millions of Americans have begun to question why we continue to spend $300 million each year funding and housing an organization that is actively hostile to American interests. Surely Congress, which routinely spends 15 minutes renaming post offices, can spare 15 minutes to vote on this fundamental issue of American sovereignty.
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Fannie Mae and Freddie Mac Subsidies Distort the Housing Market
September 10, 2003 2003 Ron Paul 95:2
I hope this committee spends some time examining the special privileges provided to GSEs by the federal government. According to the Congressional Budget Office, the housing-related GSEs received 13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone. Today, I will introduce the Free Housing Market Enhancement Act, which removes government subsidies from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board.
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Fannie Mae and Freddie Mac Subsidies Distort the Housing Market
September 10, 2003 2003 Ron Paul 95:4
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase GSE debt. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.
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Fannie Mae and Freddie Mac Subsidies Distort the Housing Market
September 10, 2003 2003 Ron Paul 95:6
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
housing
Fannie Mae and Freddie Mac Subsidies Distort the Housing Market
September 10, 2003 2003 Ron Paul 95:7
Despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
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Fannie Mae and Freddie Mac Subsidies Distort the Housing Market
September 10, 2003 2003 Ron Paul 95:8
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
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Fannie Mae and Freddie Mac Subsidies Distort the Housing Market
September 10, 2003 2003 Ron Paul 95:10
Mr. Chairman, I would like to once again thank the Financial Services Committee for holding this hearing. I would also like to thank Secretaries Snow and Martinez for their presence here today. I hope today’s hearing sheds light on how special privileges granted to GSEs distort the housing market and endanger American taxpayers. Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market. I therefore hope this committee will soon stand up for American taxpayers and investors by acting on my Free Housing Market Enhancement Act.
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Introducing Free Housing Market Enhancement Act
10 September 2003 2003 Ron Paul 96:1
Mr. PAUL. Mr. Speaker, I rise to introduce the Free Housing Market Enhancement Act. This legislation restores a free market in housing by repealing special privileges for the housing-related government sponsored enterprises (GSE). These entities are the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board. According to the Congressional Budget Office, the housing-related GSEs received 13.6 billion worth of indirect Federal subsidies in Fiscal Year 2000 alone.
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Introducing Free Housing Market Enhancement Act
10 September 2003 2003 Ron Paul 96:3
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase the debt of GSE. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetarize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.
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Introducing Free Housing Market Enhancement Act
10 September 2003 2003 Ron Paul 96:5
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market This is because the special privileges of Fannie and Freddie have distorted the housing marketing by allowing Fannie, Freddie and the home loan bank board to attract capital they could not attract under pure market conditions. As a result, capitol is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
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Introducing Free Housing Market Enhancement Act
10 September 2003 2003 Ron Paul 96:6
Despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially- created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
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Introducing Free Housing Market Enhancement Act
10 September 2003 2003 Ron Paul 96:7
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing the GSE’s debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
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Introducing Free Housing Market Enhancement Act
10 September 2003 2003 Ron Paul 96:9
Mr. Speaker, it is time for Congress to act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market. I therefore hope my colleagues will stand up for American taxpayers and investors by cosponsoring the Free Housing Market Enhancement Act.
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American Dream Downpayment Act
1 October 2003 2003 Ron Paul 104:2
H.R. 1276 not only warps the true meaning of the American dream, but also exceeds Congress’ constitutional boundaries and interferes with and distorts the operation of the free market. Instead of expanding unconstitutional federal power, Congress should focus its energies on dismantling the federal housing bureaucracy so the American people can control housing resources and use the free market to meet their demands for affordable housing.
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American Dream Downpayment Act
1 October 2003 2003 Ron Paul 104:3
As the great economist Ludwig Von Mises pointed out, questions of the proper allocation of resources for housing and other goods should be determined by consumer preference in the free market. Resources removed from the market and distributed according to the preferences of government politician and bureaucrats are not devoted to their highest-valued use. Thus, government interference in the economy results in a loss of economic efficiency and, more importantly, a lower standard of living for all citizens.
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American Dream Downpayment Act
1 October 2003 2003 Ron Paul 104:4
H.R. 1276 takes resources away from private citizens, through confiscatory taxation, and uses them for the politically favored cause of expanding home ownership. Government subsidization of housing leads to an excessive allocation of resources to the housing market. Thus, thanks to government policy, resources that would have been devoted to education, transportation, or some other good desired by consumers, will instead be devoted to housing. Proponents of this bill ignore the socially beneficial uses the monies devoted to housing might have been put to had those resources been left in the hands of private citizens.
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American Dream Downpayment Act
1 October 2003 2003 Ron Paul 104:6
I hope no one confuses my opposition to this bill as opposition to any congressional actions to ensure more Americans have access to affordable housing. After all, one reason many Americans lack affordable housing is because taxes and regulations have made it impossible for builders to provide housing at a price that could be afforded by many lower-income Americans. Therefore, Congress should cut taxes and regulations. A good start would be generous housing tax credits. Congress should also consider tax credits and regulatory relief for developers who provide housing for those with low incomes. For example, I am cosponsoring H.R. 839, the Renewing the Dream Tax Credit Act, which provides a tax credit to developers who construct or rehabilitate low-income housing.
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American Dream Downpayment Act
1 October 2003 2003 Ron Paul 104:7
H.R. 1276 distorts the economy and violates constitutional prohibitions on income redistribution. A better way of guaranteeing an efficient housing market where everyone could meet their own needs for housing would be for Congress to repeal taxes and programs that burden the housing industry and allow housing needs to be met by the free market. Therefore, I urge my colleagues to reject this bill and instead develop housing policies consistent with constitutional principles, the laws of economics, and respect for individual rights.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:6
While the committee’s “Views and Estimates” devote considerable space to discussing Government Sponsored Enterprises (GSEs), it makes no mention of the billions of dollars in subsidies Congress has given to GSEs. These subsidies distort the market, create a short-term boom in housing, and endanger the economy by allowing GSEs to attract capital they could not attract under pure market conditions.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:7
Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, the financial losses suffered by the mortgage debt holders will be greater than they would have been had the government not actively encouraged over-investment in housing.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:10
Instead of reorganizing the deck chairs of the GSEs’ looming fiscal Titanic, the Committee should pass HR 3071, the Free Housing Market Enhancement Act. This act repeals government subsidies for the housing-related GSEs — Fannie Mae, Freddie Mac, and the National Home Loan Bank Board.
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The Financial Services Committees “Views and Estimates for 2005”
February 26, 2004 2004 Ron Paul 7:14
Finally, the committee’s views support expanding the domestic welfare state in the area of housing, despite the fact that federal subsidies distort the housing market by taking capital that could be better used elsewhere and applying it to housing at the direction of politicians and bureaucrats. Housing subsidies also violate the constitutional prohibitions against redistributionism. The federal government has no constitutional authority to abuse its taxing power to fund programs that reshape the housing market to the liking of politicians and bureaucrats.
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Brown v. Board Of Education
13 May 2004 2004 Ron Paul 33:2
The “whereas clauses” of this resolution venture far beyond the basis of Brown and praise various federal legislative acts such as the Fair Housing Act of 1968, the Civil Rights Act of 1964 and the Voting Rights Act of 1965. This final Act was particularly pernicious because it was not applied across the board, but targeted only at certain areas of the country. As such, it violates the spirit of the very equal protection it claims to promote. Moreover, we certainly should ask what constitutional authority lies behind the passage of such legislation.
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American Community Survey
7 July 2004 2004 Ron Paul 45:8
This survey I have got here, here is a copy of it. It is called the American Community Survey. And it says the Census Bureau survey collects information about education, employment, income, housing for the purposes of community uses so that they can do community economic planning.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:13
Both supported expanding entitlements, including programs like the National Endowment for the Arts, medical benefits, and federal housing programs.
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Where To From Here?
November 20, 2004 2004 Ron Paul 81:28
We’re more likely to see entitlements and domestic spending continue to increase. There are zero plans for reigning in the Department of Education, government medical care, farm subsidies, or federal housing programs. Don’t expect the National Endowment for the Arts to be challenged. One can be assured its budget will expand as it has for the last four years, with much of the tax money spent on “arts” ironically being used to attack family values.
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:1
Mr. PAUL. Mr. Chairman, H.R. 1461 fails to address the core problems with the Government Sponsored Enterprises, GSEs. Furthermore, since this legislation creates new government programs that will further artificially increase the demand for housing, H.R. 1461 increases the economic damage that will occur when the housing bubble bursts. The main problem with the GSEs is the special privileges the Federal Government gives the GSEs. According to the Congressional Budget Office, the housing-related GSEs received almost 20 billion dollars worth of indirect federal subsidies in fiscal year 2004 alone.
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:3
This implicit promise by the government to bail out the GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a massive unconstitutional and immoral income transfer from working Americans to holders of GSE debt. This is why I am offering an amendment to cut off this line of credit. I hope my colleagues join me in protecting taxpayers from having to bail out Fannie Mae and Freddie Mac when the housing bubble bursts.
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:12
Ironically, by transferring the risk of widespread mortgage defaults to the taxpayers through government subsidies and convincing investors that all is well because a “world- class” regulator is ensuring the GSEs’ soundness, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie and Freddie have distorted the housing market by allowing Fannie and Freddie to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive uses into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:13
Despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policy of diverting capital into housing creates a short-term boom in housing. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have been had government policy not actively encouraged over-investment in housing.
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:14
H.R. 1461 further distorts the housing market by artificially inflating the demand for housing through the creation of a national housing trust fund. This fund further diverts capital to housing that, absent government intervention, would be put to a use more closely matching the demands of consumers. Thus, this new housing program will reduce efficacy and create yet another unconstitutional redistribution program.
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:15
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing the GSEs’ debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary and painful market corrections will only deepen the inevitable fall. The more people are invested in the market, the greater the effects across the economy when the bubble bursts.
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:16
Instead of addressing government polices encouraging the misallocation of resources to the housing market, H.R. 1461 further introduces distortion into the housing market by expanding the authority of Federal regulators to approve the introduction of new products by the GSEs. Such regulation inevitability delays the introduction of new innovations to the market, or even prevents some potentially valuable products from making it to the market. Of course, these new regulations are justified in part by the GSEs’ government subsidies. We once again see how one bad intervention in the market (the GSEs’ government subsidies) leads to another (the new regulations).
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Government Sponsored Enterprises
26 October 2005 2005 Ron Paul 108:17
In conclusion, H.R. 1461 compounds the problems with the GSEs and may increases the damage that will be inflicted by a bursting of the housing bubble. This is because this bill creates a new unaccountable regulator and introduces further distortions into the housing market via increased regulatory power. H.R. 1461 also violates the Constitution by creating yet another unaccountable regulator with quasi-executive, judicial, and legislative powers. Instead of expanding unconstitutional and market distorting government bureaucracies, Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bailout investors who were misled by foolish government interference in the market.
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Amendment No. 6 Offered By Mr. Paul — Part 1
26 October 2005 2005 Ron Paul 109:5
But what we are doing here today is not addressing the real problem: Why is it out of control? Why is there a financial housing bubble that everybody is afraid is going to undergo a severe correction?
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Amendment No. 6 Offered By Mr. Paul — Part 1
26 October 2005 2005 Ron Paul 109:7
Of course, there are other things that contribute to the housing bubble, something that we cannot deal with today, but the fact that there is easy credit and low interest rates, interest rates below the market level, that is then directed into the housing market. This also contributes to the size and the scope of the borrowing capacity of the GSEs.
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Amendment No. 6 Offered By Mr. Paul — Part 1
26 October 2005 2005 Ron Paul 109:8
Also in this bill, of course, we are adding into this a brand new housing program which is said to probably involve another billion dollars in the next 2 years. I guess it is not surprising when The Wall Street Journal editorializes against this. Unfortunately, they are not very kind. They say this bill is another “Republican policy embarrassment”.
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Amendment No. 6 Offered By Mr. Paul — Part 1
26 October 2005 2005 Ron Paul 109:9
This housing bubble, a housing program that we are starting up, how do we finance it? Well, we tax the GSEs. Instead of arguing the case for the marketplace and letting people earn money legitimately without subsidies, what we do, we keep allowing the system to continue. They do make profits, and then we tax them. We are talking about an additional tax, and this might very well be the reason the administration has come out against this bill, because of this new tax.
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Amendment No. 6 Offered By Mr. Paul — Part 2
26 October 2005 2005 Ron Paul 110:2
If we had a bill that was a little cleaner, we probably would be dealing with the problems we face with the GSEs and we would be dealing with a housing program, a new housing program, probably with a different bill.
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Amendment No. 6 Offered By Mr. Paul — Part 2
26 October 2005 2005 Ron Paul 110:3
I see one attempt is to deal with this problem that we face. Another attempt is we are deciding that we need more money directed into the housing industry, and of course your building friends like this, too. And those are Republican allies as well. The builders love this because we will pump more money into the market so they can make more profits. So it is another government housing project. From a market viewpoint, this is not good because we want the money in the market to be allocated purely by the market and not by government direction.
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Amendment No. 6 Offered By Mr. Paul — Part 2
26 October 2005 2005 Ron Paul 110:7
My argument is if we do not solve the problem of basic underlying inflation distortion of interest rates, allocation of funds through housing programs, as well as this line of credit, believe me, we are not going to solve this problem. Please vote to strike this line of credit to the Treasury.
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Amendment No. 6 Offered By Mr. Paul — Part 2
26 October 2005 2005 Ron Paul 110:8
As it was stated earlier on this floor, we may have some regulations built into this that may even precipitate the puncturing of the housing bubble. That nobody can predict. But without addressing the basic flaw in the system that has created this $5 trillion worth of debt, believe me, we will not have an answer. I urge a “yes” vote on this amendment. The Acting CHAIRMAN (Mr. BISHOP of Utah). The time of the gentleman from Texas has expired. Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 30 seconds. The gentleman’s amendment actually does not go quite far enough, but he has a germaneness problem. What he really wants to do is abolish HUD, given his philosophy. He does not think there should be a Federal housing program. Since he cannot get at HUD, he goes after Fannie and Freddie in ways that would reduce substantially what we do in housing. And, by the way, the administration’s objection to this bill is not, as says the gentleman, that it is too much regulation. It is that we do not give the regulator enough powers. So the administration’s position is somewhat opposite to the gentleman from Texas’, not for the first time, to his credit. Mr. Chairman, I yield 11/2 minutes to the gentlewoman from Florida (Ms. WASSERMAN SCHULTZ).
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The End Of Dollar Hegemony
15 February 2006 2006 Ron Paul 3:38
Price inflation is raising its ugly head, and the NASDAQ bubble, generated by easy money, has burst. The housing bubble likewise created is deflating. Gold prices have doubled, and Federal spending is out of sight, with zero political will to rein it in. The trade deficit last year was over $728 billion. A $2 trillion war is raging, and plans are being laid to expand the war into Iran and possibly Syria. The only restraining force will be the world’s rejection of the dollar. It is bound to come and create conditions worse than 1979–1980, which required 21 percent interest rates to correct. But everything possible will be done to protect the dollar in the meantime. We have a shared interest with those who hold our dollars to keep the whole charade going.
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Iran, The Next Neocon Target
5 April 2006 2006 Ron Paul 21:58
Though many Americans are starting to feel the economic pain of paying for this war through inflation, the real pain has not yet arrived. We generally remain fat and happy with a system of money and borrowing that postpones the day of reckoning. Foreigners, in particular the Chinese and Japanese, gladly participate in the charade. We print the money and they take it, as do the OPEC Nations, and provide us with consumer goods and oil. Then they loan the money back to us at low interest rates, which we use to finance the war and our housing bubble and excessive consumption. This recycling and perpetual borrowing of inflated dollars allow us to avoid the pain of high taxes to pay for our war and welfare spending. It is fine until the music stops and the real costs are realized, with much higher interest rates and significant price inflation. That is when outrage will be heard and the people will realize we cannot afford the humanitarianism of the neo-conservatives.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:33
The Fed tries to keep the consumer spending spree going, not through hard work and savings, but by creating artificial wealth in stock market bubbles and housing bubbles. When these distortions run these courses and are discovered, the corrections will be quite painful as was witnessed with the collapse of the NASDAQ bubble. Likewise a fiat monetary system encourages speculation and unsound borrowing.
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Milton Friedman
6 December 2006 2006 Ron Paul 100:15
“When a young man is forced to serve at $45 a week, including the cost of his keep, of his uniforms, and his dependency allowances, and there are many civilian opportunities available to him at something like $100 a week, he is paying $55 a week in an implicit tax. . . . And if you were to add to those taxes in kind, the costs imposed on universities and colleges; of seating, housing, and entertaining young men who would otherwise be doing productive work; if you were to add to that the costs imposed on industry by the fact that they can only offer young men who are in danger of being drafted stopgap jobs, and cannot effectively invest money in training them; if you were to add to that the costs imposed on individuals of a financial kind by their marrying earlier or having children at an earlier stage, and so on; if you were to add all these up, there is no doubt at all in my mind that the cost of a volunteer force, correctly calculated, would be very much smaller than the amount we are now spending in manning our Armed Forces.”
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:6
Government officials consistently claim that inflation is in check at barely 2%, but middle class Americans know that their purchasing power--especially when it comes to housing, energy, medical care, and school tuition-- is shrinking much faster than 2% each year.
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Shareholder Vote On Executive Compensation Act
18 April 2007 2007 Ron Paul 43:14
Explosions in CEO salaries can be a sign of a Federal credit bubble, which occurs when Federal Reserve Board-created credit flows into certain sectors such as the stock market or the housing market. Far from being a sign of the health of capitalism, excessive CEO salaries in these areas often signal that a bubble is about to burst. When a bubble bursts, people at the bottom of the economic ladder bear the brunt of the bust.
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Federal Housing Finance Reform Act Of 2007
17 May 2007 2007 Ron Paul 52:1
Mr. PAUL. Mr. Chairman, H.R. 1427 fails to address the core problems with the Government Sponsored Enterprises, GSEs. Furthermore, since this legislation creates new government programs that will further artificially increase the demand for housing, H.R. 1427 increases the economic damage that will occur from the bursting of the housing bubble. The main problem with the GSEs is the special privileges the Federal Government gives the GSEs. According to the Congressional Budget Office, the housing-related GSEs received almost 20 billion dollars worth of indirect Federal subsidies in fiscal year 2004 alone, while Wayne Passmore of the Federal Reserve estimates the value of the GSE’s Federal subsides to be between $122 and $182 billion dollars.
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Federal Housing Finance Reform Act Of 2007
17 May 2007 2007 Ron Paul 52:12
Ironically, by transferring the risk of widespread mortgage defaults to the taxpayers through Government subsidies and convincing investors that all is well because a “world- class” regulator is ensuring the GSEs’ soundness, the Government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie and Freddie have distorted the housing market by allowing Fannie and Freddie to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive uses into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
housing
Federal Housing Finance Reform Act Of 2007
17 May 2007 2007 Ron Paul 52:13
Despite the long-term damage to the economy inflicted by the Government’s interference in the housing market, the Government’s policy of diverting capital into housing creates a short-term boom in housing. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have been had government policy not actively encouraged overinvestment in housing.
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Federal Housing Finance Reform Act Of 2007
17 May 2007 2007 Ron Paul 52:14
H.R. 1427 further distorts the housing market by artificially inflating the demand for housing through the creation of a national housing trust fund. This fund further diverts capital to housing that, absent Government intervention, would be put to a use more closely matching the demands of consumers. Thus, this new housing program will reduce efficacy and create yet another unconstitutional redistribution program.
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Federal Housing Finance Reform Act Of 2007
17 May 2007 2007 Ron Paul 52:15
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing the GSEs’ debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary and painful market corrections will only deepen the inevitable fall. The more people are invested in the market, the greater the effects across the economy when the bubble bursts.
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Federal Housing Finance Reform Act Of 2007
17 May 2007 2007 Ron Paul 52:16
Instead of addressing Government polices encouraging the misallocation of resources to the housing market, H.R. 1427 further introduces distortion into the housing market by expanding the authority of Federal regulators to approve the introduction of new products by the GSEs. Such regulation inevitability delays the introduction of new innovations to the market, or even prevents some potentially valuable products from making it to the market. Of course, these new regulations are justified in part by the GSEs’ government subsidies. We once again see how one bad intervention in the market (the GSEs’ government subsides) leads to another (the new regulations).
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Federal Housing Finance Reform Act Of 2007
17 May 2007 2007 Ron Paul 52:17
In conclusion, H.R. 1427 compounds the problems with the GSEs and may increase the damage that will be inflicted by a bursting of the housing bubble. This is because this bill creates a new unaccountable regulator and introduces further distortions into the housing market via increased regulatory power. H.R. 1427 also violates the Constitution by creating yet another unaccountable regulator with quasi-executive, judicial, and legislative powers. Instead of expanding unconstitutional and market distorting government bureaucracies, Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bailout investors who were misled by foolish Government interference in the market.
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Opening Statement Committee on Financial Services Paulson Hearing
20 June 2007 2007 Ron Paul 71:4
The shake up in the sub prime mortgage market which is now spreading, as the housing bubble deflates, has a long way to go. The same problem exists in the high-yield corporate debt market and will surely add to the economic uncertainty we now face. It’s deceptive to merely blame “abusive lending practices” for these problems.
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Statement before the Financial Services Committee
20 September 2007 2007 Ron Paul 93:2
As with asset bubbles and investment manias in past history, the fuel for the current housing bubble had its origins in monetary manipulation. The housing boom was caused by the Federal Reserve's policy resulting in artificially low interest rates. Consumers, misled by low interest rates, were looking to consume, while homebuilders saw the low interest rates as a signal to build, and build they did.
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Statement before the Financial Services Committee
20 September 2007 2007 Ron Paul 93:6
Millions of Americans now find themselves stuck in a financial quandary that is not their fault. The result of manipulation of the interest rate, money supply, and mortgage markets are the recently popped housing bubble.
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House Financial Services Committee – Subcommittee on Domestic and International Monetary Policy
17 October 2007 2007 Ron Paul 99:3
While I empathize with the investors who have lost money through the Yukos incident, the fact remains that markets are fraught with risk. Our loose monetary policy and stimulation of credit have led to expectations of permanent positive economic growth. The technology bubble and the housing bubble have caused many to believe that markets can only go up. When bubbles burst, when stocks decline, something must have gone awry, and the government is called upon to right the wrong.
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House Financial Services Committee – Subcommittee on Domestic and International Monetary Policy
17 October 2007 2007 Ron Paul 99:5
Neither a bailout, as in the case of the housing bubble, nor attempted government pressure on a foreign government, as in the case of Yukos, are appropriate reactions to the losses of investors. I wish the investors affected in the Yukos incident well, but urge my colleagues to resist the temptation to intervene in Russia's internal affairs.
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Statement Before the Joint Economic Committee
8 November 2007 2007 Ron Paul 103:2
The collapse of the housing market has served as a catalyst for the economy's latest bust. For years the federal government has made it one of its prime aims to encourage homeownership among people who otherwise would not be able to afford homes. Various federal mortgage programs through the FHA, Fannie Mae, and Freddie Mac have distorted the normal workings of the housing market.
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Statement Before the Joint Economic Committee
8 November 2007 2007 Ron Paul 103:3
The implicit government backing of Fannie Mae and Freddie Mac provides investors an incentive to provide funds to Fannie and Freddie that otherwise would have been put to use in other sectors of the economy. It was this flood of investor capital that helped to fuel the housing bubble.
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Statement Before the Joint Economic Committee
8 November 2007 2007 Ron Paul 103:6
Finally, the Federal Reserve's loose monetary policy and lowering of interest rates were a major spur to the housing boom. Low interest rates influence marginal buyers, those who are sitting on the fence, and encourage them to take on a mortgage that they otherwise would not. Even when interest rates are raised, no one expects them to stay high for long, as there is always pressure from politicians and investors to keep rates low, as no one wants the cheap credit to end.
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Statement Before the Joint Economic Committee
8 November 2007 2007 Ron Paul 103:8
It is time that the federal government get out of the housing business. Through our interventionist legislation we have caused the boom and bust, and any attempts at reform that fail to address the causes of our current problem will only sow the seeds for the next b
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Statement of Ron Paul on H.R. 5140
29 January 2008 2008 Ron Paul 2:1
Madame Speaker, I find it odd that HR 5140, a bill allegedly designed to provide a stimulus for the anemic American economy, contains provisions that could damage the economy and hurt American taxpayers. Specifically, the provisions increasing the loan limitations of the Federal Housing Administration and the Government Sponsored Enterprises (e.g. Fannie Mae and Freddie Mac), will exacerbate the long-term problems in the housing market, and may even lead to a future taxpayer bailout of the housing industry. The recent bursting of the housing bubble should have taught my colleagues the dangers of government polices that distort the market by diverting resources to housing, when those resources would be more efficiently used in other sectors of the economy.
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Statement of Ron Paul on H.R. 5140
29 January 2008 2008 Ron Paul 2:10
In conclusion, Madame Speaker, HR 5140 does not provide the kind of permanent, deep tax relief that will protect long-term economic growth, and will actually compound the damage Congress has already done to the housing market. Instead of pretending that we are addressing America’s economic problems via temporary tax cuts, Congress should address the fundamental problems of the American economy by pursing serious monetary reform, spending cuts, and regulatory reform. Congress should also provide real long-term tax relief to the American people by passing legislation such as HR 5109 and HR 3664.
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“Monetary Policy and the State of the Economy”
February 27, 2008 2008 Ron Paul 9:4
Some drastic proposals have called for the federal government to purchase existing mortgages and take upon itself the process of rewriting these and guaranteeing the resulting new mortgages. Aside from exposing the government to tens of billions of dollars of potentially defaulting mortgages, the burden of which will ultimately fall on the taxpayers, this type of plan would embed the federal government even deeper into the housing market and perpetuate instability. The Congress has, over the past decades, relentlessly pushed for increased rates of homeownership among people who have always been viewed by the market as poor credit risks. Various means and incentives have been used by the government, but behind all the actions of lenders has been an implicit belief in a federal bailout in the event of a crisis.
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Statement: “Something Big is Happening”
9 July 2008 2008 Ron Paul 42:10
The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical-care costs; the collapse of the housing bubble; the bursting of the NASDAQ bubble; stock markets plunging; unemployment rising; massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we’ll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression?
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Humphrey Hawkins Hearing on Monetary Policy
July 16, 2008 2008 Ron Paul 46:2
The two GSE’s have been disasters waiting to happen, as I and many others have warned over the years. It was bad enough that Fannie and Freddie were able to operate with significant advantages, such as lower borrowing costs and designation of their debt as government debt. Now, the implicit government backstop has turned out to be an explicit backstop, just as we feared. The Greenspan reflation of the economy after the dot-com bust pumped additional liquidity into an already-skewed housing market, leading to an unsustainable boom that from many accounts has only begun to unravel. With a current federal funds rate of two percent, and inflation at over four percent, the Fed is currently sowing the seeds for another economic bubble.
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Statement on HR 3221
July 24, 2008 2008 Ron Paul 48:1
Madam Speaker, For several years, followers of the Austrian school of economics have warned that unless Congress moved to end the implicit government guarantee of Fannie Mae and Freddie Mac, and took other steps to disengage the US Government from the housing market, America would face a crisis in housing. This crisis would force Congress to chose between authorizing a taxpayer bailout of Fannie and Freddie, and other measures increasing government’s involvement in housing, or restoring a free-market in housing by ending government support for Fannie and Freddie and repealing all laws that interfere in housing. The bursting of the housing bubble, and the recent near-collapse in investor support for Fannie and Freddie has proven my fellow Austrians correct. Unfortunately, but not surprisingly, instead of ending the prior interventions in the housing market that are responsible for the current crisis, Congress is increasing the level of government intervention in the housing market. This is the equivalent of giving a drug addict another fix, which will only make the necessary withdrawal more painful.
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Statement on HR 3221
July 24, 2008 2008 Ron Paul 48:5
Finally, HR 3221 increases the federal debt limit by $800 billion. We are told that CBO has scored this bill at a cost of $25 billion, but this debt limit increase belies that. The Federal Reserve has already propped up the housing and financial markets to the tune of over $300 billion, and this raise of the debt limit indicates that the cost of this newest bailout will likely be even more costly. I am dismayed that my colleagues have not learned the lessons of the Patriot Act and Sarbanes-Oxley. Massive bills passed in knee-jerk reaction to crisis events will always be poorly written, burdensome and expensive to taxpayers, and destructive of liberty.
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Full Committee Hearing on “Implications of a Weaker Dollar for Oil Prices and the U.S. Economy”
July 24, 2008 2008 Ron Paul 50:2
The root of our current economic malaise, the weak dollar, the high price of oil, and the collapse of the housing market, comes about because almost no one understands what inflation is. Inflation is an increase in the money supply, which occurs by various methods, the printing of currency, low reserve requirements, Federal Reserve open market operations, etc.
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HOUSING AND ECONOMIC RECOVERY ACT OF 2008
25 July 2008 2008 Ron Paul 52:1
Mr. PAUL. Mr. Speaker, for several years, followers of the Austrian school of economics have warned that unless Congress moved to end the implicit Government guarantee of Fannie Mae and Freddie Mac, and took other steps to disengage the U.S. Government from the housing market, America would face a crisis in housing. This crisis would force Congress to chose between authorizing a taxpayer bailout of Fannie and Freddie, and other measures increasing Government’s involvement in housing, or restoring a free market in housing by ending Government support for Fannie and Freddie and repealing all laws that interfere in housing. The bursting of the housing bubble, and the recent near-collapse in investor support for Fannie and Freddie has proven my fellow Austrians correct. Unfortunately, but not surprisingly, instead of ending the prior interventions in the housing market that are responsible for the current crisis, Congress is increasing the level of Government intervention in the housing market. This is the equivalent of giving a drug addict another fix, which will only make the necessary withdrawal more painful.
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HOUSING AND ECONOMIC RECOVERY ACT OF 2008
25 July 2008 2008 Ron Paul 52:5
Finally, H.R. 3221 increases the Federal debt limit by $800 billion. We are told that CBO has scored this bill at a cost of $25 billion, but this debt limit increase belies that. The Federal Reserve has already propped up the housing and financial markets to the tune of over $300 billion, and this raise of the debt limit indicates that the cost of this newest bailout will likely be even more costly. I am dismayed that my colleagues have not learned the lessons of the PATRIOT Act and Sarbanes- Oxley. Massive bills passed in knee- jerk reaction to crisis events will always be poorly written, burdensome and expensive to taxpayers, and destructive of liberty.
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“The Economic Outlook”
September 24, 2008 2008 Ron Paul 60:5
The housing bubble has burst, unemployment is on the rise, and the dollar weakens every day. Unfortunately our leaders have failed to learn from the mistakes of previous generations and continue to lead us down the road toward economic ruin.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:9
The difficulties in our economy will continue because the legislative and the executive branches have not yet begun to address the real problems. The housing bubble’s collapse, as was the dot corn bubble’s collapse, was predictable and is merely a symptom of the monetary system that brought us to this point.
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“The Bailout”
September 29, 2008 2008 Ron Paul 65:15
But what politicians are willing to say that the financial “skyscraper”—the global financial and monetary system-is a house of cards. It is not going to happen at this juncture. They’re not even talking about this. They talk only of bailouts, more monetary inflation, more special interest spending, more debt, and more regulations. There is almost no talk of the relationship of the Community Reinvestment Act, HUD, and government assisted loans to the housing bubble. And there is no talk of the oversight that is desperately needed for the Federal Reserve, the Exchange Stabilization Fund, and all the activities of the President’s Working Group on financial markets. When these actions are taken we will at last know that Congress is serious about the reforms that are really needed.
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Statement on HR 1424
October 3, 2008 2008 Ron Paul 67:6
As usual, Congress has show itself to be reactive rather than proactive. For years, many people have been warning about the housing bubble and the inevitable bust. Congress ignored the impending storm, and responded to this crisis with a poorly thought-out piece of legislation that will only further harm the economy. We ought to be ashamed.
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Bailout
January 14, 2009 2009 Ron Paul 8:7
That contributes to what we call “moral hazard” as well as the system of the Fannie Mae and Freddie Mac system. It always had a line of credit. It never had to use it, but the assumption was, if we ever got into any trouble, the Treasury would be there, and the Federal Reserve would back them up. That existed for a long time, causing specifically the housing bubble to develop.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:2
From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts.
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TRANSPARENCY AT THE FEDERAL RESERVE
December 1, 2009 2009 Ron Paul 100:3
Since the Fed is the source of all economic downturns, it’s impossible for any central banker to regulate in such a manner to prevent the problems that are predictable consequences of his own monetary management. The Federal Reserve fixes interest rates at levels inevitably lower than those demanded by the market. This manipulation is a form of price control through credit expansion, and is the ultimate cause of business cycles and so many of our economic problems, generating the mal- investment, excessive debt, stock, bond, commodity, and housing bubbles.
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Block grants are not the answer
09 March 1998 Texas Straight Talk 09 March 1998 verse 5 ... Cached
Recent legislation marking the first major change to public housing since the Depression, did not cut spending, but actually increased funding paid for with federal taxes, even while holding out that the block grant system was devolving power to the States. A token effort similar to this was made in the early 1970s under Nixon called "revenue-sharing." It did not work and was dropped.
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Block grants are not the answer
09 March 1998 Texas Straight Talk 09 March 1998 verse 6 ... Cached
This new method will not work either. Whether the bureaucrats are in Washington or in the state capitols, it will not change the dynamics of public housing. Public ownership, whether managed locally or federally, cannot replace the benefits of private ownership.
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Block grants are not the answer
09 March 1998 Texas Straight Talk 09 March 1998 verse 8 ... Cached
And of course, strings will always be attached, no matter how many safeguards are written into the block-grant law. The process of devolution is an adjustment in management and does not deal with the philosophic question of whether or not the federal government - or even the state governments, for that matter - ought to be involved in providing housing.
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Congressional action weakens national defense
06 April 1998 Texas Straight Talk 06 April 1998 verse 4 ... Cached
Last week Congress passed more legislation which weakens our national defense and further funds the unconstitutional, fiscally irresponsible and dangerous practice of policing the world. And it was all done at the expense of America's airports and public housing.
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Inconsistency must be addressed
14 September 1998 Texas Straight Talk 14 September 1998 verse 5 ... Cached
In perhaps no situation is that more apparent than our policies regarding narcotics trafficking and use, and federal housing.
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Inconsistency must be addressed
14 September 1998 Texas Straight Talk 14 September 1998 verse 8 ... Cached
When the federal government began the "housing" programs, it was with the intention of providing adequate shelter to low-income families. Today, federal housing projects are among the most dangerous sections of a town, and are rapidly becoming little more than shelters for scurrilous behavior.
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Inconsistency must be addressed
14 September 1998 Texas Straight Talk 14 September 1998 verse 11 ... Cached
This must change. And so this past week I introduced legislation (HR4551) in the House of Representatives - mirroring similar provisions introduced in the Senate by Senator John Ashcroft of Missouri - that would prohibit anyone from living in federal housing who has been convicted of drug charges.
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Inconsistency must be addressed
14 September 1998 Texas Straight Talk 14 September 1998 verse 13 ... Cached
And one thing is clear: those who would violate our communities' laws should not expect to be subsidized by federal tax dollars. No matter what some bleeding hearts may say, public housing is a privilege provided by the taxpayers, not a right.
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Wrong debate in House 'leadership' race
16 November 1998 Texas Straight Talk 16 November 1998 verse 12 ... Cached
Both parties, unfortunately, endorse the use of government force to police the world, to redistribute wealth domestically and internationally, and to manipulate money and credit. Both allow government to invade our privacy as a trade-off for the government financing of education, medical care, and housing, arguing such invasion is necessary to run the system efficiently, and prevent waste and fraud. In the name of "public safety," neither party resists the federal government’s takeover of local law enforcement.
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The Danger of Military Foreign Aid to Colombia
11 September 2000 Texas Straight Talk 11 September 2000 verse 7 ... Cached
The American people do not support our actions in Colombia. Polls have shown that approximately 70% of Americans do not support defending foreign countries if U.S. soldiers are put in jeopardy. Our primary concern in military affairs should be maintaining a strong national defense and protecting our national security interests. Our actions in Colombia have nothing to with our national defense, and they undermine our national security by creating resentment from factions we do not support. We must remember that money spent in Colombia necessarily reduces spending on a variety of more important issues. We should build up our military, providing our soldiers with better salaries, housing, and medical care. Similarly, foreign aid dollars could be spent on education, Social Security, or Medicare. My constituents do not support our dangerous and expensive involvement in Colombia, and I intend to continue working to eliminate wasteful foreign aid in our next budget.
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Economic Woes and the Federal Reserve
19 March 2001 Texas Straight Talk 19 March 2001 verse 8 ... Cached
Second, the Fed also steadily increased the monetary supply throughout the 1990s by printing money. Recent Fed numbers show yearly increases of nearly 15% in the M2 money supply. Since 1996, the Fed has poured more than $100 billion in new dollars into the U.S. economy. These new dollars may make Americans feel richer, but the net result of monetary inflation has to be the devaluation of savings and purchasing power. Prices seemed stable over the last decade, but many types of inflation were not reported as such. An obvious example is stock prices, where companies making little or no profit often sold shares at ridiculous price/earnings ratios. Housing and energy prices also rose dramatically, and wholesale price inflation is an increasing threat. So while monetary inflation creates a sense of prosperity in the short run, long-term it simply makes your dollars worth less.
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Legislation for our Military Families and Veterans
21 October 2002 Texas Straight Talk 21 October 2002 verse 2 ... Cached
With thousands of our troops now deployed in Afghanistan, and thousands more probably headed to Iraq, it is important to remember the sacrifices made by our military families. Congress should do everything possible to make sure our soldiers and our veterans receive adequate pay, housing, health care, tax relief, and disability benefits.
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Federal Reserve Inflation Punishes Saving
21 July 2003 Texas Straight Talk 21 July 2003 verse 3 ... Cached
Throughout Greenspan’s tenure, we’ve been told that inflation is either nonexistent or very much in check. The Treasury department assures us that consumer prices, measured by the consumer price index (CPI), are under control. But inflation is much greater than the government admits. The CPI excludes housing prices, among other things. Everyone knows that housing prices have risen dramatically over the last decade in most parts of the country, with rents following closely behind. So the single biggest expense for most Americans- their mortgage or rent payment- certainly has inflated! The price of many other goods and services, including medical care and energy, also has risen substantially.
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Federal Reserve Inflation Punishes Saving
21 July 2003 Texas Straight Talk 21 July 2003 verse 8 ... Cached
Yet even as the Chairman warned about the supposed danger of deflation, he also discussed his view that rising natural gas prices pose a serious threat to the U.S. economy. There seems to be no coherent message coming from Mr. Greenspan: we’re warned about “irrational exuberance” even as the Fed cuts interest rates and wildly inflates the money supply; we’re told there is no inflation, yet housing prices skyrocket; we’re told that only our central bank planners have the wisdom to determine proper monetary policies, yet the Chairman himself seems to equivocate constantly and provide only the fuzziest answers to straightforward questions.
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Your Money in Iraq
29 September 2003 Texas Straight Talk 29 September 2003 verse 6 ... Cached
-$100 million for several new housing communities, complete with roads, schools, and a medical clinic;
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Your Money in Iraq
29 September 2003 Texas Straight Talk 29 September 2003 verse 17 ... Cached
We have embarked on probably the most extensive nation-building experiment in history. Our provisional authority seeks nothing less than to rebuild Iraq’s judicial system, financial system, legal system, transportation system, and political system from the top down- all with hundreds of billion of US tax dollars. We will all pay to provide job-training for Iraqis, while more and more Americans find themselves out of work. We will pay to secure the Iraqi borders, while our own borders remain porous and vulnerable. We will pay for housing, health care, social services, utilities, roads, schools, jails, and food in Iraq, leaving American taxpayers with less money to provide these things for themselves at home. We will saddle future generations with billions in government debt. The question of whether Iraq is worth this much to us is one lawmakers should answer now by refusing to approve another nickel for nation building.
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Amnesty and Culture
12 January 2004 Texas Straight Talk 12 January 2004 verse 4 ... Cached
The immigration problem fundamentally is a welfare state problem. Some illegal immigrants-- certainly not all-- receive housing subsidies, food stamps, free medical care, and other forms of welfare. This alienates taxpayers and breeds suspicion of immigrants, even though the majority of them work very hard. Without a welfare state, we would know that everyone coming to America wanted to work hard and support himself. Since we have accepted a permanent welfare state, however, we cannot be surprised when some freeloaders and criminals are attracted to our shores. Welfare muddies the question of why immigrants want to come here.
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Inflation- Alive and Well
08 March 2004 Texas Straight Talk 08 March 2004 verse 6 ... Cached
The Treasury department parrots the Fed line that consumer prices, as measured by the consumer price index (CPI), are under control. But even some Keynesian economists admit that CPI grossly understates true inflation. The most glaring problem is that CPI excludes housing prices, instead tracking rents. The Fed’s easy credit policies have created an artificial mortgage boom, enabling many Americans who would not have met credit standards 30 years ago to buy houses. So demand for rentals has diminished, causing rental housing prices to drop and distorting the CPI downward. However, everyone knows the cost of purchasing a home has increased dramatically in the last ten years. Home prices in many regions have more than doubled in just five years. So price inflation certainly is alive and well when to comes to the largest purchase most Americans make.
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Zero Down for the American Dream
21 June 2004 Texas Straight Talk 21 June 2004 verse 6 ... Cached
But as with all federal intervention in the economy, housing welfare distorts the mortgage industry and makes ordinary Americans poorer. Banks, of course, love federal mortgage programs- after all, the risk of default is transferred to American taxpayers. The lending mortgage banks get paid whether homebuyers default or not, and what business wouldn’t love having the federal government guarantee the profitability of its ventures? Between the Federal Housing Administration, which is the largest insurer of mortgages in the world, and the government-created Fannie Mae and Freddie Mac corporations, the mortgage market is hopelessly distorted. Millions of mortgages in this country are federally insured, and the tax bill for defaults could be astronomical if the housing bubble bursts.
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Zero Down for the American Dream
21 June 2004 Texas Straight Talk 21 June 2004 verse 7 ... Cached
Despite the congressional rhetoric about helping the poor, federal housing policies often harm poor people by pushing them into houses they may not be ready to buy. Given the realities of insurance, property taxes, maintenance, and repairs, many low-income buyers lose their homes and destroy their credit ratings. Easy credit and low interest rates, courtesy of the Federal Reserve, have dramatically increased housing demand and artificially increased prices. Zero down payment schemes do the same thing by pushing renters into the housing market. This increased demand actually serves to price many poor Americans out of the housing market indefinitely.
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What does Freedom Really Mean?
07 February 2005 Texas Straight Talk 07 February 2005 verse 10 ... Cached
The political left equates freedom with liberation from material wants, always via a large and benevolent government that exists to create equality on earth. To modern liberals, men are free only when the laws of economics and scarcity are suspended, the landlord is rebuffed, the doctor presents no bill, and groceries are given away. But philosopher Ayn Rand (and many others before her) demolished this argument by explaining how such “freedom” for some is possible only when government takes freedoms away from others. In other words, government claims on the lives and property of those who are expected to provide housing, medical care, food, etc. for others are coercive-- and thus incompatible with freedom. “Liberalism,” which once stood for civil, political, and economic liberties, has become a synonym for omnipotent coercive government.
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The Maestro Changes his Tune
21 February 2005 Texas Straight Talk 21 February 2005 verse 7 ... Cached
Second, inflation is a much greater problem than the federal government admits. Health care, housing, and energy are three areas where costs have risen dramatically. The producer price index is rising at the fastest rate in seven years. Bond prices are rising. To suggest that rapid expansion of the money supply and artificially low interest rates do not ultimately cause price inflation is absurd.
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Immigration and the Welfare State
08 August 2005 Texas Straight Talk 08 August 2005 verse 6 ... Cached
We must end welfare state subsidies for illegal immigrants. Some illegal immigrants-- certainly not all-- receive housing subsidies, food stamps, free medical care, and other forms of welfare. This alienates taxpayers and breeds suspicion of immigrants, even though the majority of them work very hard. Without a welfare state, we would know that everyone coming to America wanted to work hard and support himself.
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Hey, Big Spender
29 August 2005 Texas Straight Talk 29 August 2005 verse 8 ... Cached
What programs can we cut? What agencies and departments should go? A better question is: What should stay on a permanent basis? That's easy: only those functions specifically outlined in the Constitution. Is foreign aid allowed by the Constitution? No. Is public housing in the Constitution? No. Is federal involvement in education? No. Are the EPA, OSHA, and the BATF? No. Is protecting our borders? Yes.
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Empowering the UN in the Guise of Reform
03 October 2005 Texas Straight Talk 03 October 2005 verse 6 ... Cached
The misnamed “Democracy Fund” created at the World Forum may well provide the funding for this UN army. We must ask ourselves whether this “global democracy fund” will be used to undermine or overthrow elected governments that do not meet some UN-created democratic criteria. Will it be used to further the kinds of color-coded revolutions we have seen from East Europe to the Middle East, which far from being genuine expressions of popular will are in fact fomented with outside money and influence? Could it eventually be used against the United States? What if the US is determined lacking when it comes to UN-defined democratic responsibilities such as providing free public housing or universal healthcare?
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More of the Same at the Federal Reserve
28 November 2005 Texas Straight Talk 28 November 2005 verse 7 ... Cached
Inflation is not in check, as anyone who examines the cost of housing, energy, medical care, school tuition, and other basics can attest. In one sense the remarkable rise in housing prices over the last decade really just represents a drop in the value of the dollar. The artificial boom in the 1990s equity markets, engineered by Mr. Greenspan's relentless monetary expansion and interest rate cutting, ended badly for millions of Americans holding overinflated stocks. What will happen when the same thing happens with housing?
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Don't Complicate Immigration Reform
12 December 2005 Texas Straight Talk 12 December 2005 verse 9 ... Cached
Finally, we must end welfare state subsidies for illegal immigrants. Some illegal immigrants-- certainly not all-- receive housing subsidies, food stamps, free medical care, and other forms of welfare. This alienates taxpayers and breeds suspicion of immigrants, even though the majority of them work very hard. Without a welfare state, we would know that everyone coming to America wanted to work hard and support himself.
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The Real Washington Scandal
06 February 2006 Texas Straight Talk 06 February 2006 verse 6 ... Cached
The simplest way for the Fed to overcome these fears and maintain worldwide enthusiasm for the dollar is to raise interest rates and stop putting new dollars into circulation. But the Greenspan "boom" was based on the opposite approach. By cutting interest rates to the bone and vastly increasing the money supply, Greenspan made Americans feel rich-- first with the stock market bubble of the 1990s, and later with the housing bubble that is only now starting to burst. Greenspan was brilliant at making debt feel like wealth, but Mr. Bernanke inherits a very difficult situation. To maintain the value of the dollar, he must put the brakes on the money supply and raise the cost of borrowing. Such tough action is unlikely, however, given Mr. Bernanke's troubling public statements about the benefits of government printing presses.
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Katrina Relief Six Months Later
20 February 2006 Texas Straight Talk 20 February 2006 verse 5 ... Cached
FEMA spent millions on unusable temporary housing that did not meet FEMA’s own regulations for placement in flood zones. $2000 debit cards were issued to nonexistent people; some cards were used for everything from tattoos to bail bonds. Emergency relief checks were issued to nearly one million bogus applicants. Some evacuees were housed in $400 per night hotel suites. The list goes on and on.
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Federal Reserve Policy Destroys the Value of Your Savings
10 July 2006 Texas Straight Talk 10 July 2006 verse 3 ... Cached
For years officials at the Federal Reserve Bank, including Chairman Bernanke himself, have assured us that inflation is under control and not a problem-- even as the price of housing, energy, medical care, school tuition, gold, and other commodities skyrockets.
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Federal Reserve Policy Destroys the Value of Your Savings
10 July 2006 Texas Straight Talk 10 July 2006 verse 4 ... Cached
The Treasury department parrots the Fed line that consumer prices, as measured by the consumer price index (CPI), are under control. But even many mainstream economists now admit that CPI grossly understates true inflation. The most glaring problem is that CPI excludes housing prices, instead tracking rents. Everyone knows the cost of purchasing a home has increased dramatically in the last ten years; in many regions housing prices have more than doubled in just five years. So price inflation certainly is alive and well when to comes to the largest purchase most Americans make.
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The Threat of Rising Property Taxes
07 August 2006 Texas Straight Talk 07 August 2006 verse 3 ... Cached
In recent weeks I’ve written about how inflation is alive and well, especially when it comes to the cost of housing, energy, gas, and education. But perhaps the most worrisome type of inflation comes in the form of steadily rising property taxes.
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Amnesty and the Welfare State
18 September 2006 Texas Straight Talk 18 September 2006 verse 7 ... Cached
The immigration problem fundamentally is a welfare state problem. Some illegal immigrants-- certainly not all-- receive housing subsidies, food stamps, free medical care, and other forms of welfare. This alienates taxpayers and breeds suspicion of immigrants, even though the majority of them work very hard. Without a welfare state, we would know that everyone coming to America wanted to work hard and support himself. Since we have accepted a permanent welfare state, however, we cannot be surprised when some freeloaders and criminals are attracted to our shores. Welfare muddies the question of why immigrants want to come here.
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Rethinking Birthright Citizenship
02 October 2006 Texas Straight Talk 02 October 2006 verse 8 ... Cached
Hospitals bear the costs when illegal immigrants enter the country for the express purpose of giving birth. But illegal immigrants also use emergency rooms, public roads, and public schools. In many cases they are able to obtain Medicaid, food stamps, public housing, and even unemployment benefits. Some have fraudulently collected Social Security benefits.
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Another Spending Bill for the War in Iraq
12 February 2007 Texas Straight Talk 12 February 2007 verse 9 ... Cached
We have embarked on the most expensive nation-building experiment in history. We seek nothing less than to rebuild Iraq’s judicial system, financial system, legal system, transportation system, and political system from the top down-- all with hundreds of billion of US tax dollars. We will pay to provide job training for Iraqis; we will pay to secure Iraq’s borders; we will pay for housing, health care, social services, utilities, roads, schools, jails, and food in Iraq. In doing so, we will saddle future generations of Americans with billions in government debt. The question of whether Iraq is worth this much to us is one Congress should answer now-- by refusing another nickel for supplemental spending bills.
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Monetary Policy is Critically Important
19 February 2007 Texas Straight Talk 19 February 2007 verse 9 ... Cached
Government officials consistently claim that inflation is in check at barely 2%, but middle class Americans know that their purchasing power--especially when it comes to housing, energy, medical care, and school tuition-- is shrinking much faster than 2% each year.
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Don't Blame the Market for Housing Bubble
19 March 2007 Texas Straight Talk 19 March 2007 verse 1 ... Cached
Don't Blame the Market for Housing Bubble
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Don't Blame the Market for Housing Bubble
19 March 2007 Texas Straight Talk 19 March 2007 verse 3 ... Cached
The U.S. housing market, long considered vulnerable by many economists, is now on the verge of suffering a serious collapse in many regions. Commodities guru and hedge fund manager Jim Rogers warns that real estate in expensive bubble areas will drop 40 or 50%. Mainstream media outlets like the New York Times are reporting breathlessly about the possibility of widespread defaults on subprime mortgages.
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Don't Blame the Market for Housing Bubble
19 March 2007 Texas Straight Talk 19 March 2007 verse 5 ... Cached
But capitalism is not to blame for the housing bubble, the Federal Reserve is. Specifically, Fed intervention in the economy-- through the manipulation of interest rates and the creation of money-- caused the artificial boom in mortgage lending.
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Don't Blame the Market for Housing Bubble
19 March 2007 Texas Straight Talk 19 March 2007 verse 6 ... Cached
The Fed has roughly tripled the amount of dollars and credit in circulation just since 1990. Housing prices have risen dramatically not because of simple supply and demand, but because the Fed literally created demand by making the cost of borrowing money artificially cheap. When credit is cheap, individuals tend to borrow too much and spend recklessly.
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Don't Blame the Market for Housing Bubble
19 March 2007 Texas Straight Talk 19 March 2007 verse 8 ... Cached
The actions of lenders are directly attributable to the policies of the Fed: when credit is cheap, why not loan money more recklessly to individuals who normally would not qualify? Even with higher default rates, lenders could make huge profits simply through volume. Subprime lending is a symptom of the housing bubble, not the cause of it.
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Don't Blame the Market for Housing Bubble
19 March 2007 Texas Straight Talk 19 March 2007 verse 9 ... Cached
Fed credit also distorts mortgage lending through Fannie Mae and Freddie Mac, two government schemes created by Congress supposedly to help poor people. Fannie and Freddie enjoy an implicit guarantee of a bailout by the federal government if their loans default, and thus are insulated from market forces. This insulation spurred investors to make funds available to Fannie and Freddie that otherwise would have been invested in other securities or more productive endeavors, thereby fueling the housing boom.
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Don't Blame the Market for Housing Bubble
19 March 2007 Texas Straight Talk 19 March 2007 verse 10 ... Cached
The Federal Reserve provides the mother’s milk for the booms and busts wrongly associated with a mythical “business cycle.” Imagine a Brinks truck driving down a busy street with the doors wide open, and money flying out everywhere, and you’ll have a pretty good analogy for Fed policies over the last two decades. Unless and until we get the Federal Reserve out of the business of creating money at will and setting interest rates, we will remain vulnerable to market bubbles and painful corrections. If housing prices plummet and millions of Americans find themselves owing more than their homes are worth, the blame lies squarely with Alan Greenspan and Ben Bernanke.
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Legislative Forecast for 2008
13 January 2008 Texas Straight Talk 13 January 2008 verse 4 ... Cached
This leads me to my next forecast of more federal bailouts for the housing sector. Efforts by the Federal Reserve to stave off recession will have the net effect of only blowing the bubble bigger, making the crash that much more painful when it inevitably comes. The malinvestments caused by easy credit in the housing industry will be prolonged by more easy credit. New programs and laws will be enacted to prop up housing, all with a falling dollar, devalued by continued foreign interventions. The crisis in the housing market will spread and I’m afraid we are in for some rough economic times.
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Hope for the Economy
02 March 2008 Texas Straight Talk 02 March 2008 verse 2 ... Cached
It is becoming harder and harder for Washington and the mainstream media to ignore the ripple effect the collapse of the housing bubble is having on the economy. Inflation is up, cost of food is up, oil and gold are up, foreclosures are up, unemployment is up, government spending is at record highs, its seems that the only thing down is the value of the dollar. The middle and lower classes are getting squeezed as prices jump and wages stay flat.
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Hope for the Economy
02 March 2008 Texas Straight Talk 02 March 2008 verse 4 ... Cached
What the government needs to stop doing is taxing Americans literally out of house and home in the wake of the housing debacle. We should not take money from taxpayers to bail out bad businesses. At the same time, we need to make sure that America can get back to work by easing taxes and regulations on good businesses and allow them to function and prosper. Also there a lot of tax cuts and tax reforms we could be making to ease the burden on the American people.
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On Money, Inflation and Government
30 March 2008 Texas Straight Talk 30 March 2008 verse 4 ... Cached
You see, the Fed creates new money and uses it to purchase securities from banks. Flush with funds, these banks seek to put this money to use. During the Fed's expansionary period, much of this money went to home loans. Through a combination of federal government inducements to lend to risky borrowers, and the Fed's supply of easy money, the housing bubble took shape. Fannie Mae and Freddie Mac were encouraged to purchase and securitize mortgages, while investors, buoyed by implicit government backing, rushed to provide funding. Money that could have been invested in more productive, less risky sectors of the economy was thereby malinvested in subprime mortgage loans.
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On Money, Inflation and Government
30 March 2008 Texas Straight Talk 30 March 2008 verse 5 ... Cached
The implicit guarantee from the Fed is quickly becoming explicit, as those institutions deemed "too big to fail" are bailed out at taxpayer expense. Wall Street made a killing during the housing bubble, reaping record profits. Now that the bubble has burst, these same firms are trying to dump their losses on the taxpayers. This approach requires more money creation, and therefore debasement of all dollars in circulation.
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Bailing Out Banks
13 April 2008 Texas Straight Talk 13 April 2008 verse 3 ... Cached
The current market crisis began because of Federal Reserve monetary policy during the early 2000s in which the Fed lowered the interest rate to a below-market rate. The artificially low rates led to overinvestment in housing and other malinvestments. When the first indications of market trouble began back in August of 2007, instead of holding back and allowing bad decision-makers to suffer the consequences of their actions, the Federal Reserve took aggressive, inflationary action to ensure that large Wall Street firms would not lose money. It began by lowering the discount rates, the rates of interest charged to banks who borrow directly from the Fed, and lengthening the terms of such loans. This eliminated much of the stigma from discount window borrowing and enabled troubled banks to come to the Fed directly for funding, pay only a slightly higher interest rate but also secure these loans for a period longer than just overnight.
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Bailing Out Banks
13 April 2008 Texas Straight Talk 13 April 2008 verse 7 ... Cached
Worst of all, the Treasury Department has recently proposed that the Federal Reserve, which was responsible for the housing bubble and subprime crisis in the first place, be rewarded for all its intervention by being turned into a super-regulator. The Treasury foresees the Fed as the guarantor of market stability, with oversight over any financial institution that could pose a threat to the financial system. Rewarding poor performing financial institutions is bad enough, but rewarding the institution that enabled the current economic crisis is unconscionable.
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Big Government Responsible for Housing Bubble
11 May 2008 Texas Straight Talk 11 May 2008 verse 1 ... Cached
Big Government Responsible for Housing Bubble
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Big Government Responsible for Housing Bubble
11 May 2008 Texas Straight Talk 11 May 2008 verse 2 ... Cached
The House passed two bills attempting to rehabilitate the housing and mortgage market this week. There doesn't seem to be any shortage of criticism and blame for the bad decisions, and rightly so. Lenders and banks do share much of the blame for the overheated market. Lending standards were relaxed, or even abandoned altogether, creating an exaggerated pool of homebuyers that led to ballooning home prices that many, especially real estate investors, expected to continue forever. Now that the bubble has burst, the losses are staggering.
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Big Government Responsible for Housing Bubble
11 May 2008 Texas Straight Talk 11 May 2008 verse 4 ... Cached
These housing bills address the crisis in exactly the wrong way, by seeking to hide the problem with more disastrous government bail-outs and interventions. One measure, HR 5830 the Federal Housing Administration (FHA) Housing Stabilization and Homeowner Retention Act would allow the FHA to guarantee as much as $300 billion worth of refinanced home loans for those facing threat of foreclosure. HR 5818 the Neighborhood Stabilization Act, would provide $15 billion in loans and grants to localities to purchase and renovate foreclosed homes with the object of then selling or renting out those homes. Thankfully, President Bush has vowed to veto both of these bills. It is neither morally right nor fiscally wise to socialize private losses in this way.
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Rising Energy Prices and the Falling Dollar
09 June 2008 Texas Straight Talk 09 June 2008 verse 3 ... Cached
Part of the answer lies in understanding bubbles and monetary inflation, but especially the Federal Reserve System. The Federal Reserve is charged with controlling inflation through interest rate manipulation, however, many fail to realize that creating money, and therefore inflation, is really its only tool. When the Federal Reserve inflates the dollar as drastically as it has in the past few decades, the first users of the newly created money go in search of investments for their dollars. They must invest this money quickly and aggressively before it loses value. This causes certain sectors to expand beyond what would naturally occur in the free market. Eventually the sector overheats and the bubble bursts. Overinvestment in dotcoms eventually led to a collapse of the NASDAQ. Next we had the housing bubble, and now we are seeing the price of oil being bid up in the creation of another new bubble. Investors are now looking to commodities like oil, for stability and growth as they pull capital out of real estate. This increased demand for investment vehicles related to oil contributes to driving up the price of the actual product.
Texas Straight Talk from 20 December 1996 to 23 June 2008 (573 editions) are included in this Concordance. Texas Straight Talk after 23 June 2008 is in blog form on Rep. Paul’s Congressional website and is not included in this Concordance.
Remember, not everything in the concordance is Ron Paul’s words. Some things he quoted, and he added some newspaper and magazine articles to the Congressional Record. Check the original speech to see.