Volume 2006 — The Book of Ron Paul

2006 Ron Paul Chapter 1
January 18, 2006
Searching for a New Direction

2006 Ron Paul 1:1
The Abramoff scandal has been described as the biggest Washington scandal ever: bigger than Watergate; bigger than Abscam; bigger than Koreagate; bigger than the House banking scandal; bigger than Teapot Dome.   Possibly so.   It’s certainly serious and significant.

2006 Ron Paul 1:2
It has prompted urgent proposals of suggested reforms to deal with the mess.   If only we have more rules and regulations, more reporting requirements, and stricter enforcement of laws, the American people will be assured we mean business.   Ethics and character will return to the halls of Congress.   It is argued that new champions of reform should be elected to leadership positions, to show how serious we are about dealing with the crisis of confidence generated by the Abramoff affair.   Then all will be well.   But it’s not so simple.   Maybe what we have seen so far is just the tip of the iceberg, an insidious crisis staring us in the face that we refuse to properly identify and deal with.

2006 Ron Paul 1:3
It’s been suggested we need to change course and correct the way Congress is run.   A good idea, but if we merely tinker with current attitudes about what role the federal government ought to play in our lives, it won’t do much to solve the ethics crisis.   True reform is impossible without addressing the immorality of wealth redistribution.   Merely electing new leaders and writing more rules to regulate those who petition Congress will achieve nothing.

2006 Ron Paul 1:4
Could it be that we’re all looking in the wrong places for a solution to recurring, constant, and pervasive corruption in government?   Perhaps some of us in Congress are mistaken about the true problem; perhaps others deliberately distract us from exposing the truth about how miserably corrupt the budget process in Congress is.   Others simply are in a state of denial.   But the denial will come to an end as the Abramoff scandal reveals more and more.   It eventually will expose the scandal of the ages: how and to what degree the American people have become indebted by the totally irresponsible spending habits of the U.S. Congress — as encouraged by successive administrations, condoned by our courts, and enjoyed by the recipients of the largesse.

2006 Ron Paul 1:5
This system of government is coming to an end — a fact that significantly contributes to the growing anxiety of most Americans, especially those who pay the bills and receive little in return from the corrupt system that has evolved over the decades.

2006 Ron Paul 1:6
Believe me, if everybody benefited equally there would be scant outcry over a little bribery and influence peddling.   As our country grows poorer and more indebted, fewer people benefit.    The beneficiaries are not the hard working, honest people who pay the taxes.   The groups that master the system of lobbying and special interest legislation are the ones who truly benefit.

2006 Ron Paul 1:7
The steady erosion of real wealth in this country, and the dependency on government generated by welfarism and warfarism, presents itself as the crisis of the ages.   Lobbying scandals and the need for new leadership are mere symptoms of a much, much deeper problem.

2006 Ron Paul 1:8
There are quite a few reasons a relatively free country allows itself to fall into such an ethical and financial mess.

2006 Ron Paul 1:9
One major contributing factor for the past hundred years is our serious misunderstanding of the dangers of pure democracy.   The founders detested democracy and avoided the use of the word in all the early documents.   Today, most Americans accept without question a policy of sacrificing life, property, and dollars to force “democracy” on a country 6,000 miles away.   This tells us how little opposition there is to “democracy.”   No one questions the principle that a majority electorate should be allowed to rule the country, dictate rights, and redistribute wealth.

2006 Ron Paul 1:10
Our system of democracy has come to mean worshipping the notion that a majority vote for the distribution of government largesse, loot confiscated from the American people through an immoral tax system, is morally and constitutionally acceptable.   Under these circumstances it’s no wonder a system of runaway lobbying and special interests has developed.   Add this to the military industrial complex that developed over the decades due to a foreign policy of perpetual war and foreign military intervention, and we shouldn’t wonder why there is such a powerful motivation to learn the tricks of the lobbying trade — and why former members of Congress and their aides become such high priced commodities.   Buying influence is much more lucrative than working and producing for a living. The trouble is the process invites moral corruption.   The dollars involved grow larger and larger because of the deficit financing and inflation that pure democracy always generates.

2006 Ron Paul 1:11
Dealing with lobbying scandals while ignoring the scandal of unconstitutional runaway government will solve nothing.   If people truly believe that reform is the solution, through regulating lobbyists and increasing congressional reporting requirements, the real problem will be ignored and never identified.   This reform only makes things worse.  

2006 Ron Paul 1:12
Greater regulation of lobbyists is a dangerous and unnecessary proposition.   If one expects to solve a problem without correctly identifying its source, the problem persists.   The First amendment clearly states: “Congress shall make no laws respecting…the right of the people…to petition the government for a redress of grievances.”   That means NO law!

2006 Ron Paul 1:13
The problem of special interest government that breeds corruption comes from our lack of respect for the Constitution in the first place.   So what do we do? We further violate the Constitution rather than examine it for guidance as to the proper role of the federal government.   Laws addressing bribery, theft, and fraud, already on the books, are adequate to deal with the criminal activities associated with lobbying.   New laws and regulations are unnecessary.

2006 Ron Paul 1:14
The theft that the federal government commits against its citizens, and the power that Congress has assumed illegally, are the real crimes that need to be dealt with.   In this regard we truly do need a new direction.   Get rid of the evil tax system; the fraudulent monetary system; and the power of government to run our lives, the economy, and the world; and the Abramoff types would be exposed for the mere gnats they are.   There would be a lot less of them, since the incentives to buy politicians would be removed.

2006 Ron Paul 1:15
Even under today’s flawed system of democratic government, which is dedicated to redistributing property by force, a lot could be accomplished if government attracted men and women of good will and character.   Members could refuse to yield to the temptations of office, and reject the path to a lobbying career.   But it seems once government adopts the rules of immorality, some of the participants in the process yield to the temptation as well, succumbing to the belief that the new moral standards are acceptable.

2006 Ron Paul 1:16
Today though, any new rules designed to restrain special interest favoritism will only push the money further under the table.   Too much is at stake.   Corporations, bureaucrats, lobbyists, and politicians have grown accustomed to the system, and have learned to work within it to survive.   Only when the trough is emptied will the country wake up.   Eliminating earmarks in the budget will not solve the problem.

2006 Ron Paul 1:17
Comparing the current scandal to the “big” one, the Abramoff types are petty thieves.   The government deals in trillions of dollars; the Abramoffs in mere tens of millions.   Take a look at the undeclared war we’re bogged down in 6,000 miles from our shores.   We’ve spent 300 billion dollars already, but Nobel prize winner Joseph Stiglitz argues that the war actually will cost between one and two trillion dollars when it’s all over and done with.   That’s trillions , not billions.   Even that figure is unpredictable, because we may be in Iraq another year or ten — who knows?   Considering the war had nothing to do with our national security, we’re talking big bucks being wasted and lining the pockets of many well-connected American corporations.   Waste, fraud, stupidity, and no-bid contracts characterize the process.   And it’s all done in the name of patriotism and national security.   Dissenters are accused of supporting the enemy.   Now this is a rip-off that a little tinkering with House rules and restraints on lobbyists won’t do much to solve.  

2006 Ron Paul 1:18
Think of how this undeclared war has contributed to our national deficit, undermined military morale and preparedness, antagonized our allies, and exposed us to an even greater threat from those who resent our destructive occupation.   Claiming we have no interests in the oil of the entire Middle East hardly helps our credibility throughout the world.

2006 Ron Paul 1:19
The system of special interest government that has evolved over the last several decades has given us a national debt of over eight trillion dollars, a debt that now expands by over 600 billion dollars each year.   Our total obligations are estimated between fifteen and twenty trillion dollars.   Most people realize the Social Security system, the Medicare system, and the new prescription drug plan are unfunded.   Thousands of private pension funds are now being dumped on the U.S. government and American taxpayers.   We are borrowing over 700 billion dollars each year from foreigners to finance this extravagance, and we now qualify as the greatest international debtor nation in history.   Excessive consumption using borrowed money is hardly the way to secure a sound economy.

2006 Ron Paul 1:20
Instead of reining in government spending, Congress remains oblivious to the financial dangers and panders to special interests by offering no resistance whatsoever to every request for new spending.   Congress spends nearly 2 ½ trillion dollars annually in an attempt to satisfy everyone’s demands.   The system has generated over 200 trillion dollars of derivatives.   These problems can’t be addressed with token leadership changes and tinkering with the budget.   A new and a dramatic direction is required.

2006 Ron Paul 1:21
As current policy further erodes the budget, special interests and members of Congress become even more aggressive in their efforts to capture a piece of the dwindling economic pie.   That success is the measure of effectiveness that guarantees a member’s re-election.

2006 Ron Paul 1:22
The biggest rip-off of all — the paper money system that is morally and economically equivalent to counterfeiting — is never questioned.   It is the deceptive tool for transferring billions from the unsuspecting poor and middle-class to the special interest rich.   And in the process, the deficit-propelled budget process supports the spending demands of all the special interests — left and right, welfare and warfare — while delaying payment to another day and sometimes even to another generation.

2006 Ron Paul 1:23
The enormous sums spent each year to support the influential special interests expand exponentially, and no one really asks how it’s accomplished. Raising taxes to balance the budget is out of the question — and rightfully so.   Foreigners have been generous in their willingness to loan us most of what we need, but even that generosity is limited and may well diminish in the future.

2006 Ron Paul 1:24
But if the Federal Reserve did not pick up the slack and create huge amounts of new credit and money out of thin air, interest rates would rise and call a halt to the charade.   The people who suffer from a depreciated dollar don’t understand why they suffer, while the people who benefit promote the corrupt system.   The wealthy clean up on Wall Street, and the unsophisticated buy in as the market tops off.   Wealth is transferred from one group to another, and it’s all related to the system that allows politicians and the central banks to create money out of thin air.   It’s literally legalized counterfeiting.

2006 Ron Paul 1:25
Is it any wonder jobs go overseas?   True capital only comes from savings, and Americans save nothing.   We only borrow and consume.   A counterfeiter has no incentive to take his newly created money and build factories.   The incentive for Americans is to buy consumer goods from other countries whose people are willing to save and invest in their factories and jobs.   The only way we can continue this charade is to borrow excess dollars back from the foreign governments who sell us goods, and perpetuate the pretense of wealth that we enjoy.

2006 Ron Paul 1:26
The system of money contributes significantly to the problem of illegal immigration.   On the surface, immigrants escaping poverty in Mexico and Central America come here for the economic opportunity that our economy offers.   However, the social services they receive, including education and medical benefits — as well as the jobs they get — are dependent on our perpetual indebtedness to foreign countries.   When the burden of debt becomes excessive, this incentive to seek prosperity here in the United States will change.

2006 Ron Paul 1:27
The prime beneficiaries of a paper money system are those who use the money early — governments, politicians, bankers, international corporations, and the military industrial complex.   Those who suffer most are the ones at the end of the money chain — the people forced to use depreciated dollars to buy urgently needed goods and services to survive.   And guess what?   By then their money is worth less, prices soar, and their standard of living goes down.

2006 Ron Paul 1:28
The consequences of this system, fully in place for the past thirty-four years, are astronomical and impossible to accurately measure.   Industries go offshore and the jobs follow.   Price inflation eats away at the middle class, and deficits soar while spending escalates rapidly as Congress hopes to keep up with the problems it created.   The remaining wealth that we struggle to hold onto is based on debt, future tax revenues, and our ability to manufacture new dollars without restraint.   There’s only one problem: it all depends on trust in the dollar, especially by foreign holders and purchasers.   This trust will end, and signs of the beginning of the end are already appearing.

2006 Ron Paul 1:29
During this administration the dollar has suffered severely as a consequence of the policy of inflating the currency to pay our bills.   The dollar price of gold has more than doubled ($252 to $560 per ounce, a 122 % increase).   This means the dollar has depreciated in terms of gold, the time-honored and reliable measurement of a nation’s currency, by an astounding 55%.   The long-term economic health of the nation is measured by the soundness of its currency.   Once Rome converted from a republic to an empire, she depreciated her currency to pay the bills.   This eventually led to Rome’s downfall. That is exactly what America is facing unless we change our ways.

2006 Ron Paul 1:30
Now this is a real scandal worth worrying about.   Since it’s not yet on Washington’s radar screen, no attempt at addressing the problem is being made.   Instead, we’ll be sure to make those the Constitution terms, “petitioners to redress their grievances” fill out more forms.   We’ll make government officials attend more ethics courses so they can learn how to be more ethical.

2006 Ron Paul 1:31
A free nation, as it moves toward authoritarianism, tolerates and hides a lot of abuse in the system.   The human impulse for wealth creation is hard to destroy.   But in the end it will happen here, if true reform of our economic, monetary, and political system is not accomplished.  

2006 Ron Paul 1:32
Whether government programs are promoted for “good” causes (helping the poor), or bad causes (permitting a military-industrial complex to capitalize on war profits), the principles of the market are undermined.   Eventually nearly everyone becomes dependent on the system of deficits, borrowing, printing press money, and the special interest budget process that distributes loot by majority vote.  

2006 Ron Paul 1:33
Today, most business interests and the poor are dependent on government handouts.   Education and medical care is almost completely controlled and regulated by an overpowering central government.   We have come to accept our role as world policemen and nation builder with little question, despite the bad results and an inability to pay the bills.

2006 Ron Paul 1:34
The question is, what will it take to bring about the changes in policy needed to reverse this dangerous trend?   The answer is: quite a lot.   And unfortunately it’s not on the horizon.   It probably won’t come until there is a rejection of the dollar as the safest and strongest world currency, and a return to commodity money like gold and silver to restore confidence.

2006 Ron Paul 1:35
The Abramoff-type scandals come and go in Washington, patched over with grandiose schemes of reform that amount to nothing but more government and congressional mischief.   But our efforts should be directed toward eliminating the greatest of all frauds — printing press money that creates the political conditions breeding the vultures and leeches who feed off the corrupt system.

2006 Ron Paul 1:36
Counterfeiting money never creates wealth — it only steals wealth from the unsuspecting.   The Federal Reserve creation of money is exactly the same.   Increasing the dollars in circulation can only diminish the value of each existing dollar.   Only production and jobs can make a country wealthy in the long run.   Today it’s obvious our country is becoming poorer and more uneasy as our jobs and capital go overseas.  

2006 Ron Paul 1:37
The Abramoff scandal can serve a useful purpose if we put it in context of the entire system that encourages corruption.

2006 Ron Paul 1:38
If it’s seen as an isolated case of individual corruption, and not an expected consequence of big government run amuck, little good will come of it.   If we understand how our system of government intervenes in our personal lives, the entire economy, and the internal affairs of nations around the world, we can understand how it generates the conditions where lobbyists thrive. Only then will some good come of it.   Only then will we understand that undermining the First amendment right of the people to petition their government is hardly a solution to this much more serious and pervasive problem.

2006 Ron Paul 1:39
If we’re inclined to improve conditions, we should give serious consideration to the following policy reforms, reforms the American people who cherish liberty would enthusiastically support:  

2006 Ron Paul 1:40
1.       No more “No Child Left Behind” legislation;

2006 Ron Paul 1:41
2.       No more prescription drug programs;

2006 Ron Paul 1:42
3.       No more undeclared wars;

2006 Ron Paul 1:43
4.       No more nation building;

2006 Ron Paul 1:44
5.       No more acting as the world policemen;

2006 Ron Paul 1:45
6.       No more deficits;

2006 Ron Paul 1:46
7.       Cut spending—everywhere;

2006 Ron Paul 1:47
8.       No more political and partisan resolutions designed to embarrass those who may well have legitimate and honest disagreements with current policy;

2006 Ron Paul 1:48
9.       No inferences that disagreeing with policy is unpatriotic or disloyal to the country;

2006 Ron Paul 1:49
10.   No more pretense of budget reform while ignoring off-budget spending and the ever-growing fourteen appropriations bills;

2006 Ron Paul 1:50
11.   Cut funding for corporate welfare, foreign aid, international NGOs, defense contractors, the military industrial complex, and rich corporate farmers before cutting welfare for the poor at home;

2006 Ron Paul 1:51
12.   No more unconstitutional intrusions into the privacy of law-abiding American citizens;

2006 Ron Paul 1:52
13.   Reconsider the hysterical demands for security over liberty by curtailing the ever-expanding and oppressive wars on drugs, tax violators, and gun ownership.

2006 Ron Paul 1:53
Finally, why not try something novel, like having Congress act as an independent and equal branch of government?   Restore the principle of the separation of powers, so that we can perform our duty to provide checks and balances on an executive branch (and an accommodating judiciary) that spies on Americans, glorifies the welfare state, fights undeclared wars, and enormously increases the national debt.   Congress was not meant to be a rubber stamp.   It’s time for a new direction.

2006 Ron Paul Chapter 2
February 1, 2006
Statement on H.Res 648

2006 Ron Paul 2:1
Mr. Speaker, anyone who doubts that empty symbolism often trumps substance in Washington only needs to consider the first item of business for the House of Representatives in this new year: banning former members of Congress who are lobbyists from using the House gym.  This bill is being rushed to the floor in order to assure the American people that Congress is “cracking down” on lobbying practices in response to recent scandals

2006 Ron Paul 2:2
This measure does nothing to address the root cause of the scandals — the ever-growing size and power of the federal government. As long the federal government continues to regulate, tax, and subsidize the American people, there will be attempts to influence those who write the laws and regulations under which the people must live. Human nature being what it is, there will also be those lobbyists and policymakers who manipulate the power of the regulatory state to enrich themselves. I have said before, and I fear I will have plenty of opportunity to say it again: the only way to get special interest money and influence out of politics is to get the money and power out of Washington. Instead of passing new regulations and laws regulating the people’s right to petition their government, my colleagues should refuse to vote for any legislation that violates the constitutional limits on federal power or enriches a special interest at the expense of American taxpayers. Returning to constitutional government is the only way to ensure that our republican institutions will not be corrupted by powerful interests seeking special privileges.

2006 Ron Paul Chapter 3
Before the U.S. House of Representatives  

February 15, 2006
The End of Dollar Hegemony

2006 Ron Paul 3:1
A hundred years ago it was called “dollar diplomacy.”   After World War II, and especially after the fall of the Soviet Union in 1989, that policy evolved into “dollar hegemony.”   But after all these many years of great success, our dollar dominance is coming to an end.

2006 Ron Paul 3:2
It has been said, rightly, that he who holds the gold makes the rules.   In earlier times it was readily accepted that fair and honest trade required an exchange for something of real value.

2006 Ron Paul 3:3
First it was simply barter of goods.   Then it was discovered that gold held a universal attraction, and was a convenient substitute for more cumbersome barter transactions.   Not only did gold facilitate exchange of goods and services, it served as a store of value for those who wanted to save for a rainy day.

2006 Ron Paul 3:4
Though money developed naturally in the marketplace, as governments grew in power they assumed monopoly control over money.   Sometimes governments succeeded in guaranteeing the quality and purity of gold, but in time governments learned to outspend their revenues.   New or higher taxes always incurred the disapproval of the people, so it wasn’t long before Kings and Caesars learned how to inflate their currencies by reducing the amount of gold in each coin — always hoping their subjects wouldn’t discover the fraud.   But the people always did, and they strenuously objected.

2006 Ron Paul 3:5
This helped pressure leaders to seek more gold by conquering other nations.   The people became accustomed to living beyond their means, and enjoyed the circuses and bread. Financing extravagances by conquering foreign lands seemed a logical alternative to working harder and producing more.   Besides, conquering nations not only brought home gold, they brought home slaves as well.   Taxing the people in conquered territories also provided an incentive to build empires.   This system of government worked well for a while, but the moral decline of the people led to an unwillingness to produce for themselves.   There was a limit to the number of countries that could be sacked for their wealth, and this always brought empires to an end.   When gold no longer could be obtained, their military might crumbled.   In those days those who held the gold truly wrote the rules and lived well.

2006 Ron Paul 3:6
That general rule has held fast throughout the ages.   When gold was used, and the rules protected honest commerce, productive nations thrived.   Whenever wealthy nations — those with powerful armies and gold — strived only for empire and easy fortunes to support welfare at home, those nations failed.

2006 Ron Paul 3:7
Today the principles are the same, but the process is quite different.   Gold no longer is the currency of the realm; paper is.   The truth now is: “He who prints the money makes the rules” — at least for the time being.   Although gold is not used, the goals are the same: compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses.

2006 Ron Paul 3:8
Since printing paper money is nothing short of counterfeiting, the issuer of the international currency must always be the country with the military might to guarantee control over the system.   This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency.   The one problem, however, is that such a system destroys the character of the counterfeiting nation’s people — just as was the case when gold was the currency and it was obtained by conquering other nations.   And this destroys the incentive to save and produce, while encouraging debt and runaway welfare.

2006 Ron Paul 3:9
The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others.  In both cases personal responsibility for one’s actions is rejected.

2006 Ron Paul 3:10
When paper money is rejected, or when gold runs out, wealth and political stability are lost.   The country then must go from living beyond its means to living beneath its means, until the economic and political systems adjust to the new rules — rules no longer written by those who ran the now defunct printing press.

2006 Ron Paul 3:11
“Dollar Diplomacy,” a policy instituted by William Howard Taft and his Secretary of State Philander C. Knox, was designed to enhance U.S. commercial investments in Latin America and the Far East.   McKinley concocted a war against Spain in 1898, and   (Teddy) Roosevelt’s corollary to the Monroe Doctrine preceded Taft’s aggressive approach to using the U.S. dollar and diplomatic influence to secure U.S. investments abroad.   This earned the popular title of “Dollar Diplomacy.”   The significance of Roosevelt’s change was that our intervention now could be justified by the mere “appearance” that a country of interest to us was politically or fiscally vulnerable to European control.   Not only did we claim a right, but even an official U.S. government “obligation” to protect our commercial interests from Europeans.

2006 Ron Paul 3:12
This new policy came on the heels of the “gunboat” diplomacy of the late 19 th century, and it meant we could buy influence before resorting to the threat of force.   By the time the “dollar diplomacy” of William Howard Taft was clearly articulated, the seeds of American empire were planted.   And they were destined to grow in the fertile political soil of a country that lost its love and respect for the republic bequeathed to us by the authors of the Constitution.   And indeed they did.   It wasn’t too long before dollar “diplomacy” became dollar “hegemony” in the second half of the 20 th century.

2006 Ron Paul 3:13
This transition only could have occurred with a dramatic change in monetary policy and the nature of the dollar itself.

2006 Ron Paul 3:14
Congress created the Federal Reserve System in 1913.   Between then and 1971 the principle of sound money was systematically undermined.   Between 1913 and 1971, the Federal Reserve found it much easier to expand the money supply at will for financing war or manipulating the economy with little resistance from Congress — while benefiting the special interests that influence government.

2006 Ron Paul 3:15
Dollar dominance got a huge boost after World War II.   We were spared the destruction that so many other nations suffered, and our coffers were filled with the world’s gold.   But the world chose not to return to the discipline of the gold standard, and the politicians applauded.   Printing money to pay the bills was a lot more popular than taxing or restraining unnecessary spending.   In spite of the short-term benefits, imbalances were institutionalized for decades to come.

2006 Ron Paul 3:16
The 1944 Bretton Woods agreement solidified the dollar as the preeminent world reserve currency, replacing the British pound.   Due to our political and military muscle, and because we had a huge amount of physical gold, the world readily accepted our dollar (defined as 1/35 th of an ounce of gold) as the world’s reserve currency.   The dollar was said to be “as good as gold,” and convertible to all foreign central banks at that rate.   For American citizens, however, it remained illegal to own.   This was a gold-exchange standard that from inception was doomed to fail.

2006 Ron Paul 3:17
The U.S. did exactly what many predicted she would do.   She printed more dollars for which there was no gold backing.   But the world was content to accept those dollars for more than 25 years with little question — until the French and others in the late 1960s demanded we fulfill our promise to pay one ounce of gold for each $35 they delivered to the U.S. Treasury.   This resulted in a huge gold drain that brought an end to a very poorly devised pseudo-gold standard.

2006 Ron Paul 3:18
It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold.   In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets.

2006 Ron Paul 3:19
Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency with no restraints placed on it — not even a pretense of gold convertibility, none whatsoever!   Though the new policy was even more deeply flawed, it nevertheless opened the door for dollar hegemony to spread.

2006 Ron Paul 3:20
Realizing the world was embarking on something new and mind boggling, elite money managers, with especially strong support from U.S. authorities, struck an agreement with OPEC to price oil in U.S. dollars exclusively for all worldwide transactions.   This gave the dollar a special place among world currencies and in essence “backed” the dollar with oil.   In return, the U.S. promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup.   This arrangement helped ignite the radical Islamic movement among those who resented our influence in the region.   The arrangement gave the dollar artificial strength, with tremendous financial benefits for the United States.   It allowed us to export our monetary inflation by buying oil and other goods at a great discount as dollar influence flourished.

2006 Ron Paul 3:21
This post-Bretton Woods system was much more fragile than the system that existed between 1945 and 1971.   Though the dollar/oil arrangement was helpful, it was not nearly as stable as the pseudo gold standard under Bretton Woods.   It certainly was less stable than the gold standard of the late 19 th century.

2006 Ron Paul 3:22
During the 1970s the dollar nearly collapsed, as oil prices surged and gold skyrocketed to $800 an ounce. By 1979 interest rates of 21% were required to rescue the system.   The pressure on the dollar in the 1970s, in spite of the benefits accrued to it, reflected reckless budget deficits and monetary inflation during the 1960s.   The markets were not fooled by LBJ’s claim that we could afford both “guns and butter.”

2006 Ron Paul 3:23
Once again the dollar was rescued, and this ushered in the age of true dollar hegemony lasting from the early 1980s to the present.   With tremendous cooperation coming from the central banks and international commercial banks, the dollar was accepted as if it were gold.

2006 Ron Paul 3:24
Fed Chair Alan Greenspan, on several occasions before the House Banking Committee, answered my challenges to him about his previously held favorable views on gold by claiming that he and other central bankers had gotten paper money — i.e. the dollar system — to respond as if it were gold.   Each time I strongly disagreed, and pointed out that if they had achieved such a feat they would have defied centuries of economic history regarding the need for money to be something of real value.   He smugly and confidently concurred with this.

2006 Ron Paul 3:25
In recent years central banks and various financial institutions, all with vested interests in maintaining a workable fiat dollar standard, were not secretive about selling and loaning large amounts of gold to the market even while decreasing gold prices raised serious questions about the wisdom of such a policy.   They never admitted to gold price fixing, but the evidence is abundant that they believed if the gold price fell it would convey a sense of confidence to the market, confidence that they indeed had achieved amazing success in turning paper into gold.

2006 Ron Paul 3:26
Increasing gold prices historically are viewed as an indicator of distrust in paper currency.   This recent effort was not a whole lot different than the U.S. Treasury selling gold at $35 an ounce in the 1960s, in an attempt to convince the world the dollar was sound and as good as gold.   Even during the Depression, one of Roosevelt’s first acts was to remove free market gold pricing as an indication of a flawed monetary system by making it illegal for American citizens to own gold.   Economic law eventually limited that effort, as it did in the early 1970s when our Treasury and the IMF tried to fix the price of gold by dumping tons into the market to dampen the enthusiasm of those seeking a safe haven for a falling dollar after gold ownership was re-legalized.

2006 Ron Paul 3:27
Once again the effort between 1980 and 2000 to fool the market as to the true value of the dollar proved unsuccessful.   In the past 5 years the dollar has been devalued in terms of gold by more than 50%.   You just can’t fool all the people all the time, even with the power of the mighty printing press and money creating system of the Federal Reserve.

2006 Ron Paul 3:28
Even with all the shortcomings of the fiat monetary system, dollar influence thrived.   The results seemed beneficial, but gross distortions built into the system remained.   And true to form, Washington politicians are only too anxious to solve the problems cropping up with window dressing, while failing to understand and deal with the underlying flawed policy.   Protectionism, fixing exchange rates, punitive tariffs, politically motivated sanctions, corporate subsidies, international trade management, price controls, interest rate and wage controls, super-nationalist sentiments, threats of force, and even war are resorted to—all to solve the problems artificially created by deeply flawed monetary and economic systems.

2006 Ron Paul 3:29
In the short run, the issuer of a fiat reserve currency can accrue great economic benefits.   In the long run, it poses a threat to the country issuing the world currency. In this case that’s the United States.   As long as foreign countries take our dollars in return for real goods, we come out ahead.   This is a benefit many in Congress fail to recognize, as they bash China for maintaining a positive trade balance with us.   But this leads to a loss of manufacturing jobs to overseas markets, as we become more dependent on others and less self-sufficient.   Foreign countries accumulate our dollars due to their high savings rates, and graciously loan them back to us at low interest rates to finance our excessive consumption.

2006 Ron Paul 3:30
It sounds like a great deal for everyone, except the time will come when our dollars — due to their depreciation — will be received less enthusiastically or even be rejected by foreign countries.   That could create a whole new ballgame and force us to pay a price for living beyond our means and our production.   The shift in sentiment regarding the dollar has already started, but the worst is yet to come.

2006 Ron Paul 3:31
The agreement with OPEC in the 1970s to price oil in dollars has provided tremendous artificial strength to the dollar as the preeminent reserve currency.   This has created a universal demand for the dollar, and soaks up the huge number of new dollars generated each year.   Last year alone M3 increased over $700 billion.

2006 Ron Paul 3:32
The artificial demand for our dollar, along with our military might, places us in the unique position to “rule” the world without productive work or savings, and without limits on consumer spending or deficits.   The problem is, it can’t last.

2006 Ron Paul 3:33
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’s bound to come and create conditions worse than 1979-1980, which required 21% 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.

2006 Ron Paul 3:34
Greenspan, in his first speech after leaving the Fed, said that gold prices were up because of concern about terrorism, and not because of monetary concerns or because he created too many dollars during his tenure.   Gold has to be discredited and the dollar propped up.   Even when the dollar comes under serious attack by market forces, the central banks and the IMF surely will do everything conceivable to soak up the dollars in hope of restoring stability.   Eventually they will fail.

2006 Ron Paul 3:35
Most importantly, the dollar/oil relationship has to be maintained to keep the dollar as a preeminent currency.   Any attack on this relationship will be forcefully challenged—as it already has been.

2006 Ron Paul 3:36
In November 2000 Saddam Hussein demanded Euros for his oil.   His arrogance was a threat to the dollar; his lack of any military might was never a threat.   At the first cabinet meeting with the new administration in 2001, as reported by Treasury Secretary Paul O’Neill, the major topic was how we would get rid of Saddam Hussein — though there was no evidence whatsoever he posed a threat to us.   This deep concern for Saddam Hussein surprised and shocked O’Neill.

2006 Ron Paul 3:37
It now is common knowledge that the immediate reaction of the administration after 9/11 revolved around how they could connect Saddam Hussein to the attacks, to justify an invasion and overthrow of his government.   Even with no evidence of any connection to 9/11, or evidence of weapons of mass destruction, public and congressional support was generated through distortions and flat out misrepresentation of the facts to justify overthrowing Saddam Hussein.

2006 Ron Paul 3:38
There was no public talk of removing Saddam Hussein because of his attack on the integrity of the dollar as a reserve currency by selling oil in Euros.   Many believe this was the real reason for our obsession with Iraq.   I doubt it was the only reason, but it may well have played a significant role in our motivation to wage war.   Within a very short period after the military victory, all Iraqi oil sales were carried out in dollars.   The Euro was abandoned.

2006 Ron Paul 3:39
In 2001, Venezuela’s ambassador to Russia spoke of Venezuela switching to the Euro for all their oil sales.   Within a year there was a coup attempt against Chavez, reportedly with assistance from our CIA.

2006 Ron Paul 3:40
After these attempts to nudge the Euro toward replacing the dollar as the world’s reserve currency were met with resistance, the sharp fall of the dollar against the Euro was reversed.   These events may well have played a significant role in maintaining dollar dominance.

2006 Ron Paul 3:41
It’s become clear the U.S. administration was sympathetic to those who plotted the overthrow of Chavez, and was embarrassed by its failure.   The fact that Chavez was democratically elected had little influence on which side we supported.

2006 Ron Paul 3:42
Now, a new attempt is being made against the petrodollar system.   Iran, another member of the “axis of evil,” has announced her plans to initiate an oil bourse in March of this year.   Guess what, the oil sales will be priced Euros, not dollars.

2006 Ron Paul 3:43
Most Americans forget how our policies have systematically and needlessly antagonized the Iranians over the years.   In 1953 the CIA helped overthrow a democratically elected president, Mohammed Mossadeqh, and install the authoritarian Shah, who was friendly to the U.S.   The Iranians were still fuming over this when the hostages were seized in 1979.   Our alliance with Saddam Hussein in his invasion of Iran in the early 1980s did not help matters, and obviously did not do much for our relationship with Saddam Hussein.   The administration announcement in 2001 that Iran was part of the axis of evil didn’t do much to improve the diplomatic relationship between our two countries.   Recent threats over nuclear power, while ignoring the fact that they are surrounded by countries with nuclear weapons, doesn’t seem to register with those who continue to provoke Iran.   With what most Muslims perceive as our war against Islam, and this recent history, there’s little wonder why Iran might choose to harm America by undermining the dollar.   Iran, like Iraq, has zero capability to attack us.   But that didn’t stop us from turning Saddam Hussein into a modern day Hitler ready to take over the world.   Now Iran, especially since she’s made plans for pricing oil in Euros, has been on the receiving end of a propaganda war not unlike that waged against Iraq before our invasion.

2006 Ron Paul 3:44
It’s not likely that maintaining dollar supremacy was the only motivating factor for the war against Iraq, nor for agitating against Iran.   Though the real reasons for going to war are complex, we now know the reasons given before the war started, like the presence of weapons of mass destruction and Saddam Hussein’s connection to 9/11, were false.   The dollar’s importance is obvious, but this does not diminish the influence of the distinct plans laid out years ago by the neo-conservatives to remake the Middle East.   Israel’s influence, as well as that of the Christian Zionists, likewise played a role in prosecuting this war.   Protecting “our” oil supplies has influenced our Middle East policy for decades.

2006 Ron Paul 3:45
But the truth is that paying the bills for this aggressive intervention is impossible the old fashioned way, with more taxes, more savings, and more production by the American people.   Much of the expense of the Persian Gulf War in 1991 was shouldered by many of our willing allies.   That’s not so today.   Now, more than ever, the dollar hegemony — it’s dominance as the world reserve currency — is required to finance our huge war expenditures.   This $2 trillion never-ending war must be paid for, one way or another.   Dollar hegemony provides the vehicle to do just that.

2006 Ron Paul 3:46
For the most part the true victims aren’t aware of how they pay the bills.   The license to create money out of thin air allows the bills to be paid through price inflation.   American citizens, as well as average citizens of Japan, China, and other countries suffer from price inflation, which represents the “tax” that pays the bills for our military adventures.   That is until the fraud is discovered, and the foreign producers decide not to take dollars nor hold them very long in payment for their goods.   Everything possible is done to prevent the fraud of the monetary system from being exposed to the masses who suffer from it.   If oil markets replace dollars with Euros, it would in time curtail our ability to continue to print, without restraint, the world’s reserve currency.

2006 Ron Paul 3:47
It is an unbelievable benefit to us to import valuable goods and export depreciating dollars.   The exporting countries have become addicted to our purchases for their economic growth.  This dependency makes them allies in continuing the fraud, and their participation keeps the dollar’s value artificially high.   If this system were workable long term, American citizens would never have to work again.   We too could enjoy “bread and circuses” just as the Romans did, but their gold finally ran out and the inability of Rome to continue to plunder conquered nations brought an end to her empire.

2006 Ron Paul 3:48
The same thing will happen to us if we don’t change our ways.   Though we don’t occupy foreign countries to directly plunder, we nevertheless have spread our troops across 130 nations of the world.   Our intense effort to spread our power in the oil-rich Middle East is not a coincidence.   But unlike the old days, we don’t declare direct ownership of the natural resources — we just insist that we can buy what we want and pay for it with our paper money.   Any country that challenges our authority does so at great risk.

2006 Ron Paul 3:49
Once again Congress has bought into the war propaganda against Iran, just as it did against Iraq.   Arguments are now made for attacking Iran economically, and militarily if necessary.    These arguments are all based on the same false reasons given for the ill-fated and costly occupation of Iraq.

2006 Ron Paul 3:50
Our whole economic system depends on continuing the current monetary arrangement, which means recycling the dollar is crucial.   Currently, we borrow over $700 billion every year from our gracious benefactors, who work hard and take our paper for their goods.   Then we borrow all the money we need to secure the empire (DOD budget $450 billion) plus more.   The military might we enjoy becomes the “backing” of our currency.   There are no other countries that can challenge our military superiority, and therefore they have little choice but to accept the dollars we declare are today’s “gold.”   This is why countries that challenge the system — like Iraq, Iran and Venezuela — become targets of our plans for regime change.

2006 Ron Paul 3:51
Ironically, dollar superiority depends on our strong military, and our strong military depends on the dollar.   As long as foreign recipients take our dollars for real goods and are willing to finance our extravagant consumption and militarism, the status quo will continue regardless of how huge our foreign debt and current account deficit become.

2006 Ron Paul 3:52
But real threats come from our political adversaries who are incapable of confronting us militarily, yet are not bashful about confronting us economically.   That’s why we see the new challenge from Iran being taken so seriously.   The urgent arguments about Iran posing a military threat to the security of the United States are no more plausible than the false charges levied against Iraq.   Yet there is no effort to resist this march to confrontation by those who grandstand for political reasons against the Iraq war.

2006 Ron Paul 3:53
It seems that the people and Congress are easily persuaded by the jingoism of the preemptive war promoters.   It’s only after the cost in human life and dollars are tallied up that the people object to unwise militarism.

2006 Ron Paul 3:54
The strange thing is that the failure in Iraq is now apparent to a large majority of American people, yet they and Congress are acquiescing to the call for a needless and dangerous confrontation with Iran.

2006 Ron Paul 3:55
But then again, our failure to find Osama bin Laden and destroy his network did not dissuade us from taking on the Iraqis in a war totally unrelated to 9/11.

2006 Ron Paul 3:56
Concern for pricing oil only in dollars helps explain our willingness to drop everything and teach Saddam Hussein a lesson for his defiance in demanding Euros for oil.

2006 Ron Paul 3:57
And once again there’s this urgent call for sanctions and threats of force against Iran at the precise time Iran is opening a new oil exchange with all transactions in Euros.

2006 Ron Paul 3:58
Using force to compel people to accept money without real value can only work in the short run.   It ultimately leads to economic dislocation, both domestic and international, and always ends with a price to be paid.

2006 Ron Paul 3:59
The economic law that honest exchange demands only things of real value as currency cannot be repealed.   The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value.   We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or Euros.   The sooner the better.

2006 Ron Paul Chapter 4
Before the U.S. House of Representatives  

March 3, 2006
Statement on the “Sunlight Rule”

2006 Ron Paul 4:1
Mr. Speaker, Supreme Court Justice Louis Brandeis famously said, “Sunlight is the best disinfectant.” In order to shine sunlight on the practices of the House of Representatives, and thus restore public trust and integrity to this institution, I am introducing the “Sunlight Rule.” This measure amends House rules to ensure members have adequate time to study a bill before being asked to vote on it. One of the chief causes of increasing public cynicism is the way major pieces of legislation are brought to the floor without members having an opportunity to read the bills. This is particularly a problem with the Appropriations committee conference reports, which are often rushed to the floor of the House in late-night sessions at the end of the year. For example, just this past December the House voted on the fiscal year 2006 Defense Appropriations conference report at approximately four a.m. — just four hours after the report was filed. Yet the report contained language dealing with avian flu, including controversial language regarding immunity liability for vaccine manufacturers, that was added in the House-Senate conference on the bill. Considering legislation on important issues in this manner is a dereliction of our duty as the people’s elected representatives.

2006 Ron Paul 4:2
My proposed rule requires that no piece of legislation, including conference reports, can be brought before the House of Representatives unless it has been available to members and staff both in print and electronic versions for at least ten days. My bill also requires that a manager’s amendment making substantive changes to a bill be available in both printed and electronic forms at least 72 hours before a vote.  While manager’s amendments usually are reserved for technical changes, oftentimes manager’s amendments contain substantive additions to bills in the form of pork.  Members should be made aware of such changes before being asked to vote on a bill.

2006 Ron Paul 4:3
The Sunlight Rule provides the American people the opportunity to be involved in enforcing congressional rules by allowing citizens to move for censure of any Representative who votes for a bill brought to the floor in violation of this act. The Sunlight Rule can never be waived by the Rules committee or House leadership. If an attempt is made to bring a bill to the floor in violation of this rule, any member can raise a point of order requiring the bill to be immediately pulled from the House calendar.

2006 Ron Paul 4:4
Mr. Speaker, the practice of rushing bills to the floor before individual members have a chance to study them contributes to public distrust of Congress. Voting on bills before members read them makes a mockery of representative government and cheats voters who sent us here to make informed decisions on public policy. Adopting the Sunlight Rule is one of the most important changes to House rules this Congress could make to restore public trust and help preserve the integrity of this institution. I hope my colleagues will support this change to House rules.

2006 Ron Paul Chapter 5
Before the U.S. House of Representatives  

March 28, 2006
Making the World Safe for Christianity

2006 Ron Paul 5:1
The top Neo-Con of the twentieth century was Woodrow Wilson.   His supposed idealism, symbolized in the slogan “Make the world safe for democracy,” resulted in untold destruction and death across the world for many decades.   His deceit and manipulation of the pre-war intelligence from Europe dragged America into an unnecessary conflict that cost the world and us dearly.   Without the disastrous Versailles Treaty, World War II could have been averted — and the rise to power of Communists around the world might have been halted.

2006 Ron Paul 5:2
We seem to never learn from our past mistakes.   Today’s neo-cons are as idealistically misled and aggressive in remaking the Middle East as the Wilsonian do-gooders.   Even given the horrendous costs of the Iraq War and the unintended consequences that plague us today, the neo-cons are eager to expand their regime change policy to Iran by force.

2006 Ron Paul 5:3
The obvious shortcomings of our regime change and occupation of Afghanistan are now readily apparent.   The Taliban was ousted from power, but they have regrouped and threaten the delicate stability that now exists in that country.   Opium drug production is once again a major operation, with drugs lords controlling a huge area of the country outside Kabul.   And now the real nature of the government we created has been revealed in the case of Abdul Rahman, the Muslim who faced a possible death sentence from the Karzai administration for converting to Christianity.   Even now that Mr. Rahman is free due to western pressure, his life remains in danger.

2006 Ron Paul 5:4
Our bombs and guns haven’t changed the fact that the new puppet Afghan government still follows Sharia law.   The same loyalty to Sharia exists in Iraq, where we’re trying so hard to stabilize things.   And all this is done in the name of spreading democracy.

2006 Ron Paul 5:5
The sad fact is that even under the despicable rule of Saddam Hussein, Christians were safer in Iraq than they are today.   Saddam Hussein’s foreign minister was a practicing Christian.   Today thousands of Christians have fled Iraq following our occupation, to countries like Jordan and Syria.   Those Christians who have remained in Iraq fear for their lives every day.   That should tell us something about the shortcomings of a policy that presumes to make the world safe for democracy.

2006 Ron Paul 5:6
The Muslim world is not fooled by our talk about spreading democracy and values.   The evidence is too overwhelming that we do not hesitate to support dictators and install puppet governments when it serves our interests.   When democratic elections result in the elevation of a leader or party not to our liking, we do not hesitate for a minute to undermine that government.   This hypocrisy is rarely recognized by the American people.   It’s much more comfortable to believe in slogans, to believe that we’re defending our goodness and spreading true liberty.   We accept this and believe strongly in the cause, strongly enough to sacrifice many of our sons and daughters, and stupendous amounts of money, to spread our ideals through force.

2006 Ron Paul 5:7
Pointing out the lack of success is taboo.   It seems of little concern to many members of Congress that we lack both the moral right and constitutional authority to impose our will on other nations.

2006 Ron Paul 5:8
The toughest task is analyzing what we do from their perspective.   We should try harder to place ourselves in the shoes of those who live in the Arab countries where our efforts currently are concentrated.   We are outraged by a Muslim country that would even consider the death penalty for a Christian convert.   But many Muslims see all that we do as a reflection of western Christianity, which to them includes Europe and America.   They see everything in terms of religion.

2006 Ron Paul 5:9
When our bombs and sanctions kill hundreds of thousands of their citizens, they see it as an attack on their religion by Christians.   To them our actions represent a crusade to change their culture and their political systems.   They do not see us as having noble intentions.   Cynicism and realism tell them we’re involved in the Middle East to secure the oil we need.

2006 Ron Paul 5:10
Our occupation and influence in the holy lands of the Middle East will always be suspect.   This includes all the countries of the Arabian Peninsula, Iran, Iraq, and Afghanistan.   Naively believing otherwise will guarantee continuing hostilities in Iraq.   Our meddling will remain an incitement for radicals to strike us here at home in future terrorist attacks.   All the intelligence gathering in the world will serve little purpose if we don’t come to understand exactly why they hate us — despite the good intentions that many Americans hold dear.

2006 Ron Paul Chapter 6
Before the U.S. House of Representatives  

March 29, 2006
Statement on HR 609, the “Academic Bill of Rights”

2006 Ron Paul 6:1
Mr. Speaker, anyone needing proof that federal funding leads to federal control should examine HR 609, the “College Access and Opportunity Act.”  HR 609 imposes several new federal mandates on colleges, and extends numerous existing mandates.  HR 609 proves the prophetic soundness of warnings that federal higher education programs would lead to federal control of higher education.

2006 Ron Paul 6:2
Opponents of increased federalization of higher education should be especially concerned about HR 609’s “Academic Bill of Rights.” This provision takes a step toward complete federal control of college curricula, grading, and teaching practices. While the provision is worded as a “sense of Congress,” the clear intent is to intimidate college administrators into ensuring professors’ lectures and lesson plans meet with federal approval.

2006 Ron Paul 6:3
The “Academic Bill of Rights” is a response to concerns that federally-funded institutions of higher learner are refusing to allow students to express, or even be exposed to, points of view that differ from those held by their professors. Ironically, the proliferation of  “political correctness” on college campuses is largely a direct result of increased government funding of colleges and universities. Federal funding has isolated institutions of higher education from market discipline, thus freeing professors to promulgate their particular views regardless of whether it benefits their students (who are, after all, the professors’ customers). Now, in a perfect illustration of how politicians use problems created by previous interventions in the market to justify new interventions, Congress proposes to use the problem of “political correctness” to justify more federal control over college classrooms.

2006 Ron Paul 6:4
Instead of fostering open dialogue and wide-raging intellectual inquiry, the main effect of the “Academic Bill of Rights” will be to further stifle debate about controversial topics. This is because many administrators will order their professors not to discuss contentious and divisive subjects, in order to avoid a possible confrontation with the federal government. Those who doubt this should remember that many TV and radio stations minimized political programming in the 1960s and 1970s in order to avoid running afoul of the federal “fairness doctrine.”

2006 Ron Paul 6:5
 I am convinced some promoters of the “Academic Bill of Rights” would be perfectly happy if, instead of fostering greater debate, this bill silences discussion of certain topics. Scan the websites of some of the organizations promoting the “Academic Bill of Rights” and you will find calls for silencing critics of the Iraq war and other aspects of American foreign policy.

2006 Ron Paul 6:6
Mr. Speaker, HR 609 expands federal control over higher education; in particular through an “Academic Bill of Rights” which could further stifle debate and inquiry on America’s college campus. Therefore, I urge my colleagues to reject this bill.

2006 Ron Paul Chapter 7
Before the U.S. House of Representatives  

March 30, 2006
A Tribute to the Late Harry Browne

2006 Ron Paul 7:1
Mr. Speaker, America lost a great champion of liberty when Harry Browne passed away on March 1, at the age of 72. Harry had a passion for liberty and knowledge of a wide variety of subjects. His communication style, as he himself so marvelously put it, focused on converting his opponents rather than winning the argument. These attributes helped make him one of the most effective proponents of the freedom philosophy I have had the privilege of knowing. Harry’s numerous books and columns, his radio and internet broadcasts, and his speeches educated millions in sound economics and the benefits of a free society. Harry motivated many people to become activists in the movement to restore American liberties.

2006 Ron Paul 7:2
Harry first came to public attention in the 1970 when he penned a best-selling investment book, How You Can Profit From the Coming Devaluation , which foresaw President Richard Nixon’s abandonment of the gold standard and the ways the American economy would be damaged by the inevitable resulting inflation. Harry’s book helped many Americans survive, and even profit, during the economic troubles of the seventies. It also introduced millions of people to the insights developed by followers of the Austrian school of economics regarding the dangers fiat currency poses to both prosperity and liberty posed by fiat. How You Can Profit From the Coming Devaluation is generally recognized as the founding document of the hard money movement, which combined the insights of the Austrian economists with a practical investment strategy.

2006 Ron Paul 7:3
Harry’s third book, You Can Profit from a Monetary Crisi s, reached number one on the New York Times bestseller list. Other popular books by Harry include How I Found Freedom in an Unfree World , The Great Libertarian Offer, and Why Government Doesn’t Work. I was pleased to write the foreword for one of Harry’s books, Liberty A-Z: Libertarian Soundbites You Can Use Right Now , a collection of direct, thought-provoking, and often humorous responses to the questions advocates of the freedom philosophy face.

2006 Ron Paul 7:4
During the nineties, Harry worked to advance liberty as a presidential candidate, columnist, and radio talk-show host.  He also hosted an internet-based talk show and founded DownsizeDC, a grassroots advocacy group whose goals are accurately summed up in its title. Even while struggling with Lou Gehrig’s disease, Harry maintained a full schedule of writing, hosting his radio show, and speaking around the country.

2006 Ron Paul 7:5
Harry’s efforts were not limited to the economic realm. He understood the threat to liberty and prosperity posed by global crusades for democracy, as well as the importance of opposing restrictions on civil liberties. Harry’s outspoken defense of civil liberties and the Framers’ foreign policy of nonintervention took on added importance in the last years of his life.  Unlike many self-styled advocates of liberty, Harry Browne never attempted to curry favor with the political establishment by focusing solely on issues of economic liberty.  He never combined advocacy of low taxes and regulations with active support for militarism and restrictions on personal liberty.

2006 Ron Paul 7:6
In all his educational, financial, and political work Harry served as a model for everyone who works for the free society. Harry was principled and uncompromising in message, while temperate and respectful of differing opinions in delivery. He avoided the histrionics too common in our today’s talk show culture, and he never personalized his arguments. Even when an opponent resorted to ad hominem attacks, Harry always kept his presentation on the high ground of ideas and principles. In conclusion, Mr. Speaker, I extend my sympathy to Harry Browne’s wife, Pamela, and daughter Autumn, as well as the many he befriend in his years in the freedom movement.  I pay tribute to Harry Browne for his lifelong efforts on behalf of individual liberty.

2006 Ron Paul Chapter 8
Before the U.S. House of Representatives  

April 5, 2006
Iran: The Next Neocon Target

2006 Ron Paul 8:1
It’s been three years since the U.S. launched its war against Saddam Hussein and his weapons of mass destruction.   Of course now almost everybody knows there were no WMDs, and Saddam Hussein posed no threat to the United States.   Though some of our soldiers serving in Iraq still believe they are there because Saddam Hussein was involved in 9/11, even the administration now acknowledges there was no connection.   Indeed, no one can be absolutely certain why we invaded Iraq.   The current excuse, also given for staying in Iraq, is to make it a democratic state, friendly to the United States.   There are now fewer denials that securing oil supplies played a significant role in our decision to go into Iraq and stay there.   That certainly would explain why U.S. taxpayers are paying such a price to build and maintain numerous huge, permanent military bases in Iraq.   They’re also funding a new billion dollar embassy- the largest in the world.

2006 Ron Paul 8:2
The significant question we must ask ourselves is: What have we learned from three years in Iraq?   With plans now being laid for regime change in Iran, it appears we have learned absolutely nothing.   There still are plenty of administration officials who daily paint a rosy picture of the Iraq we have created.   But I wonder: If the past three years were nothing more than a bad dream, and our nation suddenly awakened, how many would, for national security reasons, urge the same invasion?   Would we instead give a gigantic sigh of relief that it was only a bad dream, that we need not relive the three-year nightmare of death, destruction, chaos and stupendous consumption of tax dollars.   Conceivably we would still see oil prices under $30 a barrel, and most importantly, 20,000 severe U.S. causalities would not have occurred.   My guess is that 99% of all Americans would be thankful it was only a bad dream, and would never support the invasion knowing what we know today.

2006 Ron Paul 8:3
Even with the horrible results of the past three years, Congress is abuzz with plans to change the Iranian government.   There is little resistance to the rising clamor for “democratizing” Iran, even though their current president, Mahmoud Almadinejad, is an elected leader.   Though Iran is hardly a perfect democracy, its system is far superior to most of our Arab allies about which we never complain.   Already the coordinating propaganda has galvanized the American people against Iran for the supposed threat it poses to us with weapons of mass destruction that are no more present than those Saddam Hussein was alleged to have had.   It’s amazing how soon after being thoroughly discredited over the charges levied against Saddam Hussein the Neo-cons are willing to use the same arguments against Iran.   It’s frightening to see how easily Congress, the media, and the people accept many of the same arguments against Iran that were used to justify an invasion of Iraq.  

2006 Ron Paul 8:4
Since 2001 we have spent over $300 billion, and occupied two Muslim nations — Afghanistan and Iraq.   We’re poorer but certainly not safer for it.   We invaded Afghanistan to get Osama bin Laden, the ring leader behind 9/11.   This effort has been virtually abandoned.   Even though the Taliban was removed from power in Afghanistan, most of the country is now occupied and controlled by warlords who manage a drug trade bigger than ever before.   Removing the Taliban from power in Afghanistan actually served the interests of Iran, the Taliban’s arch enemy, more than our own.

2006 Ron Paul 8:5
The longtime Neo-con goal to remake Iraq prompted us to abandon the search for Osama bin Laden.   The invasion of Iraq in 2003 was hyped as a noble mission, justified by misrepresentations of intelligence concerning Saddam Hussein and his ability to attack us and his neighbors.   This failed policy has created the current chaos in Iraq — chaos that many describe as a civil war.   Saddam Hussein is out of power and most people are pleased.   Yet some Iraqis, who dream of stability, long for his authoritarian rule.   But once again, Saddam Hussein’s removal benefited the Iranians, who consider Saddam Hussein an arch enemy.

2006 Ron Paul 8:6
Our obsession with democracy — which is clearly conditional, when one looks at our response to the recent Palestinian elections — will allow the majority Shia to claim leadership title if Iraq’s election actually leads to an organized government.   This delights the Iranians, who are close allies of the Iraqi Shia.

2006 Ron Paul 8:7
Talk about unintended consequences!   This war has produced chaos, civil war, death and destruction, and huge financial costs.   It has eliminated two of Iran’s worst enemies and placed power in Iraq with Iran’s best friends.   Even this apparent failure of policy does nothing to restrain the current march toward a similar confrontation with Iran.   What will it take for us to learn from our failures?

2006 Ron Paul 8:8
Common sense tells us the war in Iraq soon will spread to Iran.   Fear of imaginary nuclear weapons or an incident involving Iran — whether planned or accidental — will rally the support needed for us to move on Muslim country #3.   All the past failures and unintended consequences will be forgotten.

2006 Ron Paul 8:9
Even with deteriorating support for the Iraq war, new information, well planned propaganda, or a major incident will override the skepticism and heartache of our frustrating fight.   Vocal opponents of an attack on Iran again will be labeled unpatriotic, unsupportive of the troops, and sympathetic to Iran’s radicals.

2006 Ron Paul 8:10
Instead of capitulating to these charges, we should point out that those who maneuver us into war do so with little concern for our young people serving in the military, and theoretically think little of their own children if they have any.   It’s hard to conceive that political supporters of the war would consciously claim that a pre-emptive war for regime change, where young people are sacrificed, is only worth it if the deaths and injuries are limited to other people’s children.   This, I’m sure, would be denied — which means their own children are technically available for this sacrifice that is so often praised and glorified for the benefit of the families who have lost so much.   If so, they should think more of their own children.   If this is not so, and their children are not available for such sacrifice, the hypocrisy is apparent.   Remember, most Neo-con planners fall into the category of chicken-hawks.

2006 Ron Paul 8:11
For the past 3 years it’s been inferred that if one is not in support of the current policy, one is against the troops and supports the enemy.   Lack of support for the war in Iraq was said to be supportive of Saddam Hussein and his evil policies.   This is an insulting and preposterous argument.   Those who argued for the containment of the Soviets were never deemed sympathetic to Stalin or Khrushchev.   Lack of support for the Iraq war should never be used as an argument that one was sympathetic to Saddam Hussein.   Containment and diplomacy are far superior to confronting a potential enemy, and are less costly and far less dangerous — especially when there’s no evidence that our national security is being threatened.

2006 Ron Paul 8:12
Although a large percentage of the public now rejects the various arguments for the Iraq war, 3 years ago they were easily persuaded by the politicians and media to fully support the invasion.   Now, after 3 years of terrible pain for so many, even the troops are awakening from their slumber and sensing the fruitlessness of our failing effort.   Seventy-two percent of our troops now serving in Iraq say it’s time to come home, yet the majority still cling to the propaganda that we’re there because of 9/11 attacks, something even the administration has ceased to claim.   Propaganda is pushed on our troops to exploit their need to believe in a cause that’s worth the risk to life and limb.

2006 Ron Paul 8:13
I smell an expanded war in the Middle East, and pray that I’m wrong.   I sense that circumstances will arise that demand support regardless of the danger and cost.   Any lack of support, once again, will be painted as being soft on terrorism and al Qaeda.   We will be told we must support Israel, support patriotism, support the troops, and defend freedom.   The public too often only smells the stench of war after the killing starts.   Public objection comes later on, but eventually it helps to stop the war.   I worry that before we can finish the war we’re in and extricate ourselves, the patriotic fervor for expanding into Iran will drown out the cries of, “enough already!”

2006 Ron Paul 8:14
The agitation and congressional resolutions painting Iran as an enemy about to attack us have already begun.   It’s too bad we can’t learn from our mistakes.

2006 Ron Paul 8:15
This time there will be a greater pretense of an international effort sanctioned by the UN before the bombs are dropped.   But even without support from the international community, we should expect the plan for regime change to continue.   We have been forewarned that “all options” remain on the table.   And there’s little reason to expect much resistance from Congress.   So far there’s less resistance expressed in Congress for taking on Iran than there was prior to going into Iraq.   It’s astonishing that after three years of bad results and tremendous expense there’s little indication we will reconsider our traditional non-interventionist foreign policy.   Unfortunately, regime change, nation building, policing the world, and protecting “our oil” still constitute an acceptable policy by the leaders of both major parties.

2006 Ron Paul 8:16
It’s already assumed by many in Washington I talk to that Iran is dead serious about obtaining a nuclear weapon, and is a much more formidable opponent than Iraq.   Besides, Mahmoud Almadinjad threatened to destroy Israel and that cannot stand.  Washington sees Iran as a greater threat than Iraq ever was, a threat that cannot be ignored.  

2006 Ron Paul 8:17
Iran’s history is being ignored, just as we ignored Iraq’s history.   This ignorance or deliberate misrepresentation of our recent relationship to Iraq and Iran is required to generate the fervor needed to attack once again a country that poses no threat to us.   Our policies toward Iran have been more provocative than those towards Iraq.   Yes, President Bush labeled Iran part of the axis of evil and unnecessarily provoked their anger at us.   But our mistakes with Iran started a long time before this president took office.

2006 Ron Paul 8:18
In 1953 our CIA, with help of the British, participated in overthrowing the democratic elected leader, Mohamed Mossedech.   We placed the Shah in power.   He ruled ruthlessly but protected our oil interests, and for that we protected him — that is until 1979.   We even provided him with Iran’s first nuclear reactor.   Evidently we didn’t buy the argument that his oil supplies precluded a need for civilian nuclear energy.   From 1953 to 1979 his authoritarian rule served to incite a radical Muslim opposition led by the Ayatollah Khomeini, who overthrew the Shah and took our hostages in 1979.   This blowback event was slow in coming, but Muslims have long memories. The hostage crisis and overthrow of the Shah by the Ayatollah was a major victory for the radical Islamists.   Most Americans either never knew about or easily forgot our unwise meddling in the internal affairs of Iran in 1953.

2006 Ron Paul 8:19
During the 1980s we further antagonized Iran by supporting the Iraqis in their invasion of Iran.   This made our relationship with Iran worse, while sending a message to Saddam Hussein that invading a neighboring country is not all that bad.   When Hussein got the message from our State Department that his plan to invade Kuwait was not of much concern to the United States he immediately proceeded to do so.   We in a way encouraged him to do it almost like we encouraged him to go into Iran.   Of course this time our reaction was quite different, and all of a sudden our friendly ally Saddam Hussein became our arch enemy.   The American people may forget this flip-flop, but those who suffered from it never forget.   And the Iranians remember well our meddling in their affairs.   Labeling the Iranians part of the axis of evil further alienated them and contributed to the animosity directed toward us.

2006 Ron Paul 8:20
For whatever reasons the Neo-conservatives might give, they are bound and determined to confront the Iranian government and demand changes in its leadership.   This policy will further spread our military presence and undermine our security.   The sad truth is that the supposed dangers posed by Iran are no more real than those claimed about Iraq.   The charges made against Iran are unsubstantiated, and amazingly sound very similar to the false charges made against Iraq.   One would think promoters of the war against Iraq would be a little bit more reluctant to use the same arguments to stir up hatred toward Iran.   The American people and Congress should be more cautious in accepting these charges at face value.   Yet it seems the propaganda is working, since few in Washington object as Congress passes resolutions condemning Iran and asking for UN sanctions against her.

2006 Ron Paul 8:21
There is no evidence of a threat to us by Iran, and no reason to plan and initiate a confrontation with her.   There are many reasons not to do so, however.

2006 Ron Paul 8:22
Iran does not have a nuclear weapon and there’s no evidence that she is working on one — only conjecture.

2006 Ron Paul 8:23
If Iran had a nuclear weapon, why would this be different from Pakistan, India, and North Korea having one?   Why does Iran have less right to a defensive weapon than these other countries?

2006 Ron Paul 8:24
If Iran had a nuclear weapon, the odds of her initiating an attack against anybody — which would guarantee her own annihilation — are zero.   And the same goes for the possibility she would place weapons in the hands of a non-state terrorist group.

2006 Ron Paul 8:25
Pakistan has spread nuclear technology throughout the world, and in particular to the North Koreans.   They flaunt international restrictions on nuclear weapons.   But we reward them just as we reward India.

2006 Ron Paul 8:26
We needlessly and foolishly threaten Iran even though they have no nuclear weapons.   But listen to what a leading Israeli historian, Martin Van Creveld, had to say about this: “Obviously, we don’t want Iran to have a nuclear weapon, and I don’t know if they’re developing them, but if they’re not developing them, they’re crazy.”

2006 Ron Paul 8:27
There’s been a lot of misinformation regarding Iran’s nuclear program.   This distortion of the truth has been used to pump up emotions in Congress to pass resolutions condemning her and promoting UN sanctions.

2006 Ron Paul 8:28
IAEA Director General Mohamed El Baradi has never reported any evidence of “undeclared” sources or special nuclear material in Iran, or any diversion of nuclear material.

2006 Ron Paul 8:29
We demand that Iran prove it is not in violation of nuclear agreements, which is asking them impossibly to prove a negative.   El Baradi states Iran is in compliance with the nuclear NPT required IAEA safeguard agreement.

2006 Ron Paul 8:30
We forget that the weapons we feared Saddam Hussein had were supplied to him by the U.S., and we refused to believe UN inspectors and the CIA that he no longer had them.

2006 Ron Paul 8:31
Likewise, Iran received her first nuclear reactor from us. Now we’re hysterically wondering if someday she might decide to build a bomb in self interest.

2006 Ron Paul 8:32
Anti-Iran voices, beating the drums of confrontation, distort the agreement made in Paris and the desire of Iran to restart the enrichment process.   Their suspension of the enrichment process was voluntary, and not a legal obligation.   Iran has an absolute right under the NPT to develop and use nuclear power for peaceful purposes, and this is now said to be an egregious violation of the NPT.   It’s the U.S. and her allies that are distorting and violating the NPT.   Likewise our provision of nuclear materials to India is a clear violation of the NPT.

2006 Ron Paul 8:33
The demand for UN sanctions is now being strongly encouraged by Congress.   The “Iran Freedom Support Act,” HR 282, passed in the International Relations Committee; and recently the House passed H Con Res 341, which inaccurately condemned Iran for violating its international nuclear non-proliferation obligations.   At present, the likelihood of reason prevailing in Congress is minimal.   Let there be no doubt: The Neo-conservative warriors are still in charge, and are conditioning Congress, the media, and the American people for a pre-emptive attack on Iran.   Never mind that Afghanistan has unraveled and Iraq is in civil war: serious plans are being laid for the next distraction which will further spread this war in the Middle East.   The unintended consequences of this effort surely will be worse than any of the complications experienced in the three-year occupation of Iraq.

2006 Ron Paul 8:34
Our offer of political and financial assistance to foreign and domestic individuals who support the overthrow of the current Iranian government is fraught with danger and saturated with arrogance.   Imagine how American citizens would respond if China supported similar efforts here in the United States to bring about regime change!   How many of us would remain complacent if someone like Timothy McVeigh had been financed by a foreign power?   Is it any wonder the Iranian people resent us and the attitude of our leaders?   Even though El Baradi and his IAEA investigations have found no violations of the NPT-required IAEA safeguards agreement, the Iran Freedom Support Act still demands that Iran prove they have no nuclear weapons — refusing to acknowledge that proving a negative is impossible.

2006 Ron Paul 8:35
Let there be no doubt, though the words “regime change” are not found in the bill — that’s precisely what they are talking about.   Neo-conservative Michael Ledeen, one of the architects of the Iraq fiasco, testifying before the International Relations Committee in favor of the IFSA, stated it plainly:   “I know some Members would prefer to dance around the explicit declaration of regime change as the policy of this country, but anyone looking closely at the language and context of the IFSA and its close relative in the Senate, can clearly see that this is in fact the essence of the matter.   You can’t have freedom in Iran without bringing down the Mullahs.”

2006 Ron Paul 8:36
Sanctions, along with financial and political support to persons and groups dedicated to the overthrow of the Iranian government, are acts of war.   Once again we’re unilaterally declaring a pre-emptive war against a country and a people that have not harmed us and do not have the capacity to do so.   And don’t expect Congress to seriously debate a declaration of war resolution.   For the past 56 years Congress has transferred to the executive branch the power to go to war as it pleases, regardless of the tragic results and costs.

2006 Ron Paul 8:37
Secretary of State Rice recently signaled a sharp shift towards confrontation in Iran policy as she insisted on $75 million to finance propaganda, through TV and radio broadcasts into Iran.   She expressed this need because of the so-called “aggressive” policies of the Iranian government.   We’re seven thousand miles from home, telling the Iraqis and the Iranians what kind of government they will have, backed up by the use of our military force, and we call them the aggressors.   We fail to realize the Iranian people, for whatever faults they may have, have not in modern times aggressed against any neighbor.   This provocation is so unnecessary, costly, and dangerous.

2006 Ron Paul 8:38
Just as the invasion of Iraq inadvertently served the interests of the Iranians, military confrontation with Iran will have unintended consequences.   The successful alliance engendered between the Iranians and the Iraqi majority Shia will prove a formidable opponent for us in Iraq as that civil war spreads.   Shipping in the Persian Gulf through the Straits of Hormuz may well be disrupted by the Iranians in retaliation for any military confrontation.   Since Iran would be incapable of defending herself by conventional means, it seems logical that some might resort to a terrorist attack on us.   They will not passively lie down, nor can they be destroyed easily.

2006 Ron Paul 8:39
One of the reasons given for going into Iraq was to secure “our” oil supply.   This backfired badly: Production in Iraq is down 50%, and world oil prices have more than doubled to $60 per barrel.   Meddling with Iran could easily have a similar result.   We could see oil over $120 a barrel and, and $6 gas at the pump.   The obsession the Neo-cons have with remaking the Middle East is hard to understand.   One thing that is easy to understand is none of those who planned these wars expect to fight in them, nor do they expect their children to die in some IED explosion.

2006 Ron Paul 8:40
Exactly when an attack will occur is not known, but we have been forewarned more than once that all options remain on the table.   The sequence of events now occurring with regards to Iran are eerily reminiscent of the hype prior to our pre-emptive strike against Iraq.   We should remember the saying:   “Fool me once shame on you, fool me twice, shame on me.”   It looks to me like the Congress and the country is open to being fooled once again.

2006 Ron Paul 8:41
Interestingly, many early supporters of the Iraq war are now highly critical of the President, having been misled as to reasons for the invasion and occupation.   But these same people are only too eager to accept the same flawed arguments for our need to undermine the Iranian government.

2006 Ron Paul 8:42
The President’s 2006 National Security Strategy, just released, is every bit as frightening as the one released in 2002 endorsing pre-emptive war.   In it he claims:   “We face no greater challenge from a single country than from Iran.”   He claims the Iranians have for 20 years hidden key nuclear activities — though the IAEA makes no such assumptions nor has the Security Council in these 20 years ever sanctioned Iran.   The clincher in the National Security Strategy document is if diplomatic efforts fail, confrontation will follow.   The problem is the diplomatic effort — if one wants to use that term — is designed to fail by demanding the Iranians prove an unproveable negative.   The West — led by the U.S. — is in greater violation by demanding Iran not pursue any nuclear technology, even peaceful, that the NPT guarantees is their right.

2006 Ron Paul 8:43
The President states:   Iran’s “desire to have a nuclear weapon is unacceptable.”   A “desire” is purely subjective, and cannot be substantiated nor disproved.   Therefore all that is necessary to justify an attack is if Iran fails to prove it doesn’t have a “desire” to be like the United States, China, Russia, Britain, France, Pakistan, India, and Israel—whose nuclear missiles surround Iran.   Logic like this to justify a new war, without the least consideration for a congressional declaration of war, is indeed frightening.

2006 Ron Paul 8:44
Common sense tells us Congress, especially given the civil war in Iraq and the mess in Afghanistan, should move with great caution in condoning a military confrontation with Iran.

2006 Ron Paul 8:45
Cause for Concern Most Americans are uninterested in foreign affairs until we get mired down in a war that costs too much, last too long, and kills too many U.S. troops.   Getting out of a lengthy war is difficult, as I remember all too well with Vietnam while serving in the U.S. Air Force from 1963 to 1968.   Getting into war is much easier.   Unfortunately the Legislative branch of our government too often defers to the Executive branch, and offers little resistance to war plans even with no significant threat to our security.   The need to go to war is always couched in patriotic terms and falsehoods regarding an imaginary eminent danger.   Not supporting the effort is painted as unpatriotic and wimpish against some evil that’s about to engulf us.   The real reason for our militarism is rarely revealed and hidden from the public.   Even Congress is deceived into supporting adventurism they would not accept if fully informed.

2006 Ron Paul 8:46
If we accepted the traditional American and constitutional foreign policy of non-intervention across the board, there would be no temptation to go along with these unnecessary military operations.   A foreign policy of intervention invites all kinds of excuses for spreading ourselves around the world.   The debate shifts from non-intervention versus interventionism, to where and for what particular reason should we involve ourselves.   Most of the time it’s for less than honorable reasons.   Even when cloaked in honorable slogans — like making the world safe for democracy — the unintended consequences and the ultimate costs cancel out the good intentions.

2006 Ron Paul 8:47
One of the greatest losses suffered these past 60 years from interventionism becoming an acceptable policy of both major parties is respect for the Constitution.   Congress flatly has reneged on its huge responsibility to declare war.   Going to war was never meant to be an Executive decision, used indiscriminately with no resistance from Congress.   The strongest attempt by Congress in the past 60 years to properly exert itself over foreign policy was the passage of the Foley Amendment, demanding no assistance be given to the Nicaraguan contras.   Even this explicit prohibition was flaunted by an earlier administration.

2006 Ron Paul 8:48
Arguing over the relative merits of each intervention is not a true debate, because it assumes that intervention per se is both moral and constitutional.   Arguing for a Granada-type intervention because of its “success,” and against the Iraq war because of its failure and cost, is not enough.   We must once again understand the wisdom of rejecting entangling alliances and rejecting nation building.   We must stop trying to police the world and instead embrace non-interventionism as the proper, moral, and constitutional foreign policy.

2006 Ron Paul 8:49
The best reason to oppose interventionism is that people die, needlessly, on both sides.   We have suffered over 20,000 American casualties in Iraq already, and Iraq civilian deaths probably number over 100,000 by all reasonable accounts.   The next best reason is that the rule of law is undermined, especially when military interventions are carried out without a declaration of war.   Whenever a war is ongoing, civil liberties are under attack at home.   The current war in Iraq and the misnamed war on terror have created an environment here at home that affords little constitutional protection of our citizen’s rights.   Extreme nationalism is common during wars.   Signs of this are now apparent.

2006 Ron Paul 8:50
Prolonged wars, as this one has become, have profound consequences.   No matter how much positive spin is put on it, war never makes a society wealthier.   World War II was not a solution to the Depression as many claim.   If a billion dollars is spent on weapons of war, the GDP records positive growth in that amount.    But the expenditure is consumed by destruction of the weapons or bombs it bought, and the real economy is denied $1 billion to produce products that would have raised someone’s standard of living.

2006 Ron Paul 8:51
Excessive spending to finance the war causes deficits to explode. There are never enough tax dollars available to pay the bills, and since there are not enough willing lenders and dollars available, the Federal Reserve must create enough new money and credit for buying Treasury Bills to prevent interest rates from rising too rapidly.   Rising rates would tip off everyone that there are not enough savings or taxes to finance the war.   This willingness to print whatever amount of money the government needs to pursue the war is literally inflation.   Without a fiat monetary system wars would be very difficult to finance, since the people would never tolerate the taxes required to pay for it.   Inflation of the money supply delays and hides the real cost of war.   The result of the excessive creation of new money leads to the higher cost of living everyone decries and the Fed denies.   Since taxes are not levied, the increase in prices that results from printing too much money is technically the tax required to pay for the war.

2006 Ron Paul 8:52
The tragedy is that the inflation tax is borne more by the poor and the middle class than the rich.   Meanwhile, the well-connected rich, the politicians, the bureaucrats, the bankers, the military industrialists, and the international corporations reap the benefits of war profits.

2006 Ron Paul 8:53
A sound economic process is disrupted with a war economy and monetary inflation.   Strong voices emerge blaming the wrong policies for our problems, prompting an outcry for protectionist legislation.   It’s always easier to blame foreign producers and savers for our inflation, lack of savings, excess debt, and loss of industrial jobs.   Protectionist measures only make economic conditions worse.   Inevitably these conditions, if not corrected, lead to a lower standard of living for most of our citizens.

2006 Ron Paul 8:54
Careless military intervention is also bad for the civil disturbance that results.   The chaos in the streets of America in the 1960s while the Vietnam War raged, aggravated by the draft, was an example of domestic strife caused by an ill-advised unconstitutional war that could not be won.   The early signs of civil discord are now present.   Hopefully we can extricate ourselves from Iraq and avoid a conflict in Iran before our streets explode as they did in the 60s.

2006 Ron Paul 8:55
In a way it’s amazing there’s not a lot more outrage expressed by the American people.   There’s plenty of complaining but no outrage over policies that are not part of our American tradition.   War based on false pretenses, 20,000 American casualties, torture policies, thousands jailed without due process, illegal surveillance of citizens, warrantless searches, and yet no outrage.   When the issues come before Congress, Executive authority is maintained or even strengthened while real oversight is ignored.

2006 Ron Paul 8:56
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 allows us to avoid the pain of high taxes to pay for our war and welfare spending.   It’s fine until the music stops and the real costs are realized, with much higher interest rates and significant price inflation.   That’s when outrage will be heard, and the people will realize we can’t afford the “humanitarianism” of the Neo-conservatives.

2006 Ron Paul 8:57
The notion that our economic problems are principally due to the Chinese is nonsense.  If the protectionists were to have their way, the problem of financing the war would become readily apparent and have immediate ramifications — none good.   Today’s economic problems, caused largely by our funny money system, won’t be solved by altering exchange rates to favor us in the short run, or by imposing high tariffs.   Only sound money with real value will solve the problems of competing currency devaluations and protectionist measures.

2006 Ron Paul 8:58
Economic interests almost always are major reasons for wars being fought.   Noble and patriotic causes are easier to sell to a public who must pay and provide cannon fodder to defend the financial interests of a privileged class.

2006 Ron Paul 8:59
The fact that Saddam Hussein demanded Euros for oil in an attempt to undermine the U.S. dollar is believed by many to be one of the ulterior motives for our invasion and occupation of Iraq.   Similarly, the Iranian oil burse now about to open may be seen as a threat to those who depend on maintaining the current monetary system with the dollar as the world’s reserve currency.

2006 Ron Paul 8:60
The theory and significance of “peak oil” is believed to be an additional motivating factor for the U.S. and Great Britain wanting to maintain firm control over the oil supplies in the Middle East.   The two nations have been protecting   “our” oil interests in the Middle East for nearly a hundred years. With diminishing supplies and expanding demands, the incentive to maintain a military presence in the Middle East is quite strong.   Fear of China and Russia moving into this region to assume more control alarms those who don’t understand how a free market can develop substitutes to replace diminishing resources.   Supporters of the military effort to maintain control over large regions of the world to protect oil fail to count the real costs once the DOD budget is factored in.   Remember, invading Iraq was costly and oil prices doubled.   Confrontation in Iran may evolve differently, but we can be sure it will be costly and oil prices will rise.

2006 Ron Paul 8:61
There are long-term consequences or blowback from our militant policy of intervention around the world.   They are unpredictable as to time and place.   9/11 was a consequence of our military presence on Muslim holy lands; the Ayatollah Khomeini’s success in taking over the Iranian government in 1979 was a consequence of our CIA overthrowing Mossadech in 1953.   These connections are rarely recognized by the American people and never acknowledged by our government.   We never seem to learn how dangerous interventionism is to us and to our security.

2006 Ron Paul 8:62
There are some who may not agree strongly with any of my arguments, and instead believe the propaganda:   Iran and her President, Mahmoud Almadinjad, are thoroughly irresponsible and have threatened to destroy Israel. So all measures must be taken to prevent Iran from getting nukes — thus the campaign to intimidate and confront Iran.  

2006 Ron Paul 8:63
First, Iran doesn’t have a nuke and is nowhere close to getting one, according to the CIA.   If they did have one, using it would guarantee almost instantaneous annihilation by Israel and the United States.   Hysterical fear of Iran is way out of proportion to reality.   With a policy of containment, we stood down and won the Cold War against the Soviets and their 30,000 nuclear weapons and missiles.   If you’re looking for a real kook with a bomb to worry about, North Korea would be high on the list.   Yet we negotiate with Kim Jong Il.   Pakistan has nukes and was a close ally of the Taliban up until 9/11.   Pakistan was never inspected by the IAEA as to their military capability.   Yet we not only talk to her, we provide economic assistance — though someday Musharraf may well be overthrown and a pro-al Qaeda government put in place.   We have been nearly obsessed with talking about regime change in Iran, while ignoring Pakistan and North Korea.   It makes no sense and it’s a very costly and dangerous policy.

2006 Ron Paul 8:64
The conclusion we should derive from this is simple: It’s in our best interest to pursue a foreign policy of non-intervention.   A strict interpretation of the Constitution mandates it.   The moral imperative of not imposing our will on others, no matter how well intentioned, is a powerful argument for minding our own business.   The principle of self-determination should be respected.   Strict non-intervention removes the incentives for foreign powers and corporate interests to influence our policies overseas.   We can’t afford the cost that intervention requires, whether through higher taxes or inflation.   If the moral arguments against intervention don’t suffice for some, the practical arguments should.

2006 Ron Paul 8:65
Intervention just doesn’t work.   It backfires and ultimately hurts American citizens both at home and abroad.   Spreading ourselves too thin around the world actually diminishes our national security through a weakened military.   As the superpower of the world, a constant interventionist policy is perceived as arrogant, and greatly undermines our ability to use diplomacy in a positive manner.

2006 Ron Paul 8:66
Conservatives, libertarians, constitutionalists, and many of today’s liberals have all at one time or another endorsed a less interventionist foreign policy.   There’s no reason a coalition of these groups might not once again present the case for a pro-American, non-militant, non-interventionist foreign policy dealing with all nations.   A policy of trade and peace, and a willingness to use diplomacy, is far superior to the foreign policy that has evolved over the past 60 years.

2006 Ron Paul 8:67
It’s time for a change.

2006 Ron Paul Chapter 9
Before the U.S. House of Representatives  

April 25, 2006
What the Price of Gold is Telling Us

2006 Ron Paul 9:1
The financial press, and even the network news shows, have begun reporting the price of gold regularly.   For twenty years, between 1980 and 2000, the price of gold was rarely mentioned.   There was little interest, and the price was either falling or remaining steady.

2006 Ron Paul 9:2
Since 2001 however, interest in gold has soared along with its price.   With the price now over $600 an ounce, a lot more people are becoming interested in gold as an investment and an economic indicator.   Much can be learned by understanding what the rising dollar price of gold means.

2006 Ron Paul 9:3
The rise in gold prices from $250 per ounce in 2001 to over $600 today has drawn investors and speculators into the precious metals market.   Though many already have made handsome profits, buying gold per se should not be touted as a good investment.   After all, gold earns no interest and its quality never changes.   It’s static, and does not grow as sound investments should.

2006 Ron Paul 9:4
It’s more accurate to say that one might invest in a gold or silver mining company, where management, labor costs, and the nature of new discoveries all play a vital role in determining the quality of the investment and the profits made.

2006 Ron Paul 9:5
Buying gold and holding it is somewhat analogous to converting one’s savings into one hundred dollar bills and hiding them under the mattress — yet not exactly the same.    Both gold and dollars are considered money, and holding money does not qualify as an investment.   There’s a big difference between the two however, since by holding paper money one loses purchasing power.    The purchasing power of commodity money, i.e. gold, however, goes up if the government devalues the circulating fiat currency.

2006 Ron Paul 9:6
Holding gold is protection or insurance against government’s proclivity to debase its currency.   The purchasing power of gold goes up not because it’s a so-called good investment; it goes up in value only because the paper currency goes down in value.   In our current situation, that means the dollar.

2006 Ron Paul 9:7
One of the characteristics of commodity money — one that originated naturally in the marketplace — is that it must serve as a store of value.   Gold and silver meet that test — paper does not.   Because of this profound difference, the incentive and wisdom of holding emergency funds in the form of gold becomes attractive when the official currency is being devalued.   It’s more attractive than trying to save wealth in the form of a fiat currency, even when earning some nominal interest.   The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn.   The purchasing power of gold can rise even faster than increases in the cost of living.

2006 Ron Paul 9:8
The point is that most who buy gold do so to protect against a depreciating currency rather than as an investment in the classical sense.    Americans understand this less than citizens of other countries; some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency.   Though our inflation — i.e. the depreciation of the U.S. dollar — has been insidious, average Americans are unaware of how this occurs.   For instance, few Americans know nor seem concerned that the 1913 pre-Federal Reserve dollar is now worth only four cents.   Officially, our central bankers and our politicians express no fear that the course on which we are set is fraught with great danger to our economy and our political system.   The belief that money created out of thin air can work economic miracles, if only properly “managed,” is pervasive in D.C.

2006 Ron Paul 9:9
In many ways we shouldn’t be surprised about this trust in such an unsound system.   For at least four generations our government-run universities have systematically preached a monetary doctrine justifying the so-called wisdom of paper money over the “foolishness” of sound money.   Not only that, paper money has worked surprisingly well in the past 35 years — the years the world has accepted pure paper money as currency.   Alan Greenspan bragged that central bankers in these several decades have gained the knowledge necessary to make paper money respond as if it were gold.   This removes the problem of obtaining gold to back currency, and hence frees politicians from the rigid discipline a gold standard imposes.

2006 Ron Paul 9:10
Many central bankers in the last 15 years became so confident they had achieved this milestone that they sold off large hoards of their gold reserves.   At other times they tried to prove that paper works better than gold by artificially propping up the dollar by suppressing market gold prices.   This recent deception failed just as it did in the 1960s, when our government tried to hold gold artificially low at $35 an ounce.   But since they could not truly repeal the economic laws regarding money, just as many central bankers sold, others bought.   It’s fascinating that the European central banks sold gold while Asian central banks bought it over the last several years.

2006 Ron Paul 9:11
Since gold has proven to be the real money of the ages, we see once again a shift in wealth from the West to the East, just as we saw a loss of our industrial base in the same direction.   Though Treasury officials deny any U.S. sales or loans of our official gold holdings, no audits are permitted so no one can be certain.

2006 Ron Paul 9:12
The special nature of the dollar as the reserve currency of the world has allowed this game to last longer than it would have otherwise.   But the fact that gold has gone from $252 per ounce to over $600 means there is concern about the future of the dollar.   The higher the price for gold, the greater the concern for the dollar.   Instead of dwelling on the dollar price of gold, we should be talking about the depreciation of the dollar.   In 1934 a dollar was worth 1/20 th of an ounce of gold; $20 bought an ounce of gold.    Today a dollar is worth 1/600 th of an ounce of gold, meaning it takes $600 to buy one ounce of gold.

2006 Ron Paul 9:13
The number of dollars created by the Federal Reserve, and through the fractional reserve banking system, is crucial in determining how the market assesses the relationship of the dollar and gold.   Though there’s a strong correlation, it’s not instantaneous or perfectly predictable.   There are many variables to consider, but in the long term the dollar price of gold represents past inflation of the money supply.   Equally important, it represents the anticipation of how much new money will be created in the future.   This introduces the factor of trust and confidence in our monetary authorities and our politicians.   And these days the American people are casting a vote of “no confidence” in this regard, and for good reasons.

2006 Ron Paul 9:14
The incentive for central bankers to create new money out of thin air is twofold.   One is to practice central economic planning through the manipulation of interest rates.   The second is to monetize the escalating federal debt politicians create and thrive on.

2006 Ron Paul 9:15
Today no one in Washington believes for a minute that runaway deficits are going to be curtailed.   In March alone, the federal government created an historic $85 billion deficit. The current supplemental bill going through Congress has grown from $92 billion to over $106 billion, and everyone knows it will not draw President Bush’s first veto.   Most knowledgeable people therefore assume that inflation of the money supply is not only going to continue, but accelerate.   This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not yet been fully discounted, guarantees the further depreciation of the dollar in terms of gold.

2006 Ron Paul 9:16
There’s no single measurement that reveals what the Fed has done in the recent past or tells us exactly what it’s about to do in the future.   Forget about the lip service given to transparency by new Fed Chairman Bernanke.   Not only is this administration one of the most secretive across the board in our history, the current Fed firmly supports denying the most important measurement of current monetary policy to Congress, the financial community, and the American public.   Because of a lack of interest and poor understanding of monetary policy, Congress has expressed essentially no concern about the significant change in reporting statistics on the money supply.

2006 Ron Paul 9:17
Beginning in March, though planned before Bernanke arrived at the Fed, the central bank discontinued compiling and reporting the monetary aggregate known as M3.   M3 is the best description of how quickly the Fed is creating new money and credit.   Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation.   Yet this report is no longer available to us and Congress makes no demands to receive it.

2006 Ron Paul 9:18
Though M3 is the most helpful statistic to track Fed activity, it by no means tells us everything we need to know about trends in monetary policy.   Total bank credit, still available to us, gives us indirect information reflecting the Fed’s inflationary policies.   But ultimately the markets will figure out exactly what the Fed is up to, and then individuals, financial institutions, governments, and other central bankers will act accordingly.   The fact that our money supply is rising significantly cannot be hidden from the markets.

2006 Ron Paul 9:19
The response in time will drive the dollar down, while driving interest rates and commodity prices up.   Already we see this trend developing, which surely will accelerate in the not too distant future.   Part of this reaction will be from those who seek a haven to protect their wealth — not invest — by treating gold and silver as universal and historic money.   This means holding fewer dollars that are decreasing in value while holding gold as it increases in value.

2006 Ron Paul 9:20
A soaring gold price is a vote of “no confidence” in the central bank and the dollar.   This certainly was the case in 1979 and 1980.   Today, gold prices reflect a growing restlessness with the increasing money supply, our budgetary and trade deficits, our unfunded liabilities, and the inability of Congress and the administration to reign in runaway spending.

2006 Ron Paul 9:21
Denying us statistical information, manipulating interest rates, and artificially trying to keep gold prices in check won’t help in the long run.   If the markets are fooled short term, it only means the adjustments will be much more dramatic later on.   And in the meantime, other market imbalances develop.

2006 Ron Paul 9:22
The Fed tries to keep the consumer spending spree going, not through hard work and savings, but by creating artificial wealth in stock markets bubbles and housing bubbles.   When these distortions run their course and are discovered, the corrections will be quite painful.

2006 Ron Paul 9:23
Likewise, a fiat monetary system encourages speculation and unsound borrowing.   As problems develop, scapegoats are sought and frequently found in foreign nations.   This prompts many to demand altering exchange rates and protectionist measures.   The sentiment for this type of solution is growing each day.

2006 Ron Paul 9:24
Though everyone decries inflation, trade imbalances, economic downturns, and federal deficits, few attempt a closer study of our monetary system and how these events are interrelated.   Even if it were recognized that a gold standard without monetary inflation would be advantageous, few in Washington would accept the political disadvantages of living with the discipline of gold — since it serves as a check on government size and power.   This is a sad commentary on the politics of today.   The best analogy to our affinity for government spending, borrowing, and inflating is that of a drug addict who knows if he doesn’t quit he’ll die; yet he can’t quit because of the heavy price required to overcome the dependency.   The right choice is very difficult, but remaining addicted to drugs guarantees the death of the patient, while our addiction to deficit spending, debt, and inflation guarantees the collapse of our economy.

2006 Ron Paul 9:25
Special interest groups, who vigorously compete for federal dollars, want to perpetuate the system rather than admit to a dangerous addiction.   Those who champion welfare for the poor, entitlements for the middle class, or war contracts for the military industrial corporations, all agree on the so-called benefits bestowed by the Fed’s power to counterfeit fiat money.   Bankers, who benefit from our fractional reserve system, likewise never criticize the Fed, especially since it’s the lender of last resort that bails out financial institutions when crises arise.   And it’s true, special interests and bankers do benefit from the Fed, and may well get bailed out — just as we saw with the Long-Term Capital Management fund crisis a few years ago.   In the past, companies like Lockheed and Chrysler benefited as well.   But what the Fed cannot do is guarantee the market will maintain trust in the worthiness of the dollar.   Current policy guarantees that the integrity of the dollar will be undermined.   Exactly when this will occur, and the extent of the resulting damage to financial system, cannot be known for sure — but it is coming.   There are plenty of indications already on the horizon.

2006 Ron Paul 9:26
Foreign policy plays a significant role in the economy and the value of the dollar.   A foreign policy of militarism and empire building cannot be supported through direct taxation.   The American people would never tolerate the taxes required to pay immediately for overseas wars, under the discipline of a gold standard.   Borrowing and creating new money is much more politically palatable.   It hides and delays the real costs of war, and the people are lulled into complacency — especially since the wars we fight are couched in terms of patriotism, spreading the ideas of freedom, and stamping out terrorism.   Unnecessary wars and fiat currencies go hand-in-hand, while a gold standard encourages a sensible foreign policy.

2006 Ron Paul 9:27
The cost of war is enormously detrimental; it significantly contributes to the economic instability of the nation by boosting spending, deficits, and inflation.   Funds used for war are funds that could have remained in the productive economy to raise the standard of living of Americans now unemployed, underemployed, or barely living on the margin.

2006 Ron Paul 9:28
Yet even these costs may be preferable to paying for war with huge tax increases.   This is because although fiat dollars are theoretically worthless, value is imbued by the trust placed in them by the world’s financial community.   Subjective trust in a currency can override objective knowledge about government policies, but only for a limited time.

2006 Ron Paul 9:29
Economic strength and military power contribute to the trust in a currency; in today’s world trust in the U.S. dollar is not earned and therefore fragile.   The history of the dollar, being as good as gold up until 1971, is helpful in maintaining an artificially higher value for the dollar than deserved.

2006 Ron Paul 9:30
Foreign policy contributes to the crisis when the spending to maintain our worldwide military commitments becomes prohibitive, and inflationary pressures accelerate.   But the real crisis hits when the world realizes the king has no clothes, in that the dollar has no backing, and we face a military setback even greater than we already are experiencing in Iraq.   Our token friends may quickly transform into vocal enemies once the attack on the dollar begins.

2006 Ron Paul 9:31
False trust placed in the dollar once was helpful to us, but panic and rejection of the dollar will develop into a real financial crisis.   Then we will have no other option but to tighten our belts, go back to work, stop borrowing, start saving, and rebuild our industrial base, while adjusting to a lower standard of living for most Americans.

2006 Ron Paul 9:32
Counterfeiting the nation’s money is a serious offense.   The founders were especially adamant about avoiding the chaos, inflation, and destruction associated with the Continental dollar.   That’s why the Constitution is clear that only gold and silver should be legal tender in the United States.   In 1792 the Coinage Act authorized the death penalty for any private citizen who counterfeited the currency.   Too bad they weren’t explicit that counterfeiting by government officials is just as detrimental to the economy and the value of the dollar.

2006 Ron Paul 9:33
In wartime, many nations actually operated counterfeiting programs to undermine our dollar, but never to a disastrous level.   The enemy knew how harmful excessive creation of new money could be to the dollar and our economy.   But it seems we never learned the dangers of creating new money out of thin air.   We don’t need an Arab nation or the Chinese to undermine our system with a counterfeiting operation.   We do it ourselves, with all the disadvantages that would occur if others did it to us.   Today we hear threats from some Arab, Muslim, and far Eastern countries about undermining the dollar system- not by dishonest counterfeiting, but by initiating an alternative monetary system based on gold.   Wouldn’t that be ironic?   Such an event theoretically could do great harm to us.   This day may well come, not so much as a direct political attack on the dollar system but out of necessity to restore confidence in money once again.

2006 Ron Paul 9:34
Historically, paper money never has lasted for long periods of time, while gold has survived thousands of years of attacks by political interests and big government.   In time, the world once again will restore trust in the monetary system by making some currency as good as gold.

2006 Ron Paul 9:35
Gold, or any acceptable market commodity money, is required to preserve liberty.   Monopoly control by government of a system that creates fiat money out of thin air guarantees the loss of liberty.   No matter how well-intended our militarism is portrayed, or how happily the promises of wonderful programs for the poor are promoted, inflating the money supply to pay these bills makes government bigger.   Empires always fail, and expenses always exceed projections.   Harmful unintended consequences are the rule, not the exception.   Welfare for the poor is inefficient and wasteful.   The beneficiaries are rarely the poor themselves, but instead the politicians, bureaucrats, or the wealthy.   The same is true of all foreign aid — it’s nothing more than a program that steals from the poor in a rich country and gives to the rich leaders of a poor country.   Whether it’s war or welfare payments, it always means higher taxes, inflation, and debt.   Whether it’s the extraction of wealth from the productive economy, the distortion of the market by interest rate manipulation, or spending for war and welfare, it can’t happen without infringing upon personal liberty.  

2006 Ron Paul 9:36
At home the war on poverty, terrorism, drugs, or foreign rulers provides an opportunity for authoritarians to rise to power, individuals who think nothing of violating the people’s rights to privacy and freedom of speech.   They believe their role is to protect the secrecy of government, rather than protect the privacy of citizens.   Unfortunately, that is the atmosphere under which we live today, with essentially no respect for the Bill of Rights.

2006 Ron Paul 9:37
Though great economic harm comes from a government monopoly fiat monetary system, the loss of liberty associated with it is equally troubling.   Just as empires are self-limiting in terms of money and manpower, so too is a monetary system based on illusion and fraud.   When the end comes we will be given an opportunity to choose once again between honest money and liberty on one hand; chaos, poverty, and authoritarianism on the other.

2006 Ron Paul 9:38
The economic harm done by a fiat monetary system is pervasive, dangerous, and unfair.   Though runaway inflation is injurious to almost everyone, it is more insidious for certain groups.   Once inflation is recognized as a tax, it becomes clear the tax is regressive: penalizing the poor and middle class more than the rich and politically privileged.   Price inflation, a consequence of inflating the money supply by the central bank, hits poor and marginal workers first and foremost.   It especially penalizes savers, retirees, those on fixed incomes, and anyone who trusts government promises.   Small businesses and individual enterprises suffer more than the financial elite, who borrow large sums before the money loses value.   Those who are on the receiving end of government contracts — especially in the military industrial complex during wartime — receive undeserved benefits.  

2006 Ron Paul 9:39
It’s a mistake to blame high gasoline and oil prices on price gouging.   If we impose new taxes or fix prices, while ignoring monetary inflation, corporate subsidies, and excessive regulations, shortages will result.   The market is the only way to determine the best price for any commodity.   The law of supply and demand cannot be repealed.   The real problems arise when government planners give subsidies to energy companies and favor one form of energy over another.

2006 Ron Paul 9:40
Energy prices are rising for many reasons: Inflation; increased demand from China and India; decreased supply resulting from our invasion of Iraq; anticipated disruption of supply as we push regime change in Iran; regulatory restrictions on gasoline production; government interference in the free market development of alternative fuels; and subsidies to big oil such as free leases and grants for research and development.

2006 Ron Paul 9:41
Interestingly, the cost of oil and gas is actually much higher than we pay at the retail level.   Much of the DOD budget is spent protecting “our” oil supplies, and if such spending is factored in gasoline probably costs us more than $5 a gallon.   The sad irony is that this military effort to secure cheap oil supplies inevitably backfires, and actually curtails supplies and boosts prices at the pump.   The waste and fraud in issuing contracts to large corporations for work in Iraq only add to price increases.

2006 Ron Paul 9:42
When problems arise under conditions that exist today, it’s a serious error to blame the little bit of the free market that still functions.   Last summer the market worked efficiently after Katrina — gas hit $3 a gallon, but soon supplies increased, usage went down, and the price returned to $2.   In the 1980s, market forces took oil from $40 per barrel to $10 per barrel, and no one cried for the oil companies that went bankrupt.   Today’s increases are for the reasons mentioned above.   It’s natural for labor to seek its highest wage, and businesses to strive for the greatest profit. That’s the way the market works.   When the free market is allowed to work, it’s the consumer who ultimately determines price and quality, with labor and business accommodating consumer choices.   Once this process is distorted by government, prices rise excessively, labor costs and profits are negatively affected, and problems emerge.   Instead of fixing the problem, politicians and demagogues respond by demanding windfall profits taxes and price controls, while never questioning how previous government interference caused the whole mess in the first place.   Never let it be said that higher oil prices and profits cause inflation; inflation of the money supply causes higher prices!

2006 Ron Paul 9:43
Since keeping interest rates below market levels is synonymous with new money creation by the Fed, the resulting business cycle, higher cost of living, and job losses all can be laid at the doorstep of the Fed.   This burden hits the poor the most, making Fed taxation by inflation the worst of all regressive taxes.   Statistics about revenues generated by the income tax are grossly misleading; in reality much harm is done by our welfare/warfare system supposedly designed to help the poor and tax the rich.   Only sound money can rectify the blatant injustice of this destructive system.

2006 Ron Paul 9:44
The Founders understood this great danger, and voted overwhelmingly to reject “emitting bills of credit,” the term they used for paper or fiat money.   It’s too bad the knowledge and advice of our founders, and their mandate in the Constitution, are ignored today at our great peril.   The current surge in gold prices — which reflects our dollar’s devaluation — is warning us to pay closer attention to our fiscal, monetary, entitlement, and foreign policy.

2006 Ron Paul 9:45
Meaning of the Gold Price — Summation

2006 Ron Paul 9:46
A recent headline in the financial press announced that gold prices surged over concern that confrontation with Iran will further push oil prices higher.    This may well reflect the current situation, but higher gold prices mainly reflect monetary expansion by the Federal Reserve.    Dwelling on current events and their effect on gold prices reflects concern for symptoms rather than an understanding of the actual cause of these price increases.   Without an enormous increase in the money supply over the past 35 years and a worldwide paper monetary system, this increase in the price of gold would not have occurred.

2006 Ron Paul 9:47
Certainly geo-political events in the Middle East under a gold standard would not alter its price, though they could affect the supply of oil and cause oil prices to rise.   Only under conditions created by excessive paper money would one expect all or most prices to rise.   This is a mere reflection of the devaluation of the dollar.

2006 Ron Paul 9:48
Particular things to remember:  

2006 Ron Paul 9:49
If one endorses small government and maximum liberty, one must support commodity money.

2006 Ron Paul 9:50
One of the strongest restraints against unnecessary war is a gold standard.

2006 Ron Paul 9:51
Deficit financing by government is severely restricted by sound money.

2006 Ron Paul 9:52
The harmful effects of the business cycle are virtually eliminated with an honest gold standard.

2006 Ron Paul 9:53
Saving and thrift are encouraged by a gold standard; and discouraged by paper money.

2006 Ron Paul 9:54
Price inflation, with generally rising price levels, is characteristic of paper money.   Reports that the consumer price index and the producer price index are rising are distractions: the real cause of inflation is the Fed’s creation of new money.

2006 Ron Paul 9:55
Interest rate manipulation by central bank helps the rich, the banks, the government, and the politicians.

2006 Ron Paul 9:56
Paper money permits the regressive inflation tax to be passed off on the poor and the middle class.

2006 Ron Paul 9:57
Speculative financial bubbles are characteristic of paper money — not gold.

2006 Ron Paul 9:58
Paper money encourages economic and political chaos, which subsequently causes a search for scapegoats rather than blaming the central bank.

2006 Ron Paul 9:59
Dangerous protectionist measures frequently are implemented to compensate for the dislocations caused by fiat money.

2006 Ron Paul 9:60
Paper money, inflation, and the conditions they create contribute to the problems of illegal immigration.

2006 Ron Paul 9:61
The value of gold is remarkably stable.

2006 Ron Paul 9:62
The dollar price of gold reflects dollar depreciation.

2006 Ron Paul 9:63
Holding gold helps preserve and store wealth, but technically gold is not a true investment.

2006 Ron Paul 9:64

2006 Ron Paul 9:65
Since 2001 the dollar has been devalued by 60%.

2006 Ron Paul 9:66
            In 1934 FDR devalued the dollar by 41%.

2006 Ron Paul 9:67
            In 1971 Nixon devalued the dollar by 7.9%.

2006 Ron Paul 9:68
            In 1973 Nixon devalued the dollar by 10%.

2006 Ron Paul 9:69
These were momentous monetary events, and every knowledgeable person worldwide paid close attention.   Major changes were endured in 1979 and 1980 to save the dollar from disintegration.   This involved a severe recession, interest rates over 21%, and general price inflation of 15%.

2006 Ron Paul 9:70
Today we face a 60% devaluation and counting, yet no one seems to care.   It’s of greater significance than the three events mentioned above.   And yet the one measurement that best reflects the degree of inflation, the Fed and our government deny us.   Since March, M3 reporting has been discontinued.   For starters, I’d like to see Congress demand that this report be resumed.   I fully believe the American people and Congress are entitled to this information.   Will we one day complain about false intelligence, as we have with the Iraq war?   Will we complain about not having enough information to address monetary policy after it’s too late?

2006 Ron Paul 9:71
If ever there was a time to get a handle on what sound money is and what it means, that time is today.

2006 Ron Paul 9:72
Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket — along with the profits of the military industrial complex, the oil industry, and other special interests.

2006 Ron Paul 9:73
A sharply rising gold price is a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.

2006 Ron Paul 9:74
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country.   It’s been that way for a long time, and is not about to change.

2006 Ron Paul 9:75
If we care about the financial system, the tax system, and the monumental debt we’re accumulating, we must start talking about the benefits and discipline that come only with a commodity standard of money — money the government and central banks absolutely cannot create out of thin air.

2006 Ron Paul 9:76
Economic law dictates reform at some point.   But should we wait until the dollar is 1/1,000 of an ounce of gold or 1/2,000 of an ounce of gold?   The longer we wait, the more people suffer and the more difficult reforms become.   Runaway inflation inevitably leads to political chaos, something numerous countries have suffered throughout the 20 th century.   The worst example of course was the German inflation of the 1920s that led to the rise of Hitler.   Even the communist takeover of China was associated with runaway inflation brought on by Chinese Nationalists.   The time for action is now, and it is up to the American people and the U.S. Congress to demand it.

2006 Ron Paul Chapter 10
Before the U.S. House of Representatives  

May 2, 2006
What Congress Can Do About Soaring Gas Prices

2006 Ron Paul 10:1
Gasoline prices are soaring and the people are screaming.   And they want something done about it—now!

2006 Ron Paul 10:2
$100 rebate checks to American motorists won’t cut it, nor will mandatory mileage requirements for new vehicles.   Taxing oil profits will only force prices higher.   But there are some very important things we can do immediately to help.

2006 Ron Paul 10:3
First : We must reassess our foreign policy and announce some changes.   One of the reasons we went into Iraq was to secure “our” oil.   Before the Iraq war oil was less than $30 per barrel; today it is over $70.   The sooner we get out of Iraq and allow the Iraqis to solve their own problems the better.   Since 2002 oil production in Iraq has dropped 50%.   Pipeline sabotage and fires are routine; we have been unable to prevent them.   Soaring gasoline prices are a giant unintended consequence of our invasion, pure and simple.  

2006 Ron Paul 10:4
Second :   We must end our obsession for a military confrontation with Iran.   Iran does not have a nuclear weapon, and according to our own CIA is not on the verge of obtaining one for years.   Iran is not in violation of the Nuclear Nonproliferation Treaty, and has a guaranteed right to enrich uranium for energy—in spite of the incessant government and media propaganda to the contrary.   Iran has never been sanctioned by the UN Security Council.   Yet the drumbeat grows louder for attacking certain sites in Iran, either by conventional or even nuclear means.   Repeated resolutions by Congress stir up unnecessary animosity toward Iran, and create even more concern about future oil supplies from the Middle East.   We must quickly announce we do not seek war with Iran, remove the economic sanctions against her, and accept her offer to negotiate a diplomatic solution to the impasse.   An attack on Iran, coupled with our continued presence in Iraq, could hike gas prices to $5 or $6 per gallon here at home.   By contrast, a sensible approach toward Iran could quickly lower oil prices by $20 per barrel.  

2006 Ron Paul 10:5
Third : We must remember that prices of all things go up because of inflation.   Inflation by definition is an increase in the money supply.   The money supply is controlled by the Federal Reserve Bank, and responds to the deficits Congress creates.   When deficits are excessive, as they are today, the Fed creates new dollars out of thin air to buy Treasury bills and keep interest rates artificially low.   But when new money is created out of nothing, the money already in circulation loses value.   Once this is recognized, prices rise — some more rapidly than others.   That’s what we see today with the cost of energy.

2006 Ron Paul 10:6
Exploding deficits, due to runaway entitlement spending and the cost of dangerous militarism, create pressure for the Fed to inflate the money supply.   This contributes greatly to the higher prices we all claim to oppose.

2006 Ron Paul 10:7
If we want to do something about gas prices, we should demand and vote for greatly reduced welfare and military spending, a balanced budget, and fewer regulations that interfere with the market development of alternative fuels.   We also should demand a return to a sound commodity monetary system.

2006 Ron Paul 10:8
All subsidies and special benefits to energy companies should be ended.   And in the meantime let’s eliminate federal gas taxes at the pump.

2006 Ron Paul 10:9
Oil prices are at a level where consumers reduce consumption voluntarily.   The market will work if we let it.   But as great as the market economy is, it cannot overcome a foreign policy that is destined to disrupt oil supplies and threaten the world with an expanded and dangerous conflict in the Middle East.

2006 Ron Paul Chapter 11
Before the U.S. House of Representatives  

June 20, 2006
Dialogue is Key to Dealing With Iran

2006 Ron Paul 11:1
I am encouraged by recent news that the Administration has offered to put an end to our 26 year old policy of refusing to speak with the Iranians.

2006 Ron Paul 11:2
While this is a positive move, I am still concerned about the pre-conditions set by the administration before it will agree to begin talks. Unfortunately, the main U.S. pre-condition is that the Iranians abandon their uranium enrichment program. But this is exactly what the negotiations are meant to discuss! How can a meaningful dialogue take place when one side demands that the other side abandon its position before talks can begin? Is this offer designed to fail so as to clear the way for military action while being able to claim that diplomacy was attempted? If the administration wishes to avoid this perception, it would be wiser to abandon pre-conditions and simply agree to talk to Iran.

2006 Ron Paul 11:3
By demanding that Iran give up its uranium enrichment program, the United States is unilaterally changing the terms of the Nuclear Non-Proliferation treaty. We must remember that Iran has never been found in violation of the Non-Proliferation Treaty. UN inspectors have been in Iran for years, and International Atomic Energy Agency Director ElBaradei has repeatedly reported that he can find no indication of diversion of source or special nuclear materials to a military purpose.

2006 Ron Paul 11:4
As a signatory of the Non-Proliferation Treaty, Iran has, according to the Treaty, the “inalienable right” to the “development research, production and use of nuclear energy for peaceful purposes without discrimination.” Yet the United States is demanding that Iran give up that right even though after years of monitoring Iran has never been found to have diverted nuclear material from peaceful to military use.

2006 Ron Paul 11:5
As my colleagues are well aware, I am strongly opposed to the United Nations and our participation in that organization. Every Congress I introduce a bill to get us out of the UN. But I also recognize problems with our demanding to have it both ways. On one hand, we pretend to abide by the UN and international law, such as when Congress cited the UN in its resolution authorizing the president to initiate war with Iraq. On the other hand, we feel free to completely ignore the terms of treaties - and even unilaterally demand a change in the terms of treaties - without hesitation. This leads to an increasing perception around the world that we are no longer an honest broker, that we are not to be trusted. Is this the message we really want to send at this critical time?

2006 Ron Paul 11:6
Some may argue that it does not matter whether the US operates under double standards. We are the lone super-power and can do as we wish, they argue. But this is a problem of the rule of law. Are we a nation that respects the rule of law? What example does it set for the rest of the world - including rising powers like China and Russia - when we change the rules of the game whenever we see fit? Won’t this come back to haunt us?

2006 Ron Paul 11:7
We need to remember that decision-making power under Iran’s government is not all concentrated in the president. We are all familiar with the inflammatory rhetoric of President Ahmadinejad, but there are other governmental bodies in Iran that are more moderate and eager for dialogue. We have already spent hundreds of billions of dollars on a war in the Middle East. We cannot afford to continue on the path of conflict over dialogue and peaceful resolution. Unnecessarily threatening Iran is not in the US interest and is not in the interest of world peace.

2006 Ron Paul Chapter 12
Before the U.S. House of Representatives  

June 29, 2006
Why Are Americans So Angry?

2006 Ron Paul 12:1
I have been involved in politics for over 30 years and have never seen the American people so angry.   It’s not unusual to sense a modest amount of outrage, but it seems the anger today is unusually intense and quite possibly worse than ever.   It’s not easily explained, but I have some thoughts on this matter.   Generally, anger and frustration among people are related to economic conditions; bread and butter issues.   Yet today, according to government statistics, things are going well. We have low unemployment, low inflation, more homeowners than ever before, and abundant leisure with abundant luxuries.   Even the poor have cell phones, televisions, and computers.   Public school is free, and anyone can get free medical care at any emergency room in the country. Almost all taxes are paid by the top 50% of income earners.   The lower 50% pay essentially no income taxes, yet general dissatisfaction and anger are commonplace.   The old slogan “It’s the economy, stupid,” just doesn’t seem to explain things

2006 Ron Paul 12:2
Some say it’s the war, yet we’ve lived with war throughout the 20 th century. The bigger they were the more we pulled together.   And the current war, by comparison, has fewer American casualties than the rest.   So it can’t just be the war itself.

2006 Ron Paul 12:3
People complain about corruption, but what’s new about government corruption?   In the 19 th century we had railroad scandals; in the 20 th century we endured the Teapot Dome scandal, Watergate, Koreagate, and many others without too much anger and resentment.   Yet today it seems anger is pervasive and worse than we’ve experienced in the past.

2006 Ron Paul 12:4
Could it be that war, vague yet persistent economic uncertainty, corruption, and the immigration problem all contribute to the anger we feel in America?   Perhaps, but it’s almost as though people aren’t exactly sure why they are so uneasy.   They only know that they’ve had it and aren’t going to put up with it anymore.

2006 Ron Paul 12:5
High gasoline prices make a lot of people angry, though there is little understanding of how deficits, inflation, and war in the Middle East all contribute to these higher prices.

2006 Ron Paul 12:6
Generally speaking, there are two controlling forces that determine the nature of government: the people’s concern for their economic self interests; and the philosophy of those who hold positions of power and influence in any particular government.   Under Soviet Communism the workers believed their economic best interests were being served, while a few dedicated theoreticians placed themselves in positions of power.   Likewise, the intellectual leaders of the American Revolution were few, but rallied the colonists to risk all to overthrow a tyrannical king.

2006 Ron Paul 12:7
Since there’s never a perfect understanding between these two forces, the people and the philosophical leaders, and because the motivations of the intellectual leaders vary greatly, any transition from one system of government to another is unpredictable.   The communist takeover by Lenin was violent and costly; the demise of communism and the acceptance of a relatively open system in the former Soviet Union occurred in a miraculous manner.   Both systems had intellectual underpinnings.

2006 Ron Paul 12:8
In the United States over the last century we have witnessed the coming and going of various intellectual influences by proponents of the free market, Keynesian welfarism, varieties of socialism, and supply-side economics.   In foreign policy we’ve seen a transition from the founder’s vision of non-intervention in the affairs of others to internationalism, unilateral nation building, and policing the world.   We now have in place a policy, driven by determined neo-conservatives, to promote American “goodness” and democracy throughout the world by military force — with particular emphasis on remaking the Middle East.

2006 Ron Paul 12:9
We all know that ideas do have consequences.   Bad ideas, even when supported naively by the people, will have bad results.   Could it be the people sense, in a profound way, that the policies of recent decades are unworkable — and thus they have instinctively lost confidence in their government leaders?   This certainly happened in the final years of the Soviet system.   Though not fully understood, this sense of frustration may well be the source of anger we hear expressed on a daily basis by so many.

2006 Ron Paul 12:10
No matter how noble the motivations of political leaders are, when they achieve positions of power the power itself inevitably becomes their driving force.   Government officials too often yield to the temptations and corrupting influences of power.

2006 Ron Paul 12:11
But there are many others who are not bashful about using government power to do “good.”   They truly believe they can make the economy fair through a redistributive tax and spending system; make the people moral by regulating personal behavior and choices; and remake the world in our image using armies.   They argue that the use of force to achieve good is legitimate and proper for government — always speaking of the noble goals while ignoring the inevitable failures and evils caused by coercion.

2006 Ron Paul 12:12
Not only do they justify government force, they believe they have a moral obligation to do so.

2006 Ron Paul 12:13
Once we concede government has this “legitimate” function and can be manipulated by a majority vote, the various special interests move in quickly.   They gain control to direct government largesse for their own benefit.   Too often it is corporate interests who learn how to manipulate every contract, regulation and tax policy.   Likewise, promoters of the “progressive” agenda, always hostile to property rights, compete for government power through safety, health, and environmental initiatives.   Both groups resort to using government power — and abuse this power — in an effort to serve their narrow interests.   In the meantime, constitutional limits on power and its mandate to protect liberty are totally forgotten.

2006 Ron Paul 12:14
Since the use of power to achieve political ends is accepted, pervasive, and ever expanding, popular support for various programs is achieved by creating fear.   Sometimes the fear is concocted out of thin air, but usually it’s created by wildly exaggerating a problem or incident that does not warrant the proposed government “solution.”   Often government caused the problem in the first place.   The irony, of course, is that government action rarely solves any problem, but rather worsens existing problems or creates altogether new ones.

2006 Ron Paul 12:15
Fear is generated to garner popular support for the proposed government action, even when some liberty has to be sacrificed.   This leads to a society that is systemically driven toward fear — fear that gives the monstrous government more and more authority and control over our lives and property.

2006 Ron Paul 12:16
Fear is constantly generated by politicians to rally the support of the people.

2006 Ron Paul 12:17
Environmentalists go back and forth, from warning about a coming ice age to arguing the grave dangers of global warming.

2006 Ron Paul 12:18
It is said that without an economic safety net — for everyone, from cradle to grave — people would starve and many would become homeless.

2006 Ron Paul 12:19
It is said that without government health care, the poor would not receive treatment.   Medical care would be available only to the rich.

2006 Ron Paul 12:20
Without government insuring pensions, all private pensions would be threatened.

2006 Ron Paul 12:21
Without federal assistance, there would be no funds for public education, and the quality of our public schools would diminish — ignoring recent history to the contrary.

2006 Ron Paul 12:22
It is argued that without government surveillance of every American, even without search warrants, security cannot be achieved.   The sacrifice of some liberty is required for security of our citizens, they claim.

2006 Ron Paul 12:23
We are constantly told that the next terrorist attack could come at any moment.   Rather than questioning why we might be attacked, this atmosphere of fear instead prompts giving up liberty and privacy.   9/11 has been conveniently used to generate the fear necessary to expand both our foreign intervention and domestic surveillance.

2006 Ron Paul 12:24
Fear of nuclear power is used to assure shortages and highly expensive energy.

2006 Ron Paul 12:25
In all instances where fear is generated and used to expand government control, it’s safe to say the problems behind the fears were not caused by the free market economy, or too much privacy, or excessive liberty.

2006 Ron Paul 12:26
It’s easy to generate fear, fear that too often becomes excessive, unrealistic, and difficult to curb.   This is important: It leads to even more demands for government action than the perpetrators of the fear actually anticipated.

2006 Ron Paul 12:27
Once people look to government to alleviate their fears and make them safe, expectations exceed reality.   FEMA originally had a small role, but its current mission is to centrally manage every natural disaster that befalls us.  This mission was exposed as a fraud during last year’s hurricanes; incompetence and corruption are now FEMA’s legacy.   This generates anger among those who have to pay the bills, and among those who didn’t receive the handouts promised to them quickly enough.

2006 Ron Paul 12:28
Generating exaggerated fear to justify and promote attacks on private property is commonplace.   It serves to inflame resentment between the producers in society and the so-called victims, whose demands grow exponentially.

2006 Ron Paul 12:29
The economic impossibility of this system guarantees that the harder government tries to satisfy the unlimited demands, the worse the problems become.   We won’t be able to pay the bills forever, and eventually our ability to borrow and print new money must end.   This dependency on government will guarantee anger when the money runs out.   Today we’re still able to borrow and inflate, but budgets are getting tighter and people sense serious problems lurking in the future.   This fear is legitimate.   No easy solution to our fiscal problems is readily apparent, and this ignites anger and apprehension.  

2006 Ron Paul 12:30
Disenchantment is directed at the politicians and their false promises, made in order to secure reelection and exert power that so many of them enjoy.

2006 Ron Paul 12:31
It is, however, in foreign affairs that governments have most abused fear to generate support for an agenda that under normal circumstances would have been rejected.   For decades our administrations have targeted one supposed “Hitler” after another to gain support for military action against a particular country.   Today we have three choices termed the axis of evil: Iran, Iraq or North Korea.

2006 Ron Paul 12:32
We recently witnessed how unfounded fear was generated concerning Saddam Hussein’s weapons of mass destruction to justify our first ever pre-emptive war.   It is now universally known the fear was based on falsehoods.   And yet the war goes on; the death and destruction continue.  

2006 Ron Paul 12:33
This is not a new phenomenon.   General Douglas MacArthur understood the political use of fear when he made this famous statement:

2006 Ron Paul 12:34
“Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it.”

2006 Ron Paul 12:35
We should be ever vigilant when we hear the fear mongers preparing us for the next military conflict our young men and women will be expected to fight.   We’re being told of the great danger posed by Almadinejad in Iran and Kim Jung Il in North Korea.   Even Russia and China bashing is in vogue again.   And we’re still not able to trade with or travel to Cuba.   A constant enemy is required to expand the state.   More and more news stories blame Iran for the bad results in Iraq.   Does this mean Iran is next on the hit list?

2006 Ron Paul 12:36
The world is much too dangerous, we’re told, and therefore we must be prepared to fight at a moment’s notice, regardless of the cost.   If the public could not be manipulated by politicians’ efforts to instill needless fear, fewer wars would be fought and far fewer lives would be lost.

2006 Ron Paul 12:37
Fear and Anger over Iraq Though the American people are fed up for a lot of legitimate reasons, almost all polls show the mess in Iraq leads the list of why the anger is so intense.

2006 Ron Paul 12:38
Short wars, with well-defined victories, are tolerated by the American people even when they are misled as to the reasons for the war.   Wars entered into without a proper declaration tend to be politically motivated and not for national security reasons.   These wars, by their very nature, are prolonged, costly, and usually require a new administration to finally end them.   This certainly was true with the Korean and Vietnam wars.   The lack of a quick military success, the loss of life and limb, and the huge economic costs of lengthy wars precipitate anger.   This is overwhelmingly true when the war propaganda that stirred up illegitimate fears is exposed as a fraud.   Most soon come to realize the promise of guns and butter is an illusion.   They come to understand that inflation, a weak economy, and a prolonged war without real success are the reality.

2006 Ron Paul 12:39
The anger over the Iraq war is multifaceted.   Some are angry believing they were lied to in order to gain their support at the beginning.   Others are angry that the forty billion dollars we spend every year on intelligence gathering failed to provide good information.   Proponents of the war too often are unable to admit the truth.   They become frustrated with the progress of the war and then turn on those wanting to change course, angrily denouncing them as unpatriotic and un-American.

2006 Ron Paul 12:40
Those accused are quick to respond to the insulting charges made by those who want to fight on forever without regard to casualties.   Proponents of the war do not hesitate to challenge the manhood of war critics, accusing them of wanting to cut and run.   Some war supporters ducked military service themselves while others fought and died, only adding to the anger of those who have seen battle up close and now question our campaign in Iraq.

2006 Ron Paul 12:41
When people see a $600 million embassy being built in Baghdad, while funding for services here in the United States is hard to obtain, they become angry.   They can’t understand why the money is being spent, especially when they are told by our government that we have no intention of remaining permanently in Iraq.

2006 Ron Paul 12:42
The bickering and anger will not subside soon, since victory in Iraq is not on the horizon and a change in policy is not likely either.

2006 Ron Paul 12:43
The neoconservative instigators of the war are angry at everyone: at the people who want to get out of Iraq; and especially at those prosecuting the war for not bombing more aggressively, sending in more troops, and expanding the war into Iran.

2006 Ron Paul 12:44
As our country becomes poorer due to the cost of the war, anger surely will escalate.  Much of it will be justified.

2006 Ron Paul 12:45
It seems bizarre that it’s so unthinkable to change course if the current policy is failing.   Our leaders are like a physician who makes a wrong diagnosis and prescribes the wrong medicine, but because of his ego can’t tell the patient he made a mistake.   Instead he hopes the patient will get better on his own.   But instead of improving, the patient gets worse from the medication wrongly prescribed.   This would be abhorrent behavior in medicine, but tragically it is commonplace in politics.

2006 Ron Paul 12:46
If the truth is admitted, it would appear that the lives lost and the money spent have been in vain.   Instead, more casualties must be sustained to prove a false premise.  What a tragedy!  If the truth is admitted, imagine the anger of all the families that already have suffered such a burden.   That burden is softened when the families and the wounded are told their great sacrifice was worthy, and required to preserve our freedoms and our Constitution.

2006 Ron Paul 12:47
But no one is allowed to ask the obvious.   How have the 2,500 plus deaths, and the 18,500 wounded, made us more free?   What in the world does Iraq have to do with protecting our civil liberties here at home?   What national security threat prompted America’s first pre-emptive war?   How does our unilateral enforcement of UN resolutions enhance our freedoms?

2006 Ron Paul 12:48
These questions aren’t permitted.   They are not politically correct.   I agree that the truth hurts, and these questions are terribly hurtful to the families that have suffered so much.   What a horrible thought it would be to find out the cause for which we fight is not quite so noble.

2006 Ron Paul 12:49
I don’t believe those who hide from the truth and refuse to face the reality of the war do so deliberately.   The pain is too great. Deep down, psychologically, many are incapable of admitting such a costly and emotionally damaging error.   They instead become even greater and more determined supporters of the failed policy.

2006 Ron Paul 12:50
I would concede that there are some — especially the die-hard neoconservatives, who believe it is our moral duty to spread American goodness through force and remake the Middle East — who neither suffer regrets nor are bothered by the casualties.   They continue to argue for more war without remorse, as long as they themselves do not have to fight. Criticism is reserved for the wimps who want to “cut and run.”

2006 Ron Paul 12:51
Due to the psychological need to persist with the failed policy, the war proponents must remain in denial of many facts staring them in the face.

2006 Ron Paul 12:52
They refuse to accept that the real reason for our invasion and occupation of Iraq was not related to terrorism.

2006 Ron Paul 12:53
They deny that our military is weaker as a consequence of this war.

2006 Ron Paul 12:54
They won’t admit that our invasion has served the interests of Osama Bin Laden.   They continue to blame our image problems around the world on a few bad apples.

2006 Ron Paul 12:55
They won’t admit that our invasion has served the interests of Iran’s radical regime.

2006 Ron Paul 12:56
The cost in lives lost and dollars spent is glossed over, and the deficit spirals up without concern.

2006 Ron Paul 12:57
They ridicule those who point out that our relationships with our allies have been significantly damaged.

2006 Ron Paul 12:58
We have provided a tremendous incentive for Russia and China, and others like Iran, to organize through the Shanghai Cooperation Organization.   They entertain future challenges to our plans to dominate South East Asia, the Middle East, and all its oil.

2006 Ron Paul 12:59
Radicalizing the Middle East will in the long term jeopardize Israel’s security, and increase the odds of this war spreading.

2006 Ron Paul 12:60
War supporters cannot see that for every Iraqi killed, another family turns on us — regardless of who did the killing. We are and will continue to be blamed for every wrong done in Iraq: all deaths, illness, water problems, food shortages, and electricity outages.  

2006 Ron Paul 12:61
As long as our political leaders persist in these denials, the war won’t end. The problem is that this is the source of the anger, because the American people are not in denial and want a change in policy.

2006 Ron Paul 12:62
Policy changes in wartime are difficult, for it is almost impossible for the administration to change course since so much emotional energy has been invested in the effort. That’s why Eisenhower ended the Korean War, and not Truman. That’s why Nixon ended the Vietnam War, and not LBJ. Even in the case of Vietnam the end was too slow and costly, as more then 30,000 military deaths came after Nixon’s election in 1968.   It makes a lot more sense to avoid unnecessary wars than to overcome the politics involved in stopping them once started. I personally am convinced that many of our wars could be prevented by paying stricter attention to the method whereby our troops are committed to battle.   I also am convinced that when Congress does not declare war, victory is unlikely.

2006 Ron Paul 12:63
The most important thing Congress can do to prevent needless and foolish wars is for every member to take seriously his or her oath to obey the Constitution. Wars should be entered into only after great deliberation and caution. Wars that are declared by Congress should reflect the support of the people, and the goal should be a quick and successful resolution.

2006 Ron Paul 12:64
Our undeclared wars over the past 65 years have dragged on without precise victories. We fight to spread American values, to enforce UN resolutions, and to slay supposed Hitlers.   We forget that we once spread American values by persuasion and setting an example — not by bombs and preemptive invasions.   Nowhere in the Constitution are we permitted to go to war on behalf of the United Nations at the sacrifice of our national sovereignty.   We repeatedly use military force against former allies, thugs we helped empower—like Saddam Hussein and Osama bin Laden—even when they pose no danger to us.

2006 Ron Paul 12:65
The 2002 resolution allowing the president to decide when and if to invade Iraq is an embarrassment. The Constitution authorizes only Congress to declare war. Our refusal to declare war transferred power to the president illegally, without a constitutional amendment. Congress did this with a simple resolution, passed by majority vote. This means Congress reneged on its responsibility as a separate branch of government, and should be held accountable for the bad policy in Iraq that the majority of Americans are now upset about. Congress is every bit as much at fault as the president.

2006 Ron Paul 12:66
Constitutional questions aside, the American people should have demanded more answers from their government before they supported the invasion and occupation of a foreign country.

2006 Ron Paul 12:67
Some of the strongest supporters of the war declare that we are a Christian nation, yet use their religious beliefs to justify the war. They claim it is our Christian duty to remake the Middle East and attack the Muslim infidels. Evidently I have been reading from a different Bible.   I remember something about “Blessed are the peacemakers.”

2006 Ron Paul 12:68
My beliefs aside, Christian teaching of nearly a thousand years reinforces the concept of “The Just War Theory.” This Christian theory emphasizes six criteria needed to justify Christian participation in war. Briefly the six points are as follows:
  1. War should be fought only in self defense;
  2. War should be undertaken only as a last resort;
  3. A decision to enter war should be made only by a legitimate authority;
  4. All military responses must be proportional to the threat;
  5. There must be a reasonable chance of success; and
  6. A public declaration notifying all parties concerned is required.

2006 Ron Paul 12:69
The war in Iraq fails to meet almost all of these requirements. This discrepancy has generated anger and division within the Christian community.

2006 Ron Paul 12:70
Some are angry because the war is being fought out of Christian duty, yet does not have uniform support from all Christians.   Others are angry because they see Christianity as a religion as peace and forgiveness, not war and annihilation of enemies.

2006 Ron Paul 12:71
Constitutional and moral restraints on war should be strictly followed.   It is understandable when kings, dictators, and tyrants take their people into war, since it serves their selfish interests — and those sent to fight have no say in the matter.   It is more difficult to understand why democracies and democratic legislative bodies, which have a say over the issue of war, so readily submit to the executive branch of government.   The determined effort of the authors of our Constitution to firmly place the power to declare war in the legislative branch has been ignored in the decades following WWII.

2006 Ron Paul 12:72
Many members have confided in me that they are quite comfortable with this arrangement.   They flatly do not expect, in this modern age, to formally declare war ever again.   Yet no one predicts there will be fewer wars fought.   It is instead assumed they will be ordered by the executive branch or the United Nations — a rather sad commentary.

2006 Ron Paul 12:73
What about the practical arguments against war, since no one seems interested in exerting constitutional or moral restraints?   Why do we continue to fight prolonged, political wars when the practical results are so bad?   Our undeclared wars since 1945 have been very costly, to put it mildly.   We have suffered over one hundred thousand military deaths, and even more serious casualties.   Tens of thousands have suffered from serious war-related illnesses. Sadly, we as a nation express essentially no concern for the millions of civilian casualties in the countries where we fought.

2006 Ron Paul 12:74
The cost of war since 1945, and our military presence in over 100 countries, exceeds two trillion dollars in today’s dollars. The cost in higher taxes, debt, and persistent inflation is immeasurable.   Likewise, the economic opportunities lost by diverting trillions of dollars into war is impossible to measure, but it is huge. Yet our presidents persist in picking fights with countries that pose no threat to us, refusing to participate in true diplomacy to resolve differences. Congress over the decades has never resisted the political pressures to send our troops abroad on missions that defy imagination.

2006 Ron Paul 12:75
When the people object to a new adventure, the propaganda machine goes into action to make sure critics are seen as unpatriotic Americans or even traitors.

2006 Ron Paul 12:76
The military-industrial complex we were warned about has been transformed into a military-media-industrial-government complex that is capable of silencing the dissenters and cheerleading for war.   It’s only after years of failure that people are able to overcome the propaganda for war and pressure their representatives in Congress to stop the needless killing. Many times the economic costs of war stir people to demand an end.   This time around the war might be brought to a halt by our actual inability to pay the bills due to a dollar crisis.   A dollar crisis will make borrowing 2.5 billion dollars per day from foreign powers like China and Japan virtually impossible, at least at affordable interest rates.

2006 Ron Paul 12:77
That’s when we will be forced to reassess the spending spree, both at home and abroad.

2006 Ron Paul 12:78
The solution to this mess is not complicated; but the changes needed are nearly impossible for political reasons. Sound free market economics, sound money, and a sensible foreign policy would all result from strict adherence to the Constitution.   If the people desired it, and Congress was filled with responsible members, a smooth although challenging transition could be achieved.   Since this is unlikely, we can only hope that the rule of law and the goal of liberty can be reestablished without chaos.

2006 Ron Paul 12:79
We must move quickly toward a more traditional American foreign policy of peace, friendship, and trade with all nations; entangling alliances with none.   We must reject the notion that we can or should make the world safe for democracy.   We must forget about being the world’s policeman. We should disengage from the unworkable and unforgiving task of nation building.   We must reject the notion that our military should be used to protect natural resources, private investments, or serve the interest of any foreign government or the United Nations. Our military should be designed for one purpose: defending our national security.   It’s time to come home now, before financial conditions or military weakness dictates it.

2006 Ron Paul 12:80
The major obstacle to a sensible foreign policy is the fiction about what patriotism means. Today patriotism has come to mean blind support for the government and its policies. In earlier times patriotism meant having the willingness and courage to challenge government policies regardless of popular perceptions.

2006 Ron Paul 12:81
Today we constantly hear innuendos and direct insults aimed at those who dare to challenge current foreign policy, no matter how flawed that policy may be.   I would suggest it takes more courage to admit the truth, to admit mistakes, than to attack others as unpatriotic for disagreeing with the war in Iraq.

2006 Ron Paul 12:82
Remember, the original American patriots challenged the abuses of King George, and wrote and carried out the Declaration of Independence.

2006 Ron Paul 12:83
Yes Mr. Speaker, there is a lot of anger in this country.   Much of it is justified; some of it is totally unnecessary and misdirected.   The only thing that can lessen this anger is an informed public, a better understanding of economic principles, a rejection of foreign intervention, and a strict adherence to the constitutional rule of law.   This will be difficult to achieve, but it’s not impossible and well worth the effort.

2006 Ron Paul Chapter 13
Before the U.S. House of Representatives  

September 7, 2006
Big Government Solutions Don’t Work/ The Law of Opposites

2006 Ron Paul 13:1
Politicians throughout history have tried to solve every problem conceivable to man, always failing to recognize that many of the problems we face result from previous so-called political solutions.   Government cannot be the answer to every human ill.   Continuing to view more government as the solution to problems will only make matters worse.

2006 Ron Paul 13:2
Not too long ago, I spoke on this floor about why I believe Americans are so angry in spite of rosy government economic reports.   The majority of Americans are angry, disgusted, and frustrated that so little is being done in Congress to solve their problems.   The fact is a majority of American citizens expect the federal government to provide for every need, without considering whether government causes many economic problems in the first place.   This certainly is an incentive for politicians to embrace the role of omnipotent problem solvers, since nobody asks first whether they, the politicians themselves, are at fault.

2006 Ron Paul 13:3
At home I’m frequently asked about my frustration with Congress, since so many reform proposals go unheeded.   I jokingly reply, “No, I’m never frustrated, because I have such low expectations.”   But the American people have higher expectations, and without forthcoming solutions, are beyond frustrated with their government.  

2006 Ron Paul 13:4
If solutions to America’s problems won’t be found in the frequent clamor for more government, it’s still up to Congress to explain how our problems develop — and how solutions can be found in an atmosphere of liberty, private property, and a free market order.   It’s up to us to demand radical change from our failed policy of foreign military interventionism.   Robotic responses to the clichés of big government intervention in our lives are unbecoming to members who were elected to offer ideas and solutions.   We must challenge the status quo of our economic and political system.

2006 Ron Paul 13:5
Many things have contributed to the mess we’re in.   Bureaucratic management can never compete with the free market in solving problems.   Central economic planning doesn’t work.   Just look at the failed systems of the 20 th century.   Welfarism is an example of central economic planning.   Paper money, money created out of thin air to accommodate welfarism and government deficits, is not only silly, it’s unconstitutional.   No matter how hard the big spenders try to convince us otherwise, deficits do matter.   But lowering the deficit through higher taxes won’t solve anything.

2006 Ron Paul 13:6
Nothing will change in Washington until it’s recognized that the ultimate driving force behind most politicians is obtaining and holding power.   And money from special interests drives the political process.   Money and power are important only because the government wields power not granted by the Constitution.   A limited, constitutional government would not tempt special interests to buy the politicians who wield power.   The whole process feeds on itself.   Everyone is rewarded by ignoring constitutional restraints, while expanding and complicating the entire bureaucratic state.

2006 Ron Paul 13:7
Even when it’s recognized that we’re traveling down the wrong path, the lack of political courage and the desire for reelection results in ongoing support for the pork-barrel system that serves special interests.   A safe middle ground, a don’t-rock-the-boat attitude, too often is rewarded in Washington, while meaningful solutions tend to offend those who are in charge of the gigantic PAC/lobbyist empire that calls the shots in Washington.   Most members are rewarded by reelection for accommodating and knowing how to work the system.

2006 Ron Paul 13:8
Though there’s little difference between the two parties, the partisan fights are real.   Instead of debates about philosophy, the partisan battles are about who will wield the gavels.   True policy debates are rare; power struggles are real and ruthless.   And yet we all know that power corrupts.

2006 Ron Paul 13:9
Both parties agree on monetary, fiscal, foreign and entitlement policies.   Unfortunately, neither party has much concern for civil liberties.   Both parties are split over trade, with mixed debates between outright protectionists and those who endorse government-managed trade agreements that masquerade as “free trade.”   It’s virtually impossible to find anyone who supports hands-off free trade, defended by the moral right of all citizens to spend their money as they see fit, without being subject any special interest.

2006 Ron Paul 13:10
The big government nanny-state is based on the assumption that free markets can’t provide the maximum good for the largest number of people.   It assumes people are not smart or responsible enough to take care of themselves, and thus their needs must be filled through the government’s forcible redistribution of wealth.   Our system of intervention assumes that politicians and bureaucrats have superior knowledge, and are endowed with certain talents that produce efficiency.   These assumptions don’t seem to hold much water, of course, when we look at agencies like FEMA.   Still, we expect the government to manage monetary and economic policy, the medical system, and the educational system, and then wonder why we have problems with the cost and efficiency of all these programs.

2006 Ron Paul 13:11
On top of this, the daily operation of Congress reflects the power of special interests, not the will of the people- regardless of which party is in power.

2006 Ron Paul 13:12
Critically important legislation comes up for votes late in the evening, leaving members little chance to read or study the bills.   Key changes are buried in conference reports, often containing new legislation not even mentioned in either the House or Senate versions.

2006 Ron Paul 13:13
Conferences were meant to compromise two different positions in the House and Senate bills — not to slip in new material that had not been mentioned in either bill.

2006 Ron Paul 13:14
Congress spends hundreds of billions of dollars in “emergency” supplemental bills to avoid the budgetary rules meant to hold down the deficit.   Wartime spending money is appropriated and attached to emergency relief funds, making it difficult for politicians to resist.

2006 Ron Paul 13:15
The principle of the pork barrel is alive and well, and it shows how huge appropriations are passed easily with supporters of the system getting their share for their district.

2006 Ron Paul 13:16
Huge omnibus spending bills, introduced at the end of the legislative year, are passed without scrutiny.   No one individual knows exactly what is in the bill.

2006 Ron Paul 13:17
In the process, legitimate needs and constitutional responsibilities are frequently ignored.   Respect for private property rights is ignored.   Confidence in the free market is lost or misunderstood.   Our tradition of self-reliance is mocked as archaic.

2006 Ron Paul 13:18
Lack of real choice in economic and personal decisions is commonplace.   It seems that too often the only choice we’re given is between prohibitions or subsidies.   Never is it said, “Let the people decide on things like stem cell research or alternative medical treatments.”

2006 Ron Paul 13:19
Nearly everyone endorses exorbitant taxation; the only debate is about who should pay—either tax the producers and the rich or tax the workers and the poor through inflation and outsourcing jobs.

2006 Ron Paul 13:20
Both politicians and the media place blame on everything except bad policy authored by Congress.   Scapegoats are needed, since there’s so much blame to go around and so little understanding as to why we’re in such a mess.

2006 Ron Paul 13:21
In 1920s and 1930s Europe, as the financial system collapsed and inflation raged, it was commonplace to blame the Jews.   Today in America the blame is spread out:   Illegal immigrants, Muslims, big business (whether they get special deals from the government or not), price gouging oil companies (regardless of the circumstances), and labor unions.   Ignorance of economics and denial of the political power system that prevails in D.C. make it possible for Congress to shift blame.  

2006 Ron Paul 13:22
Since we’re not on the verge of mending our ways, the problems will worsen and the blame games will get much more vicious.   Shortchanging a large segment of our society surely will breed conflict that could get out of control.   This is a good reason for us to cast aside politics as usual and start finding some reliable answers to our problems.

2006 Ron Paul 13:23
Politics as usual is aided by the complicity of the media.   Economic ignorance, bleeding heart emotionalism, and populist passion pervade our major networks and cable channels.   This is especially noticeable when the establishment seeks to unify the people behind an illegal, unwise war.   The propaganda is well-coordinated by the media/government/military/industrial complex.   This collusion is worse than when state- owned media do the same thing.   In countries where everyone knows the media produces government propaganda, people remain wary of what they hear.   In the United States the media are considered free and independent, thus the propaganda is accepted with less questioning.

2006 Ron Paul 13:24
One of the major reasons we’ve drifted from the Founders vision of liberty in the Constitution was the division of the concept of freedom into two parts.   Instead of freedom being applied equally to social and economic transactions, it has come to be thought of as two different concepts.   Some in Congress now protect economic liberty and market choices, but ignore personal liberty and private choices.   Others defend personal liberty, but concede the realm of property and economic transactions to government control.  

2006 Ron Paul 13:25
There should be no distinction between commercial speech and political speech.   With no consistent moral defense of true liberty, the continued erosion of personal and property rights is inevitable.   This careless disregard for liberty, our traditions, and the Constitution have brought us disaster, with a foreign policy of military interventionism supported by the leadership of both parties.   Hopefully, some day this will be radically changed.  

2006 Ron Paul 13:26
The Law of Opposites

2006 Ron Paul 13:27
Everyone is aware of the Law of Unintended Consequences.   Most members of Congress understand that government actions can have unintended consequences, yet few quit voting for government “solutions” — always hoping there won’t be any particular unintended consequences this time.   They keep hoping there will be less harmful complications from the “solution” that they currently support.   Free market economics teaches that for every government action to solve an economic problem, two new ones are created.   The same unwanted results occur with foreign policy meddling.

2006 Ron Paul 13:28
The Law of Opposites is just a variation of the Law of Unintended Consequences.   When we attempt to achieve a certain goal — like, “make the world safe for democracy,” a grandiose scheme of World War I — one can be sure the world will become less safe and less democratic regardless of the motivation.

2006 Ron Paul 13:29
The 1st World War was sold to the American people as the war to end all wars.   Instead, history shows it was the war that caused the 20 th century to be the most war-torn century in history.   Our entry into World War I helped lead us into World War II, the Cold War, the Korean War, and the Vietnam War. Even our current crisis in the Middle East can be traced to the great wars of the 20 th century.   Though tens of millions of deaths are associated with these wars, we haven’t learned a thing.

2006 Ron Paul 13:30
We went into Korea by direction of the United Nations, not a congressional declaration of war, to unify Korea.   And yet that war ensured that Korea remains divided to this day; our troops are still there.   South Korea today is much more willing to reconcile differences with North Korea, and yet we obstruct such efforts.   It doesn’t make much sense.

2006 Ron Paul 13:31
We went into Vietnam and involved ourselves unnecessarily in a civil war to bring peace and harmony to that country.   We lost 60,000 troops and spent hundreds of billions of dollars, yet failed to achieve victory.   Ironically, since losing in Vietnam we now have a better relationship with them than ever.   We now trade, invest, travel, and communicate with a unified, western-leaning country that is catching on rather quickly to capitalist ways.   This policy, not military confrontation, is exactly what the Constitution permits and the Founders encouraged in our relationship with others.

2006 Ron Paul 13:32
This policy should apply to both friends and perceived enemies.   Diplomacy and trade can accomplish goals that military intervention cannot — and they certainly are less costly.

2006 Ron Paul 13:33
In both instances — Korea and Vietnam — neither country attacked us, and neither country posed a threat to our security. In neither case did we declare war.   All of the fighting and killing was based on lies, miscalculations, and the failure to abide by constitutional restraint with regards to war.

2006 Ron Paul 13:34
When goals are couched in terms of humanitarianism, sincere or not, the results are inevitably bad.   Foreign interventionism requires the use of force.   First, the funds needed to pursue a particular policy require that taxes be forcibly imposed on the American people, either directly or indirectly through inflation.   Picking sides in foreign countries only increases the chances of antagonism toward us.   Too often foreign economic and military support means impoverishing the poor in America and enhancing the rich ruling classes in poor countries.   When sanctions are used against one undesirable regime, it squelches resistance to the very regimes we’re trying to undermine.   Forty years of sanctions against Castro have left him in power, and fomented continued hatred and blame from the Cuban people directed at us.   Trade with Cuba likely would have accomplished the opposite, as it has in Vietnam, China, and even in the Eastern Block nations of the old Soviet empire.

2006 Ron Paul 13:35
We spend billions of dollars in Afghanistan and Colombia to curtail drug production.   No evidence exists that it helps.   In fact, drug production and corruption have increased.   We close our eyes to it because the reasons we’re in Colombia and Afghanistan are denied.

2006 Ron Paul 13:36
Obviously, we are not putting forth the full effort required to capture Osama bin Laden.   Instead, our occupation of Afghanistan further inflames the Muslim radicals that came of age with their fierce resistance to the Soviet occupation of a Muslim country.   Our occupation merely serves as a recruiting device for al Qaeda, which has promised retaliation for our presence in their country.   We learned nothing after first allying ourselves with Osama bin Laden when he applied this same logic toward the Soviets.   The net result of our invasion and occupation of Afghanistan has been to miss capturing bin Laden, assist al Qaeda’s recruitment, stimulate more drug production, lose hundreds of American lives, and allow spending billions of American taxpayer dollars with no end in sight.

2006 Ron Paul 13:37
Bankruptcy seems to be the only way we will reconsider the foolishness of this type of occupation.   It’s time for us to wake up.

2006 Ron Paul 13:38
Our policy toward Iran for the past 50 years is every bit as disconcerting.   It makes no sense unless one concedes that our government is manipulated by those who seek physical control over the vast oil riches of the Middle East and egged on by Israel’s desires.

2006 Ron Paul 13:39
We have attacked the sovereignty of Iran on two occasions, and are in the process of threatening her for the third time.   In 1953, the U.S. and British overthrew the democratically elected Mohammed Mossadegh and installed the Shah.   His brutal regime lasted over 25 years, and ended with the Ayatollah taking power in 1979.   Our support for the Shah incited the radicalization of the Shiite Clerics in Iran, resulting in the hostage takeover.

2006 Ron Paul 13:40
In the 1980s we provided weapons — including poisonous gas — to Saddam Hussein as we supported his invasion of Iran.   These events are not forgotten by the Iranians, who see us once again looking for another confrontation with them.   We insist that the UN ignore the guarantees under the NPT that grant countries like Iran the right to enrich uranium.   The pressure on the UN and the threats we cast toward Iran are quite harmful to the cause of peace.   They are entirely unnecessary and serve no useful purpose.   Our policy toward Iran is much more likely to result in her getting a nuclear weapon than prevent it.

2006 Ron Paul 13:41
Our own effort at democratizing Iran has resulted instead in radicalizing a population whose instincts are to like Americans and our economic system.   Our meddling these past 50 years has only served to alienate and unify the entire country against us.

2006 Ron Paul 13:42
Though our officials only see Iran as an enemy, as does Israel, our policies in the Middle East these past 5 years have done wonders to strengthen Iran’s political and military position in the region.   We have totally ignored serious overtures by the Iranians to negotiate with us before hostilities broke out in Iraq in 2003.    Both immediately after 9/11, and especially at the time of our invasion of Iraq in 2003, Iran, partially out of fear and realism, honestly sought reconciliation and offered to help the U.S. in its battle against al Qaeda.   They were rebuked outright.   Now Iran is negotiating from a much stronger position, principally as a result of our overall Middle East policy.

2006 Ron Paul 13:43
We accommodated Iran by severely weakening the Taliban in Afghanistan on Iran’s eastern borders.   On Iran’s western borders we helped the Iranians by eliminating their arch enemy, Saddam Hussein.   Our invasion in Iraq and the resulting chaos have inadvertently delivered up a large portion of Iraq to the Iranians, as the majority Shiites in Iraq ally themselves with Iranians.

2006 Ron Paul 13:44
The U.S./Israeli plan to hit Hezbollah in Lebanon before taking on Iran militarily has totally backfired.   Now Hezbollah, an ally of Iran, has been made stronger than ever with the military failure to rout Hezbollah from southern Lebanon.   Before the U.S./Israeli invasion of Lebanon, Hezbollah was supported by 20% of the population, now it’s revered by 80%.   A democratic election in Lebanon cannot now serve the interest of the U.S. or Israel.   It would only support the cause of radical clerics in Iran.

2006 Ron Paul 13:45
Demanding an election in Palestinian Gaza resulted in enhancing the power of Hamas.   The U.S. and Israel promptly rejected the results.   So much for our support for democratically elected government.

2006 Ron Paul 13:46
Our support for dictatorial Arab leaders is a thorn in the side of the large Muslim population in the Middle East, and one of the main reasons Osama bin Laden declared war against us.   We talk of democracy and self-determination, but the masses of people in the Middle East see through our hypocrisy when we support the Sunni secular dictators in Saudi Arabia, Egypt, and Jordan and at one time, Saddam Hussein.

2006 Ron Paul 13:47
In the late 1970s and the 1980s the CIA spent over $4 billion on a program called “Operation Cyclone.”   This was our contribution to setting up training schools in Pakistan and elsewhere, including the U.S. itself, to teach “sabotage skills.”   The purpose was to use these individuals in fighting our enemies in the Middle East, including the Soviets.   But as one could predict, this effort has come back to haunt us, as our radical ally Osama bin Laden turned his fury against us after routing the Soviets.   It is estimated that over 12,000 fighters were trained in the camps we set up in Afghanistan.   They were taught how to make bombs, carry out sabotage, and use guerilla war tactics.   And now we’re on the receiving end of this U.S. financed program — hardly a good investment.

2006 Ron Paul 13:48
It’s difficult to understand why our policy makers aren’t more cautious in their efforts to police the world, once it’s realized how unsuccessful we have been.   It seems they always hope that next time our efforts won’t come flying back in our face.

2006 Ron Paul 13:49
Our failed efforts in Iraq continue to drain our resources, costing us dearly both in lives lost and dollars spent.    And there’s no end in sight.   No consideration is given for rejecting our obsession with a worldwide military presence, which rarely if ever directly enhances our security.   A much stronger case can be made that our policy of protecting our worldwide interests actually does the opposite by making us weaker, alienating our allies, inciting more hatred, and provoking our enemies.   The more we have interfered in the Middle East in the last 50 years, the greater the danger has become for an attack on us.   The notion that Arab/Muslim radicals are motivated to attack us because of our freedoms and prosperity, and not our unwelcome presence in their countries, is dangerous and silly.

2006 Ron Paul 13:50
We were told we needed to go into Iraq because our old ally, Saddam Hussein, had weapons of mass destruction — yet no weapons of mass destruction were found.

2006 Ron Paul 13:51
We were told we needed to occupy Iraq to remove al Qaeda, yet al Qaeda was nowhere to be found and now it’s admitted it had nothing to do with 9/11.   Yet today, Iraq is infested with al Qaeda — achieving exactly the opposite of what we sought to do.

2006 Ron Paul 13:52
We were told that we needed to secure “our oil” to protect our economy and to pay for our invasion and occupation.   Instead, the opposite has resulted:   Oil production is down, oil prices are up, and no oil profits have been used to pay the bills.

2006 Ron Paul 13:53
We were told that a regime change in Iraq would help us in our long-time fight with Iran, yet everything we have done in Iraq has served the interests of Iran.

2006 Ron Paul 13:54
We’re being told in a threatening and intimidating fashion that,   “If America were to pull out before Iraq could defend itself, the consequences would be absolutely predictable and absolutely disastrous.”   I’m convinced that the Law of Opposites could well apply here.   Going into Iraq we know produced exactly the opposite results of what was predicted:   Leaving also likely will have results opposite of those we’re being frightened with.   Certainly leaving Vietnam at the height of the Cold War did not result in the disaster predicted by the advocates of the Domino Theory — an inevitable Communist takeover of the entire Far East.

2006 Ron Paul 13:55
We’re constantly being told that we cannot abandon Iraq and we are obligated to stay forever if necessary.   This admonition is similar to a rallying cry from a determined religious missionary bent on proselytizing to the world with a particular religious message.   Conceding that leaving may not be a panacea for Iraqi tranquility, this assumption ignores two things.   One, our preemptive war ignited the Iraqi civil war, and two, abandoning the Iraqi people is not the question.   The real question is whether or not we should abandon the American people by forcing them to pay for an undeclared war with huge economic and human costs, while placing our national security in greater jeopardy by ignoring our borders and serious problems here at home.

2006 Ron Paul 13:56
In our attempt to make Iraq a better place, we did great harm to Iraqi Christians.   Before our invasion in 2003 there were approximately 1.2 million living in Iraq.   Since then over half have been forced to leave due to persecution and violence.   Many escaped to Syria.   With the neo-cons wanting to attack Syria, how long will they be safe there?    The answer to the question,   “Aren’t we better off without Saddam Hussein,” is not an automatic yes for Iraqi Christians.

2006 Ron Paul 13:57
We’ve been told for decades that our policy of militarism and preemption in the Middle East is designed to provide security for Israel.   Yet a very strong case can be made that Israel is more vulnerable than ever, with moderate Muslims being challenged by a growing majority of Islamic radicals.   As the invincibility of the American and Israeli military becomes common knowledge, Israel’s security is diminished and world opinion turns against her, especially after the failed efforts to remove the Hezbollah threat.

2006 Ron Paul 13:58
We were told that attacking and eliminating Hezbollah was required to diminish the Iranian threat against Israel.   The results again were the opposite.   This failed effort has only emboldened Iran.

2006 Ron Paul 13:59
The lack of success of conventional warfare — the U.S. in Vietnam, the Soviets in Afghanistan, the U.S. in Iraq and Afghanistan, Israel in Lebanon — should awaken our policy makers to our failure in war and diplomacy.   Yet all we propose are bigger bombs and more military force for occupation, rather than working to understand an entirely new generation of modern warfare.

2006 Ron Paul 13:60
Many reasons are given for our preemptive wars and military approach for spreading the American message of freedom and prosperity, which is an obvious impossibility.   Our vital interests are always cited for justification, and it’s inferred that those who do not support our militancy are unpatriotic.   Yet the opposite is actually the case: Wise resistance to one’s own government doing bad things requires a love of country, devotion to idealism, and respect for the Rule of Law.

2006 Ron Paul 13:61
In attempting to build an artificial and unwelcome Iraqi military, the harder we try, the more money we spend, and the more lives we lose, the stronger the real armies of Iraq become:   the Sunni insurgency, the Bardr Brigade, the Sardr Mahdi Army, and the Kurdish militia.

2006 Ron Paul 13:62
The Kurds have already taken a bold step in this direction by hoisting a Kurdish flag and removing the Iraqi flag — a virtual declaration of independence.   Natural local forces are winning out over outside political forces.

2006 Ron Paul 13:63
We’re looking in all the wrong places for an Iraqi army to bring stability to that country.   The people have spoken and these troops that represent large segments of the population need no training.   It’s not a lack of training, weapons, or money that hinders our efforts to create a new superior Iraqi military.   It’s the lack of inspiration and support for such an endeavor that is missing.   Developing borders and separating the various factions, which our policy explicitly prohibits, is the basic flaw in our plan for a forced, unified, western-style democracy for Iraq.   Allowing self-determination for different regions is the only way to erase the artificial nature of Iraq — an Iraq designed by western outsiders nearly 80 years ago. It’s our obsession with control of the oil in the region, and imposing our will on the Middle East, and accommodating the demands of Israel that is the problem.   And the American people are finally getting sick and tired of their sacrifices.   It’s time to stop the bleeding.

2006 Ron Paul 13:64
Instead we continue to hear the constant agitation for us to confront the Iranians with military action.   Reasons to attack Iran make no more sense than our foolish preemptive war against Iraq.   Fictitious charges and imaginary dangers are used to frighten the American people into accepting an attack on Iran.   First it may only be sanctions, but later it will be bombs and possible ground troops if the neo-cons have their way.   Many of the chicken-hawk neo-conservative advisors to the administration are highly critical of our current policy because it’s not aggressive enough.   They want more troops in Iraq, they want to attack Syria and Iran, and escalate the conflict in Lebanon.

2006 Ron Paul 13:65
We have a troop shortage, morale is low, and our military equipment is in bad shape, yet the neo-cons would not hesitate to spend, borrow, inflate, and reinstate the draft to continue their grandiose schemes in remaking the entire Middle East.   Obviously a victory of this sort is not available, no matter what effort is made or how much money is spent.

2006 Ron Paul 13:66
Logic would tell us there’s no way we will contemplate taking on Iran at this time.   But logic did not prevail with our Iraq policy, and look at the mess we have there.   Besides, both sides, the neo-con extremists and the radical Islamists, are driven by religious fervor. Both are convinced that God is on their side — a strange assumption since theologically it’s the same God.

2006 Ron Paul 13:67
Both sides of the war in the Middle East are driven by religious beliefs of omnipotence.   Both sides endorse an eschatological theory regarding the forthcoming end of time.   Both anticipate the return of God personified and as promised to each.   Both sides are driven by a conviction of perfect knowledge regarding the Creator, and though we supposedly worship the same God, each sees the other side as completely wrong and blasphemous.   The religiously driven Middle East war condemns tolerance of the other’s view.   Advocates of restraint and the use of diplomacy are ridiculed as appeasers, and equivalent to supporting Nazism and considered un-American and un-Christian.

2006 Ron Paul 13:68
I find it amazing that we in this country seem determined to completely separate religious expression and the state, even to the detriment of the 1 st Amendment.   Yet we can say little about how Christian and Jewish religious beliefs greatly influences our policies in the Middle East.   It should be the other way around.   Religious expression, according to the 1 st Amendment, cannot be regulated anywhere by Congress or the federal courts.   But deeply held theological beliefs should never dictate our foreign policy.   Being falsely accused of anti-Semitism and being a supporter of radical fascism is not an enviable position for any politician.   Most realize it’s best to be quiet and support our Middle East involvement.

2006 Ron Paul 13:69
Believing we have perfect knowledge of God’s will, and believing government can manage our lives and world affairs, have caused a great deal of problems for man over the ages.   When these two elements are combined they become especially dangerous.   Liberty, by contrast, removes power from government and allows total freedom of choice in pursuing one’s religious beliefs.   The only solution to controlling political violence is to prohibit the use of force to pursue religious goals and reject government authority to mold the behavior of individuals.

2006 Ron Paul 13:70
Both are enamored with the so-called benefit that chaos offers to those promoting revolutionary changes.   Both sides in situations like this always underestimate the determination of the opposition, and ignore the law of unintended consequences.   They never consider that these policies might backfire.

2006 Ron Paul 13:71
Declaring war against Islamic fascism or terrorism is vague and meaningless.   This enemy we’re fighting at the expense of our own liberties is purposely indefinable.   Therefore the government will exercise wartime powers indefinitely.   We’ve been fully warned to expect a long, long war.

2006 Ron Paul 13:72
The Islamic fascists are almost impossible to identify and cannot be targeted by our conventional weapons.   Those who threaten us essentially are unarmed and stateless.   Comparing them to Nazi Germany, a huge military power, is ridiculous.   Labeling them as a unified force is a mistake.   It’s critical that we figure out why a growing number of Muslims are radicalized to the point of committing suicide terrorism against us.   Our presence in their countries represents a failed policy that makes us less safe, not more.

2006 Ron Paul 13:73
These guerilla warriors do not threaten us with tanks, gunboats, fighter planes, missiles, or nuclear weapons, nor do they have a history of aggression against the United States.   Our enemy’s credibility depends instead on the popular goal of ending our occupation of their country.

2006 Ron Paul 13:74
We must not forget that the 9/11 terrorists came principally from Saudi Arabia, not Iraq, Iran, Lebanon, or Syria.   Iran has never in modern times invaded her neighbors, yet we worry obsessively that she may develop a nuclear weapon someday.   Never mind that a radicalized Pakistan has nuclear weapons; our friend Musharraf won’t lift a finger against Bin Laden, who most likely is hiding there.   Our only defense against this emerging nuclear threat has been to use, and threaten to use, weapons that do not meet the needs of this new and different enemy.

2006 Ron Paul 13:75
Since resistance against the Iraq war is building here at home, hopefully it won’t be too long before we abandon our grandiose scheme to rule the entire Middle East through intimidation and military confrontation.

2006 Ron Paul 13:76
Economic law eventually will prevail.   Runaway military and entitlement spending cannot be sustained.   We can tax the private economy only so much, and borrowing from foreigners is limited by the total foreign debt and our current account deficit.   It will be difficult to continue this spending spree without significantly higher interest rates and further devaluation of the dollar.   This all spells more trouble for our economy and certainly higher inflation.   Our industrial base is shattered and our borders remain open to those who exploit our reeling entitlement system.

2006 Ron Paul 13:77
Economic realities will prevail, regardless of the enthusiasm by most members of Congress for a continued expansion of the welfare state and support for our dangerously aggressive foreign policy.   The welfare/warfare state will come to an end when the dollar fails and the money simply runs out.

2006 Ron Paul 13:78
The overriding goal should then be to rescue our constitutional liberties, which have been steadily eroded by those who claim that sacrificing civil liberties is required and legitimate in times of war — even the undeclared and vague war we’re currently fighting.

2006 Ron Paul 13:79
A real solution to our problems will require a better understanding of, and greater dedication to, free markets and private property rights.   It can’t be done without restoring a sound, asset-backed currency.   If we hope to restore any measure of constitutional government, we must abandon the policy of policing the world and keeping troops in every corner of the earth.   Our liberties and our prosperity depend on it.