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2005 Ron Paul Chapter 33

Not linked on Ron Paul’s Congressional website.

Congressional Record [.PDF]

The Deficit
16 March 2005

Mr. ENGLISH of Pennsylvania. Mr. Chairman, I yield 7 minutes to the distinguished gentleman from Texas (Mr. PAUL), a fellow member of the Joint Economic Committee.

(Mr. PAUL asked and was given permission to revise and extend his remarks.)

2005 Ron Paul 33:1
Mr. PAUL. Mr. Chairman, I thank the gentleman for yielding me this time.

2005 Ron Paul 33:2
Mr. Chairman, I appreciate very much this opportunity to talk about the budget. In listening to the debate today on both sides of the aisle, there has been a lot of expression of concern about the deficit; and, of course, I am very concerned about the deficit as well.

2005 Ron Paul 33:3
But I would like to make a suggestion that we are not facing primarily a budgetary crisis or a budgetary problem. I see this more as a philosophic problem, dealing more with the philosophy of government rather than thinking that we can tinker with the budget, dealing with this as a tactical problem when really it is a strategic problem. So as long as we endorse the type of government that we have and there is a willingness for the people as well the Congress to finance it, we are going to continue with this process and the frustrations are going to grow because it is just not likely that these deficits will shrink.

2005 Ron Paul 33:4
And the gentleman from Pennsylvania rightly pointed out the concerns this might have in the financial markets. I am hoping that his optimism pans out because, indeed, if they do not, there could be some ramifications from these expanding deficits and what it means to our dollar.

2005 Ron Paul 33:5
But I would like to suggest that in dealing with the budget itself, I see only one problem that we have. And that problem to me is the budget is too big, and I would like to shrink the budget. I have toyed with the idea over the years to introduce and offer a constitutional budget to the House floor. That would not be too difficult because the budget would be so much smaller. It would mean essentially that if one is a strict constitutionalist that they would cut the budget approximately 80 percent.

2005 Ron Paul 33:6
What would that mean to the economy? It would be a boost because we would be injecting $2 trillion back into the economy, allowing the people to spend their own money. But being pretty realistic, I know that is not likely to happen or be offered or even be able to present that on the House floor. Besides, it could be rather embarrassing to bring something like that to the floor. Not so much embarrassing to me, because I am accustomed to voting in a small group of people on many occasions; but it could be embarrassing to others because, for the most part, most Members would not even conceive of the idea of having a strict interpretation of the Constitution and severely limiting the budget. So we would not want to put everybody on record for that.

2005 Ron Paul 33:7
The other day I heard an interview with one of our Members, and he was asked about a particular program about where the authority came from in the Constitution for that program. And his answer was very straightforward; and he explained that in the Constitution there was no prohibition against that program, so therefore it was permitted. In his mind, as it is in the minds of many Members of Congress, if there is no strict prohibition, it is permitted.

2005 Ron Paul 33:8
And that is just absolutely opposite of what was intended by the authors of the Constitution that we would only be able to do those things which are explicitly permitted in the Congress, and they are spelled out rather clearly in article I, section 8.

2005 Ron Paul 33:9
And then we are given the permission to write the laws that are necessary and proper to implement those powers that are delegated to us. Those powers that are not delegated are reserved to the States and to the people. So it means that those things that are not prohibited are permitted, but I would say that the conventional wisdom today is that people accept the notion that we can do anything that we want as long as it is not prohibited by the Constitution.

2005 Ron Paul 33:10
I think this improper understanding and following of the Constitution has brought us closer to a major crisis in this country, a crisis of our personal liberties, a crisis in our foreign policy, as well as a crisis in our budgeting.

2005 Ron Paul 33:11
But it is not simply the ignoring of the Constitution that I think is our problem. I think our other problem is our country and our people and our Congresses and our Senators have accepted the notion of faith in government, faith in the State, that the State can provide these great services and do it efficiently.

2005 Ron Paul 33:12
Really, there are only two areas that would have to be cut if we were to strive for a constitutional budget. There are only two things that we would have to cut, and it would be welfare and warfare. And then we would get back to some fundamentals. During World War I, a gentleman by the name of Randolph Bourne wrote a pamphlet called “War is the Health of the State,” and I truly believe that. When we are at war, we are more likely to sacrifice our liberties; and, of course, we spend more money that we really have. I would like to suggest a corollary, that peace is the foundation of liberty because that is what the goal of all government should be: the preservation of liberty.

2005 Ron Paul 33:13
We have endorsed a program with this interpretation that spending is going to be endlessly increased, and we have devised a system whereby we have ignored the constraints through monetary policy by not only are we taxing too much and borrowing too much; we have now since 1971 endorsed a monetary system that if we come up short we just print the money. And I would suggest to the gentlewoman that one of the reasons why the workers’ purchasing power is going down is we print too many dollars and they are the ones who are most likely and first to suffer from inflation.

2005 Ron Paul 33:14
And it is the philosophy of government and our philosophy on money that encourages these problems. And the current account deficits and this huge foreign indebtedness that are encouraged by our ability to maintain a reserve currency, it is going to lead to a crisis where this spending will have to come in check.

2005 Ron Paul 33:15
And that is why the gentleman from Pennsylvania is quite correct that we should be concerned about how the financial markets look at what we do. And hopefully we will be able to deal with this in a budgetary way and institute some restraints. But quite frankly I am a bit pessimistic about that. This program that we follow and this philosophy we followed prompted our Federal Reserve to create $620 billion in order to finance the system. That is the reason that the dollar becomes less valuable, because we just print too many to accommodate the politicians and the people who enjoy the excessive spending.

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