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Stop The Printing Press

By Congressman Ron Paul

Statement before the US House of Representatives Financial Services Committee, Humphrey Hawkins Hearing on Monetary Policy, July 16, 2008

Mr. Chairman, today we find ourselves on the verge of an economic crisis the likes of which the United States has not seen in decades. Our economy is very clearly in a recession, and every time someone tells us that the worst has passed, another serious event takes place, as we saw once again last week and early this week. Everyone now realizes that the situation is dire, yet either no one understands the cause behind the credit crisis, or no one is willing to take the necessary steps to ensure as orderly an end to the crisis as possible. Instead, we hear talk of further bailouts. The Fed-brokered takeover of Bear Stearns, a supposed one-off incident, has now been joined by a potential bailout of the Government-Sponsored Enterprises, Fannie Mae and Freddie Mac.

The two GSE's have been disasters waiting to happen, as I and many others have warned over the years. It was bad enough that Fannie and Freddie were able to operate with significant advantages, such as lower borrowing costs and designation of their debt as government debt. Now, the implicit government backstop has turned out to be an explicit backstop, just as we feared. The Greenspan reflation of the economy after the dot-com bust pumped additional liquidity into an already-skewed housing market, leading to an unsustainable boom that from many accounts has only begun to unravel. With a current federal funds rate of two percent, and inflation at over four percent, the Fed is currently sowing the seeds for another economic bubble.

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Obama's Capital Gains Tax Folly

Barrack Obama is promising a lot of change and hope. That sounds nice, but I will pass on the hope. After all, even if Mr. Obama screws the country up like we have never seen, there will still be hope. I'll pass on his idea of change, too. Indeed, almost every one of his proposed policy changes are outrageous and contrary to American values. There is one policy that Mr. Obama has in store that on the surface is just another democrat staple, higher taxes. However, the effects could be felt much more than usual.  Mr. Obama has said that he wants to CHANGE the capital gains tax from 15% to 30%. What is the capital gains tax? Simply put, it is money you make on investments. He wants to increase the amount of money the government takes from your investments. How does that sound for HOPE?  

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A Question About Security

We are told by our politicians that we are fighting the war on terror. Let's face it. There are as many opinions on the war in the Middle East as there are people who care about our country. Some people feel it is a necessary fight against a global terror threat. Some people feel it is a senseless fight. Some people think America is the one spreading terror. The opinions run the gambit. Opinions aside, there is a question that has stuck in my head for some time. It seems logical to share it. It is a simple question, but one that is compelling.So here is the question: If the threat of a terror attack on America is so high, why are the borders left wide open and unchecked?

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