Category Archives: Texas Straight Talk

Ron Paul: End the Fed and Restore Sound Money

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by Ron Paul

Last week I held a hearing to examine the various proposals that have been put forth both to mend and to end the Fed. The purpose was to spur a vigorous and long-lasting discussion about the Fed’s problems, hopefully leading to concrete actions to rein in the Fed.

First, it is important to understand the Federal Reserve System. Some people claim it is a secret cabal of elite bankers, while others claim it is part of the federal government. In reality it is a bit of both. The Federal Reserve System is the collusion of big government and big business to profit at the expense of taxpayers. The Fed’s bailout of large banks during the financial crisis propped up poorly-run corporations that should have gone under, giving them a market-distorting advantage that no business in the United States should receive. The recent news about JP Morgan is a case in point. JP Morgan, a recipient of $25 billion in bailout money, recently announced it lost another $2 billion. If a corporation shows itself to be a bottomless money pit of “errors, sloppiness and bad judgment,” the Fed shouldn’t have expected $25 billion in free money to change that or teach anyone a lesson in fiscal discipline. But it determined that this form of deliberate capital destruction was preferable to one business suffering bankruptcy. Clearly, some changes need to be made.

Several reforms for the Fed were discussed at the hearing. One was a call for the full employment mandate to be repealed, in order to allow the Fed to focus solely on stable prices.

Another reform calls for changes to the composition of the Federal Open Market Committee. Still another proposal was for outright nationalization of the Fed or of its functions. But if what the Fed does now is bad and inflationary, allowing the Treasury to print and issue money at-will would be even worse, and could possibly lead to a Weimar-like hyperinflation.

The problems and advantages of the gold standard were discussed at the hearing. The era of the classical gold standard was undoubtedly one of the greatest eras in human history. For a period of several decades in the late 19th century, the West made enormous advances. However, the gold standard was still run by government. The temptation to suspend gold redemption reared its head again with the outbreak of World War I. Once the tie to gold was severed and fiscal restraint thrown to the wind, undoing the damage would have required great fiscal austerity. Instead, the Western world proceeded to set up a gold-exchange standard which lasted not even a decade before easy money led to the Great Depression.

While returning to the gold standard would certainly be far better than maintaining the current fiat paper system, as long as the government retains the power to go off gold we may end up repeating the same mistakes.

The only viable solution is to get government out of the money business permanently. The way to bring this about is through currency competition: allow parallel currencies to circulate without receiving any special recognition or favor from the government. Fiat paper monetary standards throughout history have always collapsed due to their inflationary nature, and our current fiat paper standard will be no different.

It is imperative that the American people be educated on the dangers of the Fed and the importance of restoring sound money. The laying of the groundwork must begin today, so that the American people will be prepared for the day when the mirage the Fed has created evaporates completely. The full hearing footage is available on my website and I would encourage every American to take a look.

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Ron Paul: Mr. President, Let’s Come Home from Afghanistan

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by Ron Paul

Last week President Obama made a surprise pre-dawn trip to Afghanistan to mark the one year anniversary of the killing of Osama bin Laden and to sign a document further extending the US presence in that country. The president said, “we’re building an enduring partnership…As you stand up, you will not stand alone.” What that means in practice is that the US will continue its efforts to prop up the government in Afghanistan for another ten years beyond the promised withdrawal date of 2014.

To those of us who believe the US should leave Afghanistan immediately, the president retorted, “We must give Afghanistan the opportunity to stabilize.” But how long will that take, when we have already fought the longest war in our nation’s history at incredible human and economic cost to the nation and no end is in sight?

There is little evidence of any sustained increase in stability in Afghanistan and, in fact, April saw the loss of 34 more American troops and an escalation of violence and upheaval. Within 90 minutes of the president’s departure, seven more people were killed in Kabul by a suicide bomber. It is clear that our presence in that country is not creating any real stability. With Osama bin Laden dead and the al Qaeda presence in Afghanistan virtually non-existent, we are reduced to nation-building in a nation where there is no real nation to build.

We should ask ourselves why Obama’s trip was a “surprise” visit rather than a normal state visit. The reason is that after ten years it is still far too dangerous to travel in or out of that country. Does that not speak much more loudly than the president’s optimistic words about the amazing progress we have made in Afghanistan?

What does our enduring commitment mean? Ask the South Koreans, where the United States has maintained an “enduring commitment” of US troops more than fifty years after hostilities ended. By some estimates the United States taxpayer is saddled with a 40 billion dollar annual price tag for our “enduring commitment” to maintaining a US military presence in Korea. Polls suggest that particularly younger Koreans are tired of the US military presence in their country and would prefer us to leave. The same is true for the residents of Okinawa, who have argued strongly and with some recent success for American troops to leave their island.

The Soviets believed the road to their goal for a universal form of government ran through Afghanistan. They were also wrong and paid an enormous price. However, after nine years and 15,000 Soviet lives lost, the communist regime in Moscow realized its mistake and withdrew from that country. The Soviet withdrawal was complete in early 1989. The Soviet Union by that time had further plunged into economic crisis, fueled in great part by its commitment to maintain a global empire of client states. Later that year, the Soviet world began crashing down, with first the collapse of Eastern European regimes and then the Soviet Union itself. That collapse produced an economic calamity for the successor states from which most have not yet fully recovered. It is not too late for the United States to learn what the Soviets discovered too late, back in 1989. Mr. President: the time to leave Afghanistan is today, not in 2024.

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Ron Paul: Founders Would Be Horrified by Pro-Obamacare Legislators

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by Ron Paul

Last week President Obama made some rather shocking comments at a press conference regarding the Supreme Court’s deliberation on the constitutionality of the Patient Protection and Affordable Care Act, or Obamacare. His comments belie a grasp of constitutional concepts so lacking that perhaps the University of Chicago Law School should offer a refund to any students “taught” constitutional law by then-Professor Obama!

He said, “Ultimately, I’m confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.” It almost sounds as if he believes the test of constitutionally is whether a majority approves of the bill, as opposed to whether the legislation lies within one of the express powers of the federal government. In fact, the very design of the Constitution, with power split amongst two branches of the legislature which write the laws, an executive who administers the laws, and an independent judiciary which resolves disputes regarding meaning of the laws, was designed to thwart popular will and preserve liberty.

President Obama continued in his comments, “For years, what we’ve heard is the biggest problem on the bench was judicial activism or a lack of judicial restraint, that an unelected group of people would somehow overturn a duly constituted and passed law. Well, there’s a good example, and I’m pretty confident that this court will recognize that and not take that step.”

President Obama seems to misunderstand that the criticism of an activist judiciary is not that it is overturning unconstitutional federal laws, but instead that it is usurping the authority to intervene in areas, such as abortion, where the Constitution reserves authority to the states. In fact, upholding clearly unconstitutional laws such as Obamacare because the justices bowed to the “will of the people” or believed the individual mandate was good social policy could be considered an example of judicial activism.

The founders never intended the judiciary to have the last word on whether or not a law is constitutional. The judiciary is equal to the Congress and the President, not superior. Representatives, senators, presidents, and judges all have an independent duty to determine a law’s constitutionality. The founders would be horrified by the attitude of many lawmakers that they can pass whatever laws they want and federal judges will then determine whether or not the law is constitutional.

Additionally, state governments have the authority to protect their citizens from federal laws that threaten liberty. If the Supreme Court rules that Obamacare is constitutional, I hope state legislators will exercise their powers to pass legislation allowing their citizens to opt-out of the national health care plan.

Unfortunately, even many of my colleagues who correctly argue Obamacare’s unconstitutionality support the President when he asserts the power to send troops into battle without a declaration of war, or have citizens indefinitely detained and even assassinated on little more than his own authority. Other of my colleagues not only cheer the unconstitutional monstrosity of Obamacare, but support the President’s actions to defy the Senate’s appointment powers, and legislate by executive order.

Even worse, some members will only challenge a President’s unconstitutional actions if the President is from a different political party. The defeat of Obamacare in the courts would provide a stark reminder that the limits of government are set by the Constitution, not the will of the President, Congress, or even the Supreme Court. However, the victory would be short lived as long as the legislative branch refuses to do its duty to abide by the Constitutional limits and exercises its powers to ensure the other two branches do likewise.

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Ron Paul: In Praise of Private Charity

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by Ron Paul

One of the great fallacies of our time is that if government doesn’t do something, no one will. Its corollary is that if you are opposed to the government doing something, that you are opposed to anyone performing that function at all. These disastrous fallacies color much of our national debate concerning heath care, education, poverty, housing, and disaster relief, and other issues.

This Easter season, I would like to applaud an organization that proves just how much private charity can accomplish without government mandates or intrusion. Convoy of Hope, based in Springfield, Missouri is equal parts grocer, clothier, heath care provider, first responder, educator, and logistics expert. It works with communities across America and around the world, bringing together other local charities, businesses, churches, and government agencies to alleviate poverty and help people in the wake of disasters. The tremendous scope of its activities serves as a reminder that government is neither the sole, nor the best, provider of goods and services to people in need.

I recently had the privilege of touring Convoy of Hope’s headquarters and distribution center. It was a humbling but encouraging experience. Frankly, I’ve never seen an organization so focused, efficient, and poised to do so much good for so many people.

Convoy of Hope was founded by Hal and David Donaldson in 1994, who, as young boys suffered the death of their father and subsequent poverty. Both men were struck by the outpouring of support their family received during that time from local churches and the community. As a result, the two brothers developed a deep sense of responsibility to helping others in need. Convoy of Hope has since helped more than 50 million individuals in more than 100 countries– giving away nearly $300 million worth of food and supplies in the process.

They typically spend only about 10% of their budget on overhead while employing a small staff of approximately 85 people. Watchdog group Charity Navigator consistently gives Convoy of Hope high marks for both its financial acumen and transparency.

Convoy of Hope also stretches its resources by developing strategic partnerships with private sector corporations, including Coca Cola, Nestle, Procter & Gamble, Georgia Pacific, Cargill, Del Monte, and FedEx. These corporate donors donate everything from building supplies to bottled water to toiletries. Its massive distribution center and headquarters are centrally located in Missouri, where its fleet of trucks can dispatch quickly to any location in America. It also operates six international distribution centers for logistical efficiency.

The next step for Convoy of Hope is an audacious one: a 50 state tour beginning in May designed to address poverty across the United States. The “Convoy of Hope Tour” will provide an average of $1 million in goods and services to a community in a single day. Convoy of Hope’s fleet of 18 wheel trucks will roll through every state, providing a wide variety of goods and practical services to those in need, including groceries, job counseling, clothing, dental care, breast cancer screenings, haircuts, family portraits, children’s activities, as well as prayer and connections with local churches.

Convoy of Hope is doing tremendous work on behalf of mankind. I wish everyone at Convoy of Hope great success with their upcoming tour. It’s hard to imagine a government agency operating as efficiently, as nimbly, or as cheerfully as Convoy of Hope. I truly believe it should serve as a model for private, voluntary, nongovernmental solutions to poverty and disaster relief in our communities.

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Ron Paul: No More Mandates!

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by Ron Paul

Last week the Supreme Court heard arguments concerning the constitutionality of the Obamacare law, focusing on the mandate requiring every American to buy health insurance or pay fines enforced by the IRS. Hopefully the Court will strike down this abomination, but we must recognize that the federal judiciary has an abysmal record when it comes to protecting liberty. It’s doubtful the entire law will be struck down. Regardless, the political left will continue its drive toward a single-payer, government run health care system.

The insurance mandate clearly exceeds the federal government’s powers under the interstate commerce clause found in Article I, Section 8 of the Constitution. This is patently obvious: the power to “regulate” commerce cannot include the power to compel commerce! Those who claim otherwise simply ignore the plain meaning of the Constitution because they don’t want to limit federal power in any way.

The commerce clause was intended simply to give Congress the power to regulate foreign trade, and also to prevent states from imposing tariffs on interstate goods. In Federalist Paper No. 22, Alexander Hamilton makes it clear the simple intent behind the clause was to prevent states from placing tolls or tariffs on goods as they passed through each state– a practice that had proven particularly destructive across the many principalities of the German empire.

But the Supreme Court has utterly abused the commerce clause for decades, at least since the infamous 1942 case of Wickard v. Filburn. In that instance the Court decided that a farmer growing wheat for purely personal use still affected interstate commerce–presumably by not participating in it! As economist Thomas Sowell explains in a recent article, the Wickard case marked the final death of federalism: if the federal government can regulate “anything with any potential effect on interstate commerce, the 10th Amendment’s limitations on the power of the federal government virtually disappeared.”

It is precisely this lawless usurpation of federalism that liberty-minded Americans must oppose. Why should a single swing vote on the Supreme Court decide if our entire nation is saddled with Obamacare? The doctrine of judicial review, which is nowhere to be found in Article III of the Constitution, has done nothing to defend liberty against extra-constitutional excesses by government. It is federalism and states’ rights that should protect our liberty, not nine individuals on a godlike Supreme Court.

While I’m heartened that many conservatives understand this mandate exceeds the strictly enumerated powers of Congress, there are many federal mandates conservatives casually accept. The Medicare part D bill– passed under a Republican President and a Republican House–mandates that you submit payroll taxes to provide prescription drugs to seniors. The Sarbanes-Oxley bill, also passed by Republicans, mandates that companies expend countless hours of costly manpower producing useless reports. Selective service laws, supported by defense hawks, mandate that young people sign up for potential conscription. I understand the distinction between these mandates and Obamacare, but the bigger point is that Congress routinely imposes mandates that are wildly beyond the scope of Article I, Section 8.

Perhaps the most important lesson from Obamacare is that while liberty is lost incrementally, it cannot be regained incrementally. The federal leviathan continues its steady growth; sometimes boldly and sometimes quietly. Obamacare is just the latest example, but make no mistake: the statists are winning. So advocates of liberty must reject incremental approaches and fight boldly for bedrock principles. We must forcefully oppose lawless government, and demand a return to federalism by electing a Congress that legislates only within its strictly limited authority under Article I, Section 8.

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Ron Paul: Stop the Fed’s Covert Bailout of Europe

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by Ron Paul

This week, my congressional committee will hold a hearing to examine how the Federal Reserve bails out European banks, propping up spendthrift European governments in the process. Unfortunately this bailout comes at the expense of American citizens, in the form of higher prices and diminished savings down the road.

A good analysis of the Fed’s “swap” scheme first appeared in the Wall Street Journal back in December, in an article by Gerald O’Driscoll entitled, “The Federal Reserve’s Covert Bailout of Europe.” Essentially, beginning late last year the Fed provided U.S. dollars to the European Central Bank in exchange for Euros– sometimes as much as $100 billion at a time. The ECB then funneled those dollars to European banks to provide liquidity and prevent crises from bank insolvencies. Since the currency swap was not technically a loan, the Fed did not have to embarrass itself by openly showing foreign bank debt on its balance sheet. The ECB meanwhile did not have to print new Euros and expose the true fragility of big European banks.

The entire purpose of this unholy arrangement was to obscure the truth: namely that the Fed was bailing out Europe with U.S. dollars.

But why is it the business of the Federal Reserve to bail out European banks that find themselves short of dollars to pay their dollar-denominated contracts? After all, those

contracts often were hedges taken to protect banks against weakness of the Euro. Hedges are supposed to reduce risk, but banks that miscalculate should suffer their own losses accordingly. It’s not our business if the ECB chooses to create moral hazards by providing liquidity to European banks, but why should the Fed prop up Europe’s bad decisions!

The Fed has promised to provide unlimited amounts of dollars to the ECB, should circumstances require it. It boggles the mind. Of course when Fed officials first entered into these swap agreements with the ECB last September, they did so quietly. The American public only found out via websites of the ECB, the Bank of England, or the Swiss Central Bank.

The Fed already has pumped trillions of dollars into the economy since 2008, and US banks currently hold $1.5 trillion of excess reserves. So why don’t American banks lend those excess trillions to European banks if they really need dollars? If US banks could earn 1 or 2 percent on those loans, they might just be interested. But they can’t compete with the ½ percent interest rate charged by the Fed to the ECB. That’s one glaring example of the harm caused by the Fed’s ability to create money and loan it at below-market interest rates.

The Fed argues that these loans will be temporary, merely providing a little boost to get Europe over the hump. But that’s what they thought a few years ago when such lines of credit to the ECB were set to expire, only to see the Fed reauthorize them. What happens if the European financial system collapses? Will the Fed be left holding a bunch of worthless Euros? Will the ECB simply shrug and turn over the collateral it received from European banks, maybe in the form of bonds from Ireland, Italy, or Greece? Have the 17 individual central banks backing the ECB pledged their gold holdings as collateral?

The Fed has placed a hundred-billion dollar bet on the future of the Euro, with the strength of the dollar on the line. This is absolutely irresponsible, and directly contrary to market discipline. Let private banks, European or otherwise, take their own risks. Let foreign central banks inflate their own currencies and suffer the consequences. In other words, it’s time to apply market principles to banks and money.

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Ron Paul: Restore Due Process and the Rule of Law

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by Ron Paul

It is ironic but perhaps sadly appropriate that Attorney General Eric Holder would choose a law school, Northwestern University, to deliver a speech earlier this month in which he demolished what was left of the rule of law in America.

In what history likely will record as a turning point, Attorney General Holder bluntly explained that this administration believes it has the authority to use lethal force against Americans if the President determines them to be a threat to the nation. He tells us that this is not a violation of the due process requirements of our Constitution because the President himself embodies “due process” as he unilaterally determines who is to be targeted. As Holder said, “a careful and thorough executive branch review of the facts in a case amounts to ‘due process.’” That means that the administration believes it is the President himself who is to be the judge, jury, and executioner.

As George Washington University Law Professor Jonathan Turley wrote of the Holder speech:

“All the Administration has said is that they closely and faithfully follow their own guidelines — even if their decisions are not subject to judicial review. The fact that they say those guidelines are based on notions of due process is meaningless. They are not a constitutional process of review.”

It is particularly bizarre to hear the logic of the administration claiming the right to target its citizens according to some secret selection process, when we justified our attacks against Iraq and Libya because their leaders supposedly were targeting their own citizens! We also now plan a covert war against Syria for the same reason.

I should make it perfectly clear that I believe any individual who is engaging in violence against this country or its citizens should be brought to justice. But as Attorney General Holder himself points out in the same speech, our civilian courts have a very good track record of trying and convicting individuals involved with terrorism against the United States. Our civilian court system, with the guarantee of real due process, judicial review, and a fair trial, is our strength, not a weakness. It is not an impediment to be sidestepped in the push for convictions or assassinations, but rather a process that guarantees that fundamental right to be considered innocent until proven guilty in a court of law.

I am encouraged, however that there appears to be the beginning of a backlash against the administration’s authoritarian claims. Just recently I did an interview with conservative radio talk show host Laura Ingraham who expressed grave concern over using these sorts of tactics against Americans using the supposed war on terror as justification. Sadly, many conservative leaders were silent when Republican President George W. Bush laid the groundwork for this administration’s lawlessness with the PATRIOT Act, warrantless wiretapping, indefinite detention without trial, and other violations. Similarly, as Professor Turley points out, “Democrats previously demanded the ‘torture memos’ of the Bush administration that revealed poor legal analysis by Judge Jay Bybee and Professor John Yoo to justify torture. Now, however, Democrats are largely silent in the face of a president claiming the right to unilaterally kill citizens.” The misuse of and disregard for our Constitution for partisan political gain is likely one reason the American public holds Congress in such low esteem. Now the stakes are much higher. Congress and the people should finally wake up!

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Ron Paul: Audit the Fed, Before It’s Too Late!

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by Ron Paul

While the Fed has recently released an unprecedented amount of information on its activities, there is still much that remains unknown. Predictably, every push towards transparency has been fought tooth and nail. It took disclosure requirements enacted within the Dodd-Frank Act to get the Fed to provide data on its emergency lending facilities. It took lawsuits filed by Bloomberg and Fox News to provide data on discount window lending during the worst parts of the financial crisis. And it will take further concerted action on the part of Congress, the media, and the public to keep up pressure on the Fed to become and remain transparent.

Transparency is not a panacea, however, as a fully transparent organization is still capable of engaging in all sorts of mischief. Ironically, one of the Fed’s more egregious recent actions, adopting an explicit inflation target, was hailed by many as another wonderful example of transparency. Yet if you think about what this 2% inflation target actually is, you realize that it is an explicit policy to devalue the dollar and reduce its purchasing power. And it adds up quickly over time. Two percent annual price inflation means that prices rise 22% within a decade, and nearly 50% within two decades.

It is worse than that, however. This explicit 2% target also fails to take into account that whatever measure is used to determine price inflation, be it CPI, core CPI, PCE, etc., will always be chosen with an eye towards underreporting the true rate of inflation and price rises. Pressure will be exerted on those calculating the price indices, so as not to alarm the public when prices begin to accelerate.

Of course, government officials claim that price increases do not affect the average American because they can always substitute hamburger for steak, or have cereal instead of bacon to protect their family budget as prices rise. But the American people don’t overlook the fact that their quality of life has suffered because of the Federal Reserve and price inflation. What will they substitute when hamburger and cereal go sky high?

The Federal Reserve continues to keep interest rates low in the hopes of boosting lending and consumption. But keeping interest rates at zero discourages saving. Why stick money in a savings account earning 0.05% if it is guaranteed to lose at least 2% every year? The Federal Reserve created the largest debt bubble the world has ever known with these sorts of policies. The extended zero interest rate policy only eviscerates thrift and savings—the true building blocks of prosperity. Capital will continue to be depleted, infrastructure will fall into disrepair, and the United States will be a mere shadow of its former self.

It is well past time to end the failed monetary policy that encourages this mistaken preference for cheap money now, rather than real wealth in the long run. Transparency and a full audit of the Federal Reserve is a start and something we must continue to pursue. And, if those in power don’t have the stomach to bring the Fed out into full daylight, the American people deserve at least the right to conduct their economic transactions in the medium of exchange of their choosing.

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Ron Paul: No Tax Hikes! Cut Government Spending Instead

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by Ron Paul

Senator Jeff Sessions, ranking member of the Senate Budget Committee has pointed out that our per capita government debt is already larger than Greece’s. Per person, our government owes over $49,000 compared to $38,937 per Greek citizen. Our debt has just reached 101% of our Gross Domestic Product. Our creditors see this and have quietly slowed down or stopped their lending to us. As a result, the Federal Reserve has been outright monetizing debt as a way to patch things together and keep the economy on life support a little longer. There is rapidly shrinking demand for our debt, and confidence in the dollar is falling. This phenomenon is hidden only by the fact that confidence in all other fiat currencies is falling faster.

None of this seems to really alarm the administration, obviously, as they have just released a budget that accelerates spending and borrowing. The reason the debt and deficits plague the economy, according to this administration, is that the American economy is not taxed enough. Therefore, hidden in the fine print of the budget is a provision that ramps up the corporate dividends tax rate from its current 15% to 39.6%. In addition, certain deductions and exemptions will be phased out; an additional 3.8% Obamacare investment tax surcharge will be tacked on, bringing the effective dividend tax rate to 44.8% in 2013. Keep in mind, this is not just a tax on big business, this is a tax on anyone who depends on dividend income to live – retirees will be hit hard by these changes and dividend yielding stock prices will adjust downward rapidly to reflect their decreased value.

Not only this, but the Obama administration is worsening the uniquely American policy of taxing income of US based companies earned overseas. No other country presumes to tax globally in this manner, so it amounts to a huge penalty for basing a company in the US. Companies have been able to manage this penalty by deferring taxation until it is repatriated or by paying dividends. What will happen to US based businesses with strong international ties if these allowances are abolished as the Obama administration proposes? A massive wave of permanent capital flight will undoubtedly cause the already high levels of unemployment to rise.

Businesses are struggling and failing in this economy. The government ultimately depends on a healthy business climate to provide jobs and a tax base. It is penny wise and pound foolish to add to business tax burden in a misguided attempt to close the colossal gap between our government’s revenue and spending. Rather than crippling and absorbing more of our shrinking economy, government needs to be drastically cut – not in 10 years, but immediately.

Those who understand the underpinnings of the dollar and how the Federal Reserve works have known for some time that we are on an unsustainable course, that major chaos is in store if nothing is done quickly to reform things. Politicians pay lip-service to reforms that never materialize or turn out to be at best small and meaningless, or at worst actively harmful. It seems more and more inevitable that because the necessary changes would be too inconvenient for the elites to enact now, we will get them later Greek-style, through collapse and chaos.

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Ron Paul: Defend America, Not the World

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by Ron Paul

The administration recently released its 2013 budget proposal, and conservatives are correctly alarmed that it calls for unprecedented spending and continued annual deficits exceeding $1 trillion. But the same conservatives complain that the budget does not devote enough funds to overseas adventurism.

I continue to be dismayed that in spite of our economic problems, most of those who call themselves fiscal conservatives refuse to consider any reductions in military spending. Doug Bandow of the Cato Institute very aptly addresses this in his recent article for the American Conservative entitled “Attack of the Pork Hawks”. He points out that conservatives are using a tired liberal argument to defend the bloated military budget: namely, that more spending equals better results. The federal education morass is merely one example that clearly disproves this.

The facts are that the President’s budget calls for an 18% increase versus the previously planned 20% increase. This is not a cut, yet Pentagon hawks continue to issue dire warnings that this “draconian” decrease in proposed future spending will seriously threaten our national security. In truth, the majority of DOD spending goes to protect other nations, including prosperous allies like Europe and Japan and South Korea – nations that could and should take more responsibility for their own defense.

Is there any amount of money that would satisfy the hawks and the neoconservatives? Even adjusted for inflation, military spending is 17% higher now than when Obama took office. Even the worst case scenarios of Obama’s “cuts”, adjusted for inflation, still put outlays at 2007 levels, which are 40% higher than a decade ago. Our total spending on overseas adventurism and nation building equals more than the next 13 highest spending countries in the world combined. Even if we were to slash our military budget in half, we would still be the world’s dominant military power, by far.

In reality, the military industrial complex that President Eisenhower warned us about has become every bit the voracious monolith he feared. It wastes as much as any other arm of government, if not more, because it knows it can depend on unlimited blank checks from a terrified Congress.

Mr. Bandow concludes that America is more secure today than at any point since before WWII, and that military outlays should be reduced accordingly. We should, Mr. Bandow argues,

“stop garrisoning the globe, subsidizing rich friends, and reconstructing poor enemies. Instead, it’s about time Washington focused on defending American and its people.”

I couldn’t agree more. Wasting money on overseas adventurism and nation building threatens our national security by massively contributing to our debt. Both welfare and warfare spending are tipping our economy into a serious currency and debt crisis. We can afford no sacred cows in our budget. One only has to look to the violence and civil unrest in Greece and ask – is that the sort of security we envision for our nation’s future?

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