Although I am very optimistic about America’s future outlook if Ron Paul is elected president in 2012 as the Republican candidate, I’m going to begin this article with a very pessimistic piece of data. The U.S. Government Accountability Office issued in April 2007 a report titled “The Nation’s Long-Term Fiscal Outlook” and the data shows that by 2040, nearly every dollar the government collects in taxes will be needed for Social Security, Medicare, and paying interest on the national debt. That info of course predates the massive increase in the national debt since then under both the presidencies of George W. Bush and Barrack Obama as well as updated information on entitlements. In a May 2011 broadcast of the CBS Evening News, Katie Couric reported “a government report out today says Social Security will run out of money in 2036, a year earlier than had been estimated. And Medicare – its trust fund will be empty by 2024, 5 years ahead of the last estimate.”

In short, debt is America’s ticking time bomb set to explode and the clock keeps running down faster and faster. Worse yet, it is a bomb that was constructed by and hand-delivered into the heart of America by the very politicians who are supposed to represent this great country. The one exception is Dr. Ron Paul, who won his first election in 1976 in Texas and became a member of the U.S. House of Representatives. Ron Paul has never voted for an unbalanced budget, has never voted to increase the national debt ceiling, has never voted to raise congressional pay, does not participate in the lucrative congressional pension program, and returns a portion of his annual congressional budget to the U.S. Treasury every year.

The Military Budget, Foreign Policy, and the Economy

Budget busting military spending is a tremendous problem that Ron Paul takes very seriously. On foreign affairs, Ron Paul believes strongly in the Constitution and the Founding Fathers and praises Thomas Jefferson’s inaugural address that called for “peace, commerce, and honest friendship with all nations, entangling alliances with none.” Paul believes that the military should be used strictly for defensive and retaliatory purposes and not for pre-emptive strikes. This ideology is reflected in his voting record. When America was attacked on September 11 by Osama bin Laden’s al Qaeda cohorts, Paul voted in favor of using military force to go after the terrorists and Paul even authored H.R. 3076, the September 11 Marque and Reprisal Act of 2001, which authorized “the capture, dead or alive, of Osama bin Laden or any other al Qaeda conspirator responsible for the act of air piracy upon the United States on September 11, 2001.” On the other hand, Ron Paul opposed the war in Iraq on the grounds that Iraq posed no serious threat to America. In His best selling 2008 book The Revolution – A Manifesto, Paul wrote that there was no sufficient evidence that Iraq had WMDs, which has been proven correct, and that Iraq was an extremely weak enemy that he called “an impoverished Third World nation that lacked an air force, antiaircraft weapons, and a navy”.

Paul also noted in his book the burdening cost that the Iraq War would have on the American people. He wrote:

In early 2006, Harvard’s Linda Bilmes and Columbia’s Joseph Stiglitz estimated the long-term costs of the war, including care for our maimed soldiers, at $2 trillion. By the end of the year they were saying that the $2 trillion figure was too low. It isn’t just the Iraq war that busts the budget – it’s our overseas military presence as a whole. We have reached a point at which it now costs $1 trillion per year to maintain. One trillion dollars. The proposed Pentagon Budget alone was $623 billion for 2008. “What’s remarkable about this year’s military budget,” wrote one military analyst, “is that it’s the largest budget since World War II, but, of course, we’re not fighting World War II.

In American politics, we often hear Republicans complaining about how the Democrats foolishly believe that their reckless spending for domestic programs will not bankrupt the nation. But somehow there are all too many Republicans who believe that there is an endless supply of money that can be used for war, saber rattling, and nation building. In truth, both parties have reckless ideologies when it comes to spending and Ron Paul is not afraid to go against the establishment. Paul plans to cut back America’s swelling deficit by ending the war in Afghanistan, completely ending the war in Iraq, and closing down military bases around the world and bringing home those foreign-stationed troops.

And while some are tempted to say that such actions are too “liberal”, there is surprising support from the conservative side of the spectrum for Paul’s positions. Public Radio International aired an August 2011 segment titled “Trimming the Defense Budget, Tea Party Style” and although Ron Paul’s name is never mentioned, based on the interviewees’ statements it’s tempting to say that every one of them would feel comfortable with Ron Paul’s proposals. Chris Littleton of the Ohio Liberty Council stated that America’s foreign policy has lost sight of its Constitutional mission:

“It does not include being the world’s police, being the world’s peacemaker, or trying to advance our culture or causes around the world as a singular purpose. It’s for common defense,” said Littleton. “And so if we are not directly threatened, and we are not involved in an altercation, that we need to defend ourselves (from), then we can absolutely scale back our operations from throughout the world. So I’d be for both domestic and foreign military installations brought back, trimmed down, and hopefully many of them even eliminated.”

Tea Party supporter Jason Rink stated:

“Traditional conservatives, they believed we should have a humble foreign policy, they believed that we shouldn’t police the world, they believed that we shouldn’t get into foreign wars, and that our defense spending needed to be something that we addressed and we were modest about,”

Even Sarah Palin, who isn’t exactly perfectly aligned with Ron Paul’s vision of foreign policy, has made recent statements on foreign policy that Ron Paul supporters would be comfortable with. In a speech made at Colorado Christian University in May 2011, Politico reported:

First, Palin said, “we should only commit our forces when clear and vital American interests are at stake. Period.” That point led to her second, dismissing nation-building as a “nice idea in theory,” but not the “main purpose” guiding American foreign policy. Palin continued down that track by insisting that a president must be able to articulate “clearly defined objectives” before foreign interventions – a standard she has recently said Obama failed to live up to in Libya. As her fourth point, Palin declared that “American soldiers must never be put under foreign command.”

Is there a shift in the winds about America’s foreign policy and the debt it entails? It would seem so. A March 2010 Zogby poll revealed:

More than twice as many U.S. adults (58%) say that debt owed to China is a more serious threat to the long-term security and well-being of the U.S than is terrorism from radical Islamic terrorists (27%). Interestingly there was little variation by party identification with a majority of Democrats, Republicans and independents all agreeing that the debt owed by the United States to China poses the greater threat.

In an article titled “Ron Paul: You Want Him”, NorthwestMilitary.com reported that Paul, who served as a flight surgeon in the Air Force and the Air National Guard, raised more money for campaign donations from active duty military personal than any other candidate in his 2008 presidential run and that he repeated the same feat in 2011. Quoting campaign manager Jesse Benton: “Our fighting men and women take an oath to protect America, defend our Constitution and defend our borders. They look at Ron Paul and see a leader who takes their oath seriously, and who will fight to ensure that we don’t misrepresent that oath by sending them off to police the world, instead of defending our country“.

And despite the government propaganda, spending money on war does not stimulate the economy, it only makes the GDP look more impressive because government spending is a component of GDP. If war spending was so beneficial, perhaps we could just build a fleet of aircrafts, sink them directly to the bottom of the sea, and repeat the whole process over and over again until the economy improves. If that idea doesn’t make a lot of sense, then you understand perfectly how Washington works. Washington’s central planning to stimulate the economy inevitably fails, and then the politicians from D.C. (the District of Criminals) plea for more power so that they can spend more borrowed money so that it appears that they are “doing something”. As Ron Paul’s old friend Harry Browne used to say, “Government is good at one thing: It knows how to break your legs, hand you a crutch, and say, ‘See, if it weren’t for the government, you wouldn’t be able to walk’.” If you want to get the economy rolling again, capital needs to be available to the private sector instead of being needlessly wasted on war. The surest path to big government is war, and the surest path to more war is big government.

Budget Balancing Through Domestic Spending Cuts

For his 2012 campaign platform, Ron Paul introduced his “Plan to Restore America” which calls for abolishing five cabinet departments: Education, Housing & Urban Development, Commerce, Interior, Energy. The Transportation Security Administration is also abolished, and along with other cuts such as a 10% reduction to the federal workforce, Ron Paul plans to reduce the deficit by $1 trillion his first year in office and balance the budget in year three. There are mild changes to Social Security and Medicare. The Paul plan “Honors our promise to our seniors and veterans, while allowing young workers to opt out. Block grants Medicaid and other welfare programs to allow States the flexibility and ingenuity they need to solve their own unique problems without harming those currently relying on the programs.”

Why focus so much on balancing the budget when entitlements are also going to be a big problem in the near future? The Washington establishment is going to attack Ron Paul from every angle just for trying to balance the budget with his proposed cuts. “Ron Paul doesn’t care about education!” is the cry you’ll hear, as if the Department of Education was some vital component of government that we somehow managed to live without from 1776 to 1980, a period in which Americans must have been swinging through the vines of trees looking for breakfast when they weren’t clubbing potential mates over the head and dragging them back their caves, hair clenched in fist. Yet when Alexis de Tocqueville visited America in the 1830s, he was impressed that America’s literacy rate was about 90 to 95 percent, higher than any other country at the time (Tocqueville’s France was about 5%). Perhaps Americans were able to educate themselves without a Department of Education and perhaps Americans were capable of reading and writing more than just what was carved inside a cave. The bottom line is that the Washington establishment will be breathing down fire at Ron Paul just for trying to balance the budget, and perhaps Ron Paul is wise in trying not to slay too many dragons at once by leaving open the challenge of massive entitlement reform. One thing is for sure – no one can legitimately claim that Ron Paul is going to dump grandma off the cliff.

Diffusing the Fed’s Inflation Bomb

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it. – Frédéric Bastiat – The Law. 1850

If the debt bomb is one financial weapon of mass destruction that will destroy America if not resolved by balancing the budget, inflation is the other. The difference is that there is a timer on the debt bomb but the inflation bomb is more of a wild card that can go off at any second. What causes inflation? An increase in the money supply. Who increases the money supply? The Federal Reserve. Who needs the Federal Reserve? Nobody, except the banks that expect to get bailed out when they make risky decisions that devastate the economy. This is exactly the reason Ron Paul wants to abolish the Federal Reserve.

Too often establishment figures in the media say that abolishing the Fed, which wasn’t even signed into existence until 1913, is a “crazy” idea. What you won’t often hear is whose crazy idea it was to create the Federal Reserve in the first place. In “Paul Warburg’s Crusade to Establish a Central Bank in the United States”, available on the Minneapolis Fed’s website, author Michael A. Whitehouse writes:

“One evening in early November 1910, Warburg and a small party of men from New York quietly boarded Sen. Aldrich’s private railway car, ostensibly for a trip south to an exclusive hunting club on an island off the coast of Georgia. In addition to Warburg and Aldrich, the others, all highly regarded in the New York banking community, were: Frank Vanderlip, president of National City Bank; Harry P. Davison, a J.P. Morgan partner; Benjamin Strong, vice president of Banker’s Trust Co.; and A. Piatt Andrew, former secretary of the National Monetary Commission and now assistant secretary of the Treasury. The real purpose of this historic “duck hunt” was to formulate a plan for US banking and currency reform that Aldrich could present to Congress.”

Paul Warburg was a partner in Kuhn Loeb & Company and a representative of the Rothschild European banking dynasty. His brother was Max Warburg, head of the Warburg banking consortium in Germany and the Netherlands. Senator Nelson Aldrich, who was considered one of the most powerful men in Washington D.C., was a Republican “whip” in the Senate as well as a business associate of J.P. Morgan, and father-in-law to John D. Rockefeller, Jr. According to Jekyll Island Museum historian Tyler E. Bagwell, this group was also accompanied by Charles D. Norton, president of J.P. Morgan’s First National Bank of New York.

The important thing to take notice here is that this group represented an enormous concentration of wealth. Author G. Edward Griffin writes:

An article appeared in the New York Times on May 3, 1931, commenting of the death of George Baker, one of Morgan’s closest associates. It said: “One-sixth of the total wealth of the world was represented by members of the Jekyll Island Club”. The reference was only to those in the Morgan Group (members of the Jekyll Island Club). It did not include the Rockefeller group or the European financiers. When all of these are combined, the previous estimate that one-fourth of the world’s wealth was represented by these groups is probably conservative”

Now if a group of the world’s most powerful oil tycoons gathered in secret to write legislation to be presented to Congress, you can be sure that this legislation would be used for the benefit of the oil industry. If a group representing the biggest tobacco companies gathered in secret to write legislation, you can bet it would be used to benefit the big tobacco companies. If a group of bankers representing one-fourth of the world’s wealth gathered in secret to create a bill, it doesn’t take a genius to figure out that the bill would benefit the big bankers. And indeed it did. In a July 1914 issue of The Independent, Nelson Aldrich stated “Before the passage of this Act, the New York bankers could only dominate the reserves of New York. Now we were able to dominate the bank reserves of the entire country”. What the Federal Reserve Act allowed was for banks to create money out of thin air, earn interest on it, and get bailed out when overextended. Or at least the big, powerful, connected banks get the bailouts. They are deemed “too big to fail” while the smaller banks are deemed “too small to rescue” and are often consolidated by the big banks. This system allows for the price to be paid for by the public in the form of inflation – inflation caused by creating money out of thin air by the banking system and inflation caused by money created out of thin air by the Federal Reserve System to bail out the banks. If the Fed was created by, for, and of the banks, you shouldn’t be too surprised that the banks are still running the Fed today. In his outstanding May 2009 article for Slate entitled “Fed Dread”, former New York Attorney General and former Governor Eliot Spitzer described how the New York Federal Reserve Board is composed of members chosen by the private banks as well as members chosen as public representatives. Spitzer writes:

So whom have the banks chosen to be the public representatives on the board during the past decade, as the crisis developed and unfolded? Dick Fuld, the former chairman of Lehman; Jeff Immelt, the chairman of GE; Gene McGrath, the chairman of Con Edison; Ronay Menschel, the chairwoman of Phipps Houses and also, not insignificantly, the wife of Richard Menschel, a former senior partner at Goldman. Whom did the Board of Governors choose as its public representatives? Steve Friedman, the former chairman of Goldman; Pete Peterson; Jerry Speyer, CEO of real estate giant Tishman Speyer; and Jerry Levin, the former chairman of Time Warner. These were the people who were supposedly representing our interests!

If the Federal Reserve corruption and the Wall Street bailouts weren’t enough to boil your blood, consider the national security side of the issue. The Fed basically acts as the federal government’s credit card, paying the bills for unsustainable military and domestic spending. If America stays on the path of unsustainability, elements beyond the U.S. government’s control could cause that credit card to get cut up and the currency that pays the credit card bills to become worthless, leading to a hyperinflationary collapse. Gregory Zerzan was Deputy Assistant Secretary and Acting Assistant Secretary of the Treasury in the administration of President George W. Bush. In his October 2009 article entitled “Dollar is a National Security Issue”, he wrote:

The ability to cripple the U.S. economy by massively devaluing the dollar is the type of “asymmetric warfare” that the People’s Liberation Army has discussed openly in recent years. This is not to suggest that the People’s Republic wants to destroy the dollar, nor that doing so would come without cost. But such power would clearly give China tremendous leverage.

Dr. Jerome Corsi reported on a 2010 Joint Operating Environment report released by the United States Joint Forces Command concerning America’s debt:

With regard to national-defense implications of the deteriorating U.S. economic position, the JOE 2010 worried that should China demand higher interest rates as an inducement to continuing to buy the U.S. Treasury debt needed to finance continuing trillion-dollar U.S. federal budget deficits, the U.S. could suffer a “hard landing” that could increase the perception the U.S. no longer controls its financial future. Noting President Obama’s warning that the U.S. economy will add $9 trillion debt over the next decade, the JOE 2010 warned the result could be “a decreased ability of the United States to allocate dollars to defense.”

Humor writer P.J. O’Rourke once stated that giving money and power to government is like giving whiskey and car keys to teenage boys. I would add credit cards to that list. Since the Fed essentially acts as a credit card and the government just can’t help itself, the only solution is to abolish the Federal Reserve. Liberals should cheer for the end of Wall Street favoritism and bailouts. Conservatives should cheer for a stable national security outlook. Libertarians should cheer for the free market to determine the price of borrowing money instead of a quasi-government agency headed by a Soviet style commissar. All Americans should cheer for an end to inflation. Thomas Sowell, a very well known economist who is highly praised by conservatives, libertarians and independents, even said on Fox Business Network’s Freedom Watch with Judge Napolitano in January 2011 that “judged by its track record, there’s really no argument for continuing the Federal Reserve System.” Sowell’s agreement that the Fed should be abolished should for many put to rest the idea that ending the Fed is “crazy”.

2012: No One But Paul

In 2008, Americans were hoping for change but got more of the same. Barrack Obama brought to the table the same aggressive and bankrupting foreign policy of George W. Bush. He significantly increased the number of troops in Afghanistan and continued the Bush failed nation building policy, and all the while Afghan president Hamid Karzai was proclaiming “If I had to choose sides today, I’d choose the Taliban,” over the United States. Obama further launched air strikes in Libya with no Congressional authorization and sent 100 U.S. troops to Uganda on his own authority. He even wanted to keep troops in Iraq past the withdrawal deadline set by George W. Bush but the Iraqi government resisted during negotiations.

On the finance side, Obama supported the bank bailouts just like George W. Bush. Obama named Tim Geithner, who was president of the New York Federal Reserve during the Bush years and during the 2008 financial collapse, as Secretary of Treasury. Geithner hired Goldman Sachs lobbyist Mark Patterson as his chief of staff. Obama’s Deputy Secretary of State Jacob Lew was the CFO of Citi Group until 2008, and Michael Froman was another CFO of Citi who became assistant to President Obama and Deputy National Security Advisor for International Economic Affairs. Obama chose the same failed Federal Reserve Chairman, Ben Bernanke, that Bush appointed. Search Youtube for “Ben Bernanke Was Wrong” if you have 5 minutes of free time. For those who believe that insufficient regulation was a problem that lead to the financial crisis, note that Bernanke then picked Patrick Parkinson to be in charge of regulation and supervision at the Federal Reserve. According to Prof. William K. Black of University of Missouri–Kansas City, “Patrick Parkenson was the person Alan Greenspan used to lead the charge against Brooksley Born in 2000 and 1999 when she wanted to regulate credit default swaps- which is what blew up AIG and is where we bailed out Goldman Sachs.” The economy is still in the tank and Obama continues to rack up massive deficits George W. Bush style.

Ron Paul’s top Republican opponents in the 2012 race seem to be Mitt Romney and Newt Gingrich. Both men supported the bailouts, both men want to spill more American blood and treasure in futile foreign misadventures, both men have no serious plan to balance the budget in 4 years, and both men are serial flip-floppers who are suddenly appalled by Obamacare even though one enacted state run healthcare as governor and the other supported George W. Bush’s Medicare D drug entitlement program which former U.S. Comptroller General David Walker called “the most fiscally irresponsible piece of legislation since the 1960s.” In the anti-establishment atmosphere of the Tea Party, if Newt Romney becomes the Republican nominee after stimulus supporter (just so long as it wasn’t Obama’s stimulus) John McCain, after 2-term neocon budget busting bailout boy George W. Bush, after Mr. Moderate Bob Dole (who urged passing of Obama’s health care reform bill in 2009 by the way), and after “No new taxes” George H.W. Bush, then Republicans truly are a lost cause. The Who could rewrite a few lyrics and release “Will Get Fooled Again” that people could play back while laughing and pointing at the GOP. It could be the bestselling single of 2012.

In the anti-establishment atmosphere of Occupy Wall Street, the same goes for Democrats and voters in general if it comes down to Ron Paul vs. Obama and Obama wins. And despite what the Republican establishment would have you believe, Ron Paul is very much electable and stands a good chance against Obama. In April 2010, Rasmussen released a poll saying it would be virtually dead even if it came down to Paul (41%) vs. Obama (42%). This of course was before the surge Paul is currently experiencing in Iowa as of December 2011, where many consider him a strong candidate to win the Iowa primary. For comparison’s sake, Rasmussen’s Dec. 2011 poll showed it would also be virtually dead even between Romney (43%) and Obama (42%). However, Ron Paul performs the best of the Republicans against Obama among independents according to recent polls by Public Policy Polling.

No one but Paul is afraid of bucking the system with a serious proposal to balance the budget. No one but Paul has any credibility when it comes to opposing banker bailouts and hacking at the root of the problem – the Federal Reserve. No one but Paul takes seriously the twin financial weapons of mass destruction: debt and inflation.

Think about what life would be like should the debt time bomb finally go off. Think back to that 2007 GAO report: by 2040, nearly every dollar the government collects in taxes will be needed for Social Security, Medicare, and paying interest on the national debt. Not a penny will be used to pay down the debt, only paying off the interest on the debt. Not a penny will be left for even the most basic function of government – defense. We will all be defenseless tax slaves living in a black hole of debt in a nation that is no longer worth defending. Passing the debt onto those too young to vote or not yet born is taxation without representation, the very thing America rebelled against in 1776.

Think about what life would be like if the inflation bomb goes off. The cost of borrowing money skyrockets, businesses are afraid to make any long term deals when the value of the currency is uncertain, fuel becomes too expensive for anyone or anything to move around, savings get wiped out, and the economy grinds to an even bigger halt. People will panic and clamor for the government to “do something” and the people in charge at the government will be the very people who got us into the problem in the first place. They will offer band-aid solutions at best, and tyrannical solutions at worst, especially if it’s not just high inflation but hyperinflation.

Despite the rhetoric that you’re likely to hear from the establishment, Ron Paul will not bring anarchy to America. His proposals will take us back to 2006 levels of spending. Government will still be too big in my opinion. Dr. Paul won’t be able to achieve the libertarian utopia he and I would like to live in. What he can do is stop the bleeding and offer his informed medical opinion on how to best treat the wound. When Americans find that the sky isn’t falling despite the “radical” steps Paul will take, perhaps then we can take a long, hard look at ourselves and decide that stopping the bleeding was a good first step, and starting the process of healing is a good second one.