On Monday, Congressman Paul appeared on CNBC to respond to critics of Audit the Fed and to discuss the true causes of the economic crisis, the failure of the Fed to keep the dollar stable, and the need to know who is receiving our money.
Posted by Gary Howard on 11/23/09 Last updated 11/23/09
Continuing reports of gold reaching new record highs on practically a daily basis, is probably all the indication we need to realize that the economy is not as close to "recovery" as some would like us to think. Gold's rise is the mirror image of the dollar's drop. This is only good news to 1. Those smart enough to have stocked up on gold years ago, oh and the Wall Street types who bet on a Fed that's determined to devalue the dollar.
The New York Times:
Since the beginning of a rally in March, the weak dollar has emerged as one of the stock market's best allies. Low interest rates in the United States have led many normally risk-shy traders to jettison their reservations and turn to the stock markets in hopes of high returns.
Gold, which tends to rise as the dollar weakens, reached $1,167 an ounce, a record.
In addition to all that cheery-ness, the interest alone on U.S. debt is expected to reach $700 billion, which is an initial estimate. Following its usual mode of political calculating, the Obama administration seems to be considering another stimulus. Of course, because the last one is working so well.
The Wall Street Journal:
The jobless rate, which hit 10.2% in October, has continued to climb despite the implementation of a $787 billion stimulus package in February.
Democrats' fates in 2010 midterm elections could hinge in part on the success of their efforts to curb unemployment. Recessions historically have cost incumbents in an election year. Heavy losses could threaten Democratic majorities in the House and Senate, and affect the party's chances of passing legislation addressing President Barack Obama's priorities.
As if our nation hurdling toward bankruptcy with socialized medicine, cap and tax, and two wars and counting isn't enough to worry about. What happens when those looming debts come calling, who knows what other bad ideas will be offered for relief. Another government offered/taxpayer sponsored stimulus (aka - stolen money used for political favors) could break our econmy's back. Gloom and doom anyone? Audit the Fed.
Last year, I thought and hoped they wouldn't be able to do it. Alas, Robert Higgs writes:
Since the summer of 2008, the U.S. Treasury and the Fed have initiated a welter of new spending, lending, and subsidizing programs ostensibly aimed at steming the recession that began early in that year and deepened quickly in its last quarter and in the first quarter of 2009. Among the most notable of these programs have been attempts to prop up the real estate market and the residential construction industry, where the Fed’s easy-money policies in the first half of the present decade induced lenders to make millions of mortgage loans to home buyers who would not have qualified for such loans if traditional underwriting standards had been applied.
During the housing bubble, however, with congressional backers goading Fanny Mae, Freddie Mac, and other lenders, caution was thrown to the wind, and loans were extended to home buyers who had little more than a pulse as a qualification. People who believed that real estate prices would never fall did not worry much about the great volume of dicy credit being extended to house buyers – for the moment everybody seemed to be getting rich effortlessly with little or no risk. However, people who believed that real estate prices would never fall were fools, and when the Fed began to back away from its easy-money policy and interest rates began to rise, real estate prices began to fall, mortgage delinquencies and foreclosures began to rise, and before long the entire house of cards began to collapse: house prices dropped drastically, as did the pyramid of financial derivatives built atop the mountain of mortgage loans, and in quick succession some of the world’s largest banks and other financial-services companies went belly up. Some, including Fannie, Freddie, and AIG, were taken over by the government or the Fed; hundreds of others were bailed out, at least for the time being.
A sensible person, surveying all of this wreakage and pondering how such a debacle might be avoided in the future, certainly would have concluded that the government should cease and desist from artifically spurring the real estate market by subverting traditional underwriting standards for mortgage loans. Those standards include, for example, a substantial down payment, usually 20 percent, and well-documented sources of income sufficient to permit the buyer to service the loan, usually a steady job or substantial assets.
During the crisis since mid-2008, however, the government has not done what a sensible person would have concluded it should do. Indeed, it has done the opposite. Rather than terminating the government policies that had encouraged the foolish behavior of real estate buyers, sellers, and lenders – foolishness that lay at the heart of the artificial boom that went bust during the past two years – the government has undertaken to continue and even to compound the selfsame policies that in large part caused our present economic troubles. For example, Fannie and Freddie, now effectively government owned and operated firms, continue to extend loans as if promising borrowers were superabundant.
Moreover, the Federal Housing Administration, a government agency created in 1934 to insure conventional mortgage loans, has greatly expanded the volume of its business, and according to a recent report in the New York Times, the FHA “is underwriting loans at quadruple the rate of three years ago even as its reserves to cover defaults are dwindling.” The Mortgage Bankers Association affirmed on November 19 that “more than one in six F.H.A. borrowers was behind on payments.” The FHA has backed 37 percent of all residential mortage loans made in 2009. Reporter Patrice Hill observes that “these loans are exposing taxpayers to the same kinds of soaring default rates and losses that brought down Fannie Mae and Freddie Mac as well as destroyed many banks and the private market for mortgage loans.”
Read the rest. This is most unsettling. For what happens when the chickens come home to roost? What happens when the laws of economics reassert themselves in the form of a more dramatic, painful correction? The summer/fall of 2008 will look like a cakewalk. What goes up most come down. Throw it up higher, and it will only fall harder.
With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.
In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.
Posted by Matt Hawes on 11/21/09 Last updated 11/21/09
Saturday's night Senate vote is only the beginning of a long, complicated road Harry Reid's legislation has to travel.
The vote on cloture passed 60-39, with Republican George Voinovich not present for the vote. There's a couple points I want to make in light of today's events:
#1- It demonstrates the need to turn up the pressure on those senators who publicly state they're on the fence. The argument that you're "going to vote to start debate on a bill but you still may not vote for it in the end because you're not happy with it" is a cop-out - plain and simple.
You hold a much more considerable position of power when you prevent the bill from even being brought to the floor than you do when you allow it to be considered. If you claim to be unhappy with provisions in the bill, then you should work with leadership behind the scenes to change the bill so you can support it in good conscience.
Some senators have made headlines stating how they're going to take a bold stand by bucking the party if the party delivers something they can't agree with. Tonight demonstrates how easily those type of people cave in. Make no mistake, when you're contacting your senator, if they voted for cloture, their vote should be treated as a vote in support of this plan. Don't let them give you a bunch of bull in response about how they will block the final vote if they don't agree with it; I'm pretty sure their excuse next time will be, "Well, I'll just try to make sure these problems are fixed in committee, but this bill is too important to be stopped here." Call them on it.
To reiterate, if they want to truly take a bold stand, then they will follow through on all their threats and oppose this bill until what they disagree with is fixed. The public debate has already started. We've been debating this bill for the last week. No matter what's in the bill, you should have the courage to vote to bring it to the floor only if you actually believe in the legislation's contents.
But that requires taking a truly principled stand. That requires courage.
Help C4L turn up the attention on these swing votes by donating to our television ad campaign. We're already running ads in Nebraska urging Senator Ben Nelson's constituents to call him, and we want to expand to Arkansas and beyond.
#2 - Don't let this bother you too much while enjoying time with your family this week. As previously mentioned, this is the beginning of a long, long process in the Senate. There's still a lot of time to fight, and I have a feeling that this vote tonight will only build frustrations.
Another vote will have to be taken to even end debate and move for a final vote. Senators are coming home for the holidays soon. I think we should be there to deliver some Season's Greetings.
A cloture vote on the health care bill is coming up tonight in the Senate, where Harry Reid believes he has a filibuster-proof 60 votes.
Contact your senators and tell them to vote "No" on agreeing to start debate on this ugly piece legislation, and that it's time for Congress to address health freedom.
It's important to keep in mind that there will be plenty of chances to stop this bureaucratic nightmare from passing, but let's send an early message to Washington: enough is enough.
Israel's decision reported earlier this week to build 900 more housing units on the West Bank is Prime Minister Bibi Netanyahu's thumb in President Obama's eye. It comes a week after Obama, acting against his better judgment, met Netanyahu at the White house. Netanyahu, confident that he has the congress and the US media in his back pocket, knows that Obama can do nothing to force Israel to moderate its drive to complete the colonization of much of the West Bank. That the United States has willy nilly become an accomplice in the Israeli action is despicable and there is no conceivable American national interest that benefits from the relationship.
Obama must demonstrate leadership by beginning to shape a foreign policy that is good for the United States and its citizens. That means ending the charade of trying to bring peace to the Middle East and disengaging completely from the "wars of choice" in both Iraq and Afghanistan. The billions of dollars annually in bribes to Israel, Egypt, and Jordan in hopes of good behavior might better be spent here at home or returned to the taxpayer.
Israel's many vocal and powerful friends in the United States should recognize once and for all that Israel is not, in fact, the fifty-first state. The US should be a friend to all nations but to speak of special relationships is to diminish America's ability to do what is best for the its own people. Doing what is best for our citizens does not include massive foreign aid programs and a series of wars based on dubious assumptions. It is past time to realize that the age of American empire has been a disaster for both the US economy and for our country's standing in the world. It is time to close close the book on democracy promotion and nation building. Close the door on our overseas bases, throw away the key, and bring our soldiers home.
Posted by John Tate on 11/21/09 Last updated 11/21/09
Tonight, a cloture vote on Senator Harry Reid's 2,000-plus page complete takeover of health care is expected in the Senate.
This vote is not on final passage of the bill, but on agreeing to start debate on the legislation.
Contact your senators and tell them to vote "No" on cloture! Health care reform is a too critical of an issue to waste time debating over thousands of pages of the same type of Washington interference that has wrecked our current system.
There will be more votes and more chances to stop Reid's bureaucratic nightmare from passing, but a rejection of cloture tonight would send a strong signal to President Obama and congressional leadership that we will continue to fight their efforts to address our country's problems with "more of the same."
We recently launched OperationHealthFreedom.com to bring a liberty-centered approach to the health care reform debate by supporting tax credits and deductions as proposed in Ron Paul's H.R. 1495, pushing Ron Paul's H.R. 2629 to prevent government from forcing us to buy health insurance and sending the IRS after us if we don't, and advocating allowing Americans to purchase health insurance across state lines, as provided for in Congressman John Shadegg's H.R. 3217.
As part of this effort, we have released a series of videos featuring Tom Woods, Judge Andrew Napolitano, Rand Paul, Peter Schiff, and Daniel Hannan discussing health freedom and what true reform would look like.
Today, we're proud to release the final installment in this series: Dr. Ron Paul.
In this final video, Congressman Paul talks about the need for less government in health care and mentions reforming the tax code to give us back more of our hard-earned dollars so we can pursue a much wider variety of health care options.
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—Thomas Jefferson
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