Ron Paul on President Obama's Stimulus Package

[araby]

And the Republicans he didn't name, but clearly indicated a fail by expressing disappointment. I respect this, because I tend to call it like I see it as well. Don't take it personally, but it is what it is.

http://www.cnn.com/2009/POLITICS/02/07/stimulus.paul/index.html

CAMBRIDGE, Massachusetts (CNN) -- Former presidential candidate Ron Paul criticized President Obama's economic recovery proposal but said Saturday that blame for the financial crisis is deep-seated and includes Republicans who failed to hold the line on spending during the Bush administration.


In a video, Rep. Ron Paul criticized "born-again budget conservatives."

He also offered a harsh critique of the three Republican senators who have said they will vote for the economic recovery proposal. A vote is scheduled for early next week.

Paul, a Republican representative from Texas who sought the GOP nomination for president, said that although some people call Obama's plan to jumpstart the economy a "stimulus package," he thinks it is a "pure spending package."

The message came on a video posted on YouTube.

Paul praised his fellow House Republicans for unanimously voting against the plan but expressed disappointment that three Senate Republicans "caved in and went with the Democrats."

He didn't mention the GOP senators by name but was referring to Sens. Susan Collins and Olympia Snowe, both of Maine, and Sen. Arlen Specter of Pennsylvania.


Senate to take up debate on package Monday
In the video, Paul said he wondered whether Republican opposition to the spending is too little, too late.

"It is like they're born-again budget conservatives," Paul said. "Where were we in the past eight years, when we could have done something? And you see our last eight years that has set this situation up. So we can't blame the Democrats for the conditions we have.

"We have to blame both parties and presidents of the last several decades to have generated this huge government."

Paul said that he agrees that the economy needs to be stimulated but that he doesn't think the federal government should be doing it.

"Sure, we want more spending," Paul said. "We need a lot more spending in the economy, but it has to be done by market forces, by individuals, by businesses making proper decisions."

The stimulus package, which is expected to come in at about $827 billion when the Senate votes, includes tax cuts and credits and spending on infrastructure, education and other projects that supporters say will create and save jobs.

[Evermore]

AH hell. The publitards voted thru a package that did nothing but feed the banks, the demoturds are voting thru a package that may save a few jobs but really wont do a damn thing in the long run. whats teh difference? Really?


Mindia we know your opinion already. No need to comment

[KaiineTN]

This isn't the last of the bailouts we'll see, and what's worse is that people are getting used to seeing them now, and hundreds of billions of dollars is a common figure. So what is a $50 billion dollar bailout for some specific industry is next? Oh, just $50 billion? That's nothing! Help yourself.

Why are we so dead set against letting the market correct itself? If credit is artificially too easy to get, it encourages risk taking, it encourages malinvestment, it encourages leveraging, it encourages people to get what you want today and pay for it later, it creates bubbles. And the government wants to SAVE that mentality.

Stop blaming capitalism and "greed" as the root of our problems, because that's ridiculous. That greed was encouraged by the government's intervention of interest rates! If interest rates were at where the market wants them, we sure as hell wouldn't have had nearly as much malinvestment, or as big of a bubble. Speculators would be thinned out, and the risks would be more apparent.

Why are we so dead set on keeping the prices of houses high when people can't afford to live in them without these ridiculous manipulations of interest rates and the creation of misleading mortgages that screw people over? We have too many houses. We have houses that aren't occupied, and yet we're stimulating house creation! What a wonderful idea! What? Have house prices drop? BLASPHEMY! We'll just throw more credit at people. Problem solved.

This recession, if not a depression, is the fucking cure to the mistakes the government and the Fed has made, but it seems like the government has taken on the responsibility of trying to minimize the effects of a recession through market interference.

All of these bailouts are going to cause temporary relief, but believe me, there will be another crash, and more bailouts will come in response. There will be no end to it, because nobody fucking listens. It's all the knew how to do. You can't ask a politician to do nothing in the face of what the public sees as a crisis. That's political suicide. All they know how to do is throw money at the problem (our money, which we could be using to "stimulate" the economy, guided by market forces, not politicians), which in turn just keeps making things worse.

I mean, come the fuck on, remember the first bailout? Like 90% of the public was against it? And our "representatives" gave us a big "lol stfu noob, we're government ppls we know better." Oh, let's not forget that of those who did vote for that received 54% more in campaign contributions from banks/securities firms than those who voted against it.

This latest bailout is the fucking same in principle. Who cares if it is more targeted towards helping out you or I? It is just as fundamentally wrong as the first one. It is not the proper role of government. This shit isn't about making everything fair by repeating a past mistake that was unfair.

[brinstar]

Who cares if it is more targeted towards helping out you

me


dipshit


edit: and fuck you, i won't be lectured on the "fundamental role of the government" from an e-tard paulite that doesn't even believe in jury duty, are you fucking kidding me?

[KaiineTN]

So as long as the government is doing anything that helps you, you're all for it? Well then, you can't really complain when wealthy individuals and powerful organizations feel the same way about things that help them, and when they take action to make sure they get such help.

There is no end to it. This IS the problem. The government is (and has been for a long time) doing things it has no business doing.

[brinstar]

alright then porkchop, please explain to us how the market will "correct itself" if left to its own devices

this ought to be good

[Narrock]

This porkulous package is a nightmare. There's billions of dollars in it that will not stimulate the economy one bit, but our grandchildren's children will still be paying for it. IMPEACH OBAMA NOW, before he fucks us even more.

[Arlos]

Congratulations. You can cut and paste from the Ron Paul website.

Did you even look at that study from Moody's I posted in the other thread? The one that shows that, gosh, federal funding DOES stimulate the economy, up to 5-10 times MORE than tax cuts do?

Hell, have you even read stuff from economists OUTSIDE the Ron Paul clique? Try reading, say, Krugman sometime. He is, after all, a Nobel Laureate. How about Warren Buffett? He's only regarded as perhaps the most savvy investor alive.

Unregulated Lassaisz-faire market-knows-best policy has been tried. IT DOESN'T WORK. PERIOD. First it gave us monopolies and trusts like Standard Oil, and right now, deregulation is a huge part of what got us INTO this mess. No one forced any of the financial companies to engage in trading complicated derivatives that no one understood, no one forced them to set their pay and bonus structure to encourage quarterly thinking instead of long-term planning, but perhaps if real regulation and oversight had been in place they could have been STOPPED from doing so before the damage was done.

Let the rich have their way and remove their restraints gave us the current destruction of the middle class that we're seeing. Just about never has the gap between the richest 1% and everyone else been wider.

So no, the kind of economic policy you parrot is *NOT* one we should pursue, as it helped create this disaster, and is utterly incapable of fixing it. All it accomplishes is to make the ultra-rich even richer, while the rest of us just have to hope particularly choice morsels make it into the dumpsters. Hell no. You had your chance. Time for a new policy.

-Arlos

P.S. Mindia, the chief economist of Moodies disagrees with you rather completely. I call your attention again to: http://www.economy.com/mark-zandi/docum ... 012109.pdf They did significant research, and found that exactly the kind of spending the Democrats are pushing for helps the MOST, and the tax cuts the GOP pushes for help the LEAST. And, sorry to say this, but if you try and label Moody's as some sort of liberal organization, I will be forced to a great deal of mirthful laughter, as they are nothing of the sort.

[KaiineTN]

Well, first you would need to get rid of the Fed's control over interest rates, which will naturally tighten up credit substantially and probably make things "worse" in the short term, but it will also reveal the fundamentally strong things in the economy and weed out the leftovers.

You also need to return the power to coin money and regulate the value thereof back to Congress, and out of the private hands of the Fed. Or, at the very least, audit the Federal Reserve.

If we got the government out of the business of regulating markets and money, on top of accomplishing less market interference, it would naturally be smaller and less costly to run. It would save money, which I'd be more than happy to see go towards things like infrastructure, though that should happen at the State level according to our constitution. Of course, I'd be even happier to see less taxes, or no taxes, on income anyways.

So, at that point, if the government really did have its hands off the economy, how would it correct itself? Businesses that used excessive leverage would go under. Their assets would be sold on the market to someone who could put them to more productive/profitable use, which would of course be better for the economy.

Homeowners that are in homes they can't afford would be forced to sell, likely for a significantly lower price than they bought for, and many would probably be forced into bankruptcy. Tragic? Yes, but certainly not the government's responsibility to prevent. And certainly not the end of the world, or the economy. A simple, natural correction.

The dollar would deflate as a result of increased demand as people lose trust in banks. Prices would drop. Banks with bad fundamentals would go under, and make room for new businesses to take their place.

Eventually, the market would find equilibrium. It probably wouldn't be at equilibrium until we can become solid producers of competitively priced exports again. Homes would once again be at affordable levels. Access to credit would be a reflection of the current state of the economy. Many new businesses would experience rapid growth phases. Investors and speculators would have more reliable information to base their decision making on.

Overall, America would appear "poorer," but in reality, we would simply be living more within its means and less on borrowed money. In that sense, we would have more wealth, more savings, more capital to fund growth. We would have less of a burden on future generations.

[KaiineTN]

Arlos, I didn't copy/paste anything.

The single biggest thing I'm in favor of is letting the markets decide interest rates, essentially, letting the markets determine the price of money. That alone will significantly limit bubble formation. That is something that you can't say has been tried before, not unless you look before 1913, before the Fed existed.

It's not all about deregulation and tax relief. It's about letting the market forces guide our decision making, NOT politicians and legislation.

[Arlos]

So yes, translated, you're asking to hand everything over to the rich, to make them even richer, and everyone else doomed to who knows how long a period of suffering, including homelessness and starvation. Sorry, I find that to be utterly ludicrous.

After all, if a company goes under, who but the rich can afford to buy parts of it sold off, especially if there's no credit available?

What you're asking for would create a complete and total plutocracy. Sorry, but I will oppose that tooth and nail.

What this country ACTUALLY needs is legislation and economic direction that inflates and supports the middle class, not the uber-rich. If that comes at the expense of making the uber-rich slightly less uber-rich, I have no problem with that. Neither does Warren Buffett, for that matter. Go look at some of his historical comments, he's on record as frequently saying that people of his economic class aren't taxed enough, that on a percent basis he pays less than his secretary, and he finds that ludicrous. Oddly enough, so do I.

No, no, a thousand times no, your economic model has provably failed and is destined, thankfully, to the dustbin of history, or will be once the reactionary idiots who still cling to it in the face of something called, you know, reality, finally either die off or get Clue surgically implanted.

Edit: As I said in my first post, look at the late 1800s, known as the "Guilded Age", because it gave us a tiny class of the phenominally rich, and a huge swath of "everyone else", with the middle class squeezed out. That is *WHY* modern monetary policy was created, precisely to STOP that kind of nonsense. And you want to go BACK to it? Are you insane? Then again, as Brinstar noted, I remind myself that I am arguing here on the merits of government with someone who likens Jury Duty to Orwellian-style Big Brother fascism, and I wonder why I bother.

-Arlos

[KaiineTN]

No, quite the contrary. I would expect such a correction to put quite a few of the rich into the poorhouse and create a considerable amount of new entrepreneurs. Many of the rich are every bit as leveraged as these businesses that are folding, after all.

All entrepreneurs end up having to raise capital, because quite frankly, few entrepreneurs start off wealthy. It would be much more difficult to secure capital for a new business than it has been, but it certainly would be possible, and assets would certainly be purchased and put to use when they are priced right. And I'm confident in saying that most of them would not end up being owned by the richest of the rich.

Economies can't be guided/directed efficiently by any select group of individuals, and certainly not by those who have proven themselves incompetent already. Those who first didn't see any problems, then denied their were problems, then recognized problems and blamed everything but themselves and government, and now act as though they are our economic saviors. All we should expect from them is more of the same.

I don't see why you praise Warren Buffet so much? Sure, he made a lot of money through leveraged buyouts. He stripped companies to their bare bones, laid off long time employees in favor of those who would work for less, and ran off with the profit, only to do it again and again. It doesn't take a genius to do that. He sure helps your middle class doesn't he?

You're always bringing up the uber rich and taxes they pay and all this nonsense that I don't even talk about. I don't care if the rich are taxed to all hell, personally. What I want when I say no taxes is no INCOME tax. Capital gains is a different matter entirely.

Monopolies can't exist without the help of governments. And if you're so against monopolies, why aren't you against the monopoly on money by the Federal Reserve? Would you be against, for example, a legally recognized competing currency that was backed by commodities?

[Arlos]

You also utterly overlook the impact that multiple collapsing financial institutions, especially banks, would have, especially if there was no governmental involvement.

Without the FDIC, what happens if you have money in a bank that collapses and shuts its doors? Your money just vanished. So, to prevent that, when you hear your bank is getting weak, you go withdraw all your money. Of course, then so does everyone else, and suddenly the bank IS weak, even if it wasn't before, and since NO bank, ever, keeps around the entire depository amount in its vaults, it runs out of capital and has to close, meaning everyone loses their money.

That is exactly what happened in the 20s: runs on banks crashed them, sending ripple effects through the system. People would hear their bank was weak, there'd be a run, and suddenly the rumor would be fact, regardless of whether or not it was based in fact. Millions of people had tons of savings, but lost it all because their bank vanished. The volatility was insane, and destroyed any consumer confidence at all. Yet for some reason you're arguing to go BACK to this....

Even if you agreed to keep the FDIC around, if you let every single financial institution collapse, how much money would the government be on the hook for in paying back every single depositor? Bet you anything that total amounts to MORE than it would have taken to inject liquidity back into the system to prevent the bank from failing in the first place....

I repeat: no, no, a thousand times no. Your version of economic policy *FAILED*. It will not be coming back. Ever. And we as a nation are far better off as a result.

Oh, and Income Tax is called for in the Constitution, you know. The 16th amendment. Care to call for doing away with other parts of the Constitution while you're trying to deny that one?

-Arlos

[KaiineTN]

FDIC isn't reliable at all. If one bank goes, there will be a chain reaction, and FDIC will be bankrupt in no time. I don't think FDIC insurance accomplishes much of anything other than providing you with an illusion of security.

You bring up the problem created by fractional reserve banking. Quite simply, there isn't enough money in circulation for people to have cash in hand. Banks are required to have 10% of what they loan out on hand, right? So you start with $100, deposit it in a bank, bank keeps $10, $90 gets loaned out, ends up in another bank, that bank keeps $9, loans out $81, and so on and so on. In reality, there's only $100 printed dollars you can hold in your hand, but banks multiply it many times over on paper.

That's a fact of banking and there doesn't seem to be much of a way around that besides potentially requiring banks to hold more in reserves. But it also means that money keeps being duplicated as it filters through the economy, having an inflationary effect. The same thing happens with every new bill that the Fed prints. $1 billion becomes $5+ billion by the time it gets through the banks. Fractional reserve banking really makes me uneasy... I don't know what to think about it. I think it does more harm than good in our current situation.

If it does crash and fail, we are the only ones to blame for it. What do you expect? I've heard the ratio of bills in circulation to money on record is something like 600:1. Should our government be responsible for the duplication of money by banks? Personally, I don't think so. Maybe if Congress still had the power to regulate money and didn't give it to a private organization, the Government could be held responsible. If they are held responsible, and if a full bank collapse takes place, they have no where to turn but hyperinflation. So, time to ask yourself, what's more important, sustaining a system that has exponential growth (ever seen an exponential graph?), or returning responsibility to individuals?

And we should repeal the 16th amendment. It is one of the major contributors in leading this country down the road of Imperialism and expanding the size and scope of government to ever more unconstitutional levels. There's some pretty shady history around getting it passed in the first place.

[Arlos]

Oh please tell me you aren't going to attempt to quote the Bensonian nonsense about the 16th not being properly ratified at me, are you? Or the crap about Ohio somehow not being a state in 1913 despite having been admitted in 1803? If you even go there I will laugh myself utterly silly. And as to the constitutionality of bigger government, that's your opinion. It is not universally held.

As for banks, making a profit by loaning out part of the money deposited there is a fundamental cornerstone of banking, period. Without it, what would be the point of a bank? And no, it doesn't lead to hyper-inflation. Sorry. Without banks (or some institution) loaning money, how could anyone buy an expensive durable good? (Well, except for the uber-rich, of course, the darlings of Ron Paul economic theory).

Oh and no, with the FDIC around, the banking system is FAR FAR less volatile, and banks are less likely to go tits up in the first place. If you know your money is safe regardless of whether or not your bank goes under, you have no incentive to rush to the bank at the first sign of weakness and withdraw your funds. Mass runs on banks are what turn weakness into dissolution. The very existence of the FDIC helps prevent that, and you would do away with it? I repeat: Are you insane?

So yes, I reject utterly your contention that government is inherently bad, or that government cannot be efficient. Look to Medicare's overhead vs private insurance overheads if you want a telling example. Big government, with a myriad of services designed to help the average citizen, is, in other words, government FOR THE PEOPLE, as Lincoln put it.

I repeat: Your economic policy methods have been tried and have FAILED. Deregulation and hands-off policies helped create our current mess (and other messes like the Great Depression, Trusts & Monopolies, etc.) Hopefully, they will be treated with the derision they deserve as time goes forward.

-Arlos

[Arlos]

By the way, lets put this economic crisis in context, shall we?

From the Bureau of Labor Statistics:



See that blue line? That was the 1990 recession.

See that red line? That was the post-9/11 recession. Bad one, yes?

Now look at that green line dropping off a cliff. We've already nearly lost more jobs than were lost in the previous two recessions COMBINED. Look at the slope of that curve. This isn't a decline, this is free-fall.

SOMETHING needs to be done, and done NOW. Period.

-Arlos

[Nusk]

i put forth the proposition that the current recession is actually the 2001 recession postponed because we went to war.. might dig up an old post where i even said thats what we were going to war for... to delay the recession with artificial stimulation


the obama bailout is even worse. in 3 years time when it takes a wheelbarrow of money to buy a loaf of bread because of inflation im sure you will be singing a different tune

[KaiineTN]

Okay, go spend your money, all the money you have, and you'll be doing a much better job stimulating the economy than if you handed all your money to the government for them to spend it for you. That's my point.

I never said I'd get rid of the FDIC insurance, I just said that isn't reliable and exists solely to provide an illusion of security so that people don't pull out their money as you described.

So, what do you suggest needs to be done about job loss? Let's take all the IT professioanls and have them build bridges! All you MBA middle managers? Go fill those potholes! Isn't infrastructure spending grand?

Most of the people losing jobs are skilled workers, and college educated. The government can't "create" jobs for them, nor should it ever be expected to. Stabilizing the economy is not and should not be a function of government, because an economy is dynamic and entirely unpredictable.

What, ethanol is good? Let's subsidize it using corn! Oh, wait, you can get a lot more ethanol from hemp? Oh, too bad market forces, we're already redirecting tax dollars from productive members of society to have it made from corn. I know! Let's throw tax dollars at electric cars, even though gas prices are lower than they have been in ages! Wait, if gas prices are lower, what do we need ethanol for anyways? Forget them both! Electric is cleaner, surely the productive members of society will sacrifice their earnings to make up for the extra costs. Since the market wont do it, let's make the government!

Fast forward: Ohnoez! Economy is a mess! Stupid capitalism and greedy rich people! We need more government regulations and spending. Surely people in government aren't greedy or corrupt and will fix these problems.

Politicians can't spend money wisely enough to steer the economy in a particular direction. Nobody can. In the end, there will be far more wasteful spending than productful spending, and we, as a nation, will suffer for it.

[Gypsiyee]

out of curiosity, have you any idea what's even in the bill or are you too stubborn to look past the RP website and the amount being spent? You may not like the price tag, but most of the projects in the bill are projects that are going to need to be looked at anyway - are you going to allow the free market to fix your roads and your schools?

I think you have a very idealistic and unreasonable view of what the result of purely unregulated free market is and what it can accomplish. You may be okay with small businesses collapsing and paying astronomical prices due to monopolies, but I'm not. Hell, look at the internet industry - look at the type of limited options you have and the outrageous prices and service you have to deal with. You think I choose Comcast? F no, but there aren't many other options - that's the reality of what's going to happen if you have pure dog eat dog free market - only the strongest survive (read: small business is almost never strongest) and the consumer suffers because of it.

Are you seriously daft to believe that the only jobs created from building are going to be those doing the labor? You think that when it comes to infrastructure, the only people working will be those doing the actual construction? You're so blind you can't see past your nose. Who do you think keeps those companies running? Do you also think that to make a movie all you need is actors?

No one here thinks that there aren't greedy and corrupt politicians, but if you think that it's less so in private corporations, you're a few sandwiches short of a picnic basket.

PS - *this* little tidbit of sarcasm:

Let's throw tax dollars at electric cars, even though gas prices are lower than they have been in ages!

is the exact type of thinking that keeps us dependent on foreign oil. People like you who fall for the short term solution of cheap gas prices and forget about the long term effects of being reliant on a finite source. We've had the knowledge and technology to move past it and build a more permanent solution for years, but people who think like you and who make money off the oil have stood in the way of progress because "it's cheap for now." Tax dollars going toward a future necessity? Oh no, heaven forbid. No, let's cling to what we believed in the 1800's - everything that worked back then will surely work now, too!

Honestly, it scares me to know that you're so obsessed with investing now, because you're apparently incredibly short-sighted, and that's a tragic flaw in investments.

[KaiineTN]

Interesting that you bring up the internet provider industry, because I was talking to Thott about that tonight (he used to run an ISP). Yes, they have monopolies, but why? Because telecoms were able to bribe and corrupt the system we set up for it. It is another perfect example of how a monopoly can't exist without the help of government.

To paraphrase him, we had a perfect government plan to make us the best in the world in terms of internet access, and yet we only fall behind more each year. Japan copied the system, and there you can easily get 100Mb for what we pay, or less.

The system is an ILEC/CLEC system. The idea being you have Incumbent Local Exchange Carrier (the phone company), and Competitive Local Exchange Carriers running on top of it. Each CLEC buys raw pairs from the ILEC. Prevent the phone/cable companies from offering internet at all. All they handle is setting up and maintaining the cable, everywhere, and selling usage to competing internet providers.

I think something of this nature is acceptable for the government to play a role in, but only because of how impossible it would be for a competitor to run cables everywhere without government cooperation. You'd need permission from every single landowner. Those providers who have the cables set up already did so with the help of local governments and such, so they certainly shouldn't be exclusive.

Whatever the government has done to support monopolies or make them possible either needs to be abolished, or made easily available to competitors.

[Harrison]

Don't forget about the money given to these private companies from the government to upgrade infrastructure, which never fucking happened. By all rights this entire country should be connected from their assholes to their toasters.

Your holy grail fails there too.

[brinstar]

i don't have a toaster, asshole

[Harrison]

[araby]

I read the bill. It's over 700 pages, and it's all a bunch of bullshit. Try and pull this over the American people's eyes, there will be consequences.

People are tired of this.

Ron Paul has the best idea that I've seen, so thanks Arlos, for posting some other ideas.

[Evermore]

This porkulous package is a nightmare. There's billions of dollars in it that will not stimulate the economy one bit, but our grandchildren's children will still be paying for it. IMPEACH OBAMA NOW, before he fucks us even more.

but it was ok for that cockspash of a "conservative" president to just hand 700 billion to the banks. Which btw has not done a fucking thing except increase the amount of money that moron stole.

but our grandchildren's children will still be paying for it

I think you are referring to this worthless money sink of a war. You know the one thats breaking the country's back and allowing bush and cronies to line their pockets.