A periodic blog dedicated to providing commentary and encouraging debate on topics in Economics and Finance.
Tuesday, June 5, 2007
Ron Paul for President - A better America in 2008
I'm going to opine on political issues for a moment, even though I normally detest all things related thereto. In fact, I have been so disgusted with the choices for president in the two elections in which I was eligible to vote that I abstained from voting altogether. For once, I've found a candidate worth backing.
It's worth mentioning that the key issues we should be concerned with are the ones that will directly affect us. For the vast majority of Americans, their only interaction with the Federal government is the payment of taxes. On that note, I'd like to throw my support behind Senator Ron Paul for president of the United States in 2008, who supports low taxes, limited government and limited foreign intervention. I believe that he is the one candidate running today who has the right mix of competence, integrity and economic knowledge to get us out of the quagmire that we're currently in.
While he is a candidate of the Republican party, Ron Paul doesn't quite fit the Republican mold as we have come to know it recently, which now includes wasteful government spending, huge federal budget deficits and a ballooning national debt. From a generational standpoint, Mr. Paul's policies, I believe, will give us non-boomers the best chance to enjoy at least a half-decent life compared to our elders.
Some of his key platform points are below:
Getting out of Iraq... The cost of the war is approaching $1 trillion, funded almost entirely by debt (debt that the boomers won't have to worry about too much, but the under-40 crowd will have to work paying off). Iraq has gotten plenty of help and it's time to let them sort it out for themselves. RON PAUL IS THE ONLY REPUBLICAN CANDIDATE SUPPORTING A COMPLETE PULL OUT FROM IRAQ.
We can't afford to increase our massive national debt further by spending ruinous amounts of money carrying out an interventionist foreign policy (anyone remember what happened to those guys from Italy about 1600 years ago? You know, I think they were based in Rome...)
Ron Paul has consistently voted against the Iraq war (Hillary, eat your heart out!!!).
Limited Government.. "I believe in limited government. The purpose of government is to protect liberty and not to run our lives or run the economy or police the world." - Ron Paul
Bloated tax codes with "incentives" that attempt to tell you how to spend your money, wasteful government spending on foreign wars and pork barrel politics, government subsidies and government sponsored entities such as Fannie and Freddie that distort markets, FHA (subprime lending financed by the government).... Ron Paul would work to end the wasteful bureaucracy that plagues Washington (remember, it's all paid for by you!).
Looking at the federal budget, it's abundantly clear that we could both generate a surplus and keep more of what we earn through lower taxes by simply reducing the size of government. We could probably cut out half of government expenditures and still have more government than we'd ever need.
Why we need a budget surplus: Young people (in their 20s and 30s) like me are going to have to pay down the national debt sometime, and it gets downright ugly when the bills come due and the creditors release the hounds (remember Mexico circa 1994?)... The greater the obligation becomes, the greater the drag on our economic growth.
Right now, 9% of our taxes go right out the door to pay just the interest on this debt. Of course, we'd have to pay this 9 percent - about 239 billion this year, before we even begin paying off our $9 trillion in debt. If we assume each family has, on average, 4 people, our national debt is $120,000 per family. Here's another interesting piece of information. Without interest on this debt, we'd have a balanced budget, notwithstanding the excesses of the Iraq war.
We need to be accumulating reserves to pay for social security and medicare, not piling on more debt. As it stands, with a savings rate of nearly zero and large budget deficits, we are spending a lot more than we make, and have been for some time. A wise person once told me "If your outgo is higher than your income, then your upkeep will be your downfall." Balancing the budget is a good first step toward making sure this doesn't happen.
Protecting the Value of Currency... Fairly simple... restrict the printing press at the Fed. Since 1913, when the Federal Reserve was established, the U.S. dollar has lost 95% of its value. From 1790 to 1913, prices were effectively flat (I'm quoting Peter Schiff from Europacific Capital on this). Inflation hurts prudent savers and rewards borrowers, who get to repay their debt with dollars that are worth less and less over time.
Easy money simply causes inflationary bubbles, as we've seen over the past 20 years. Ever notice how the price of anything that can't be imported has gone through the stratosphere? Healthcare, Education, Housing? I've just mentioned three of the most important things in life. While their costs have skyrocketed, the CPI has clocked in at relatively low rates. The reason... the CPI is a failure as an indicator of inflation... There are too many tweaks, the "basket of goods" that it measures is not representative of the spending needs of large portions of the American population, and other important factors (food and energy) are often excluded as undue focus is placed on the "core" number that excludes food and energy prices... which is a good indicator, I guess, if you don't need to consume food or energy.
Ron Paul's economic policies are certainly the best suited for the under 40 crowd (and I believe, the nation as a whole). If we don't get the federal budget under control and (for real) control inflation, we going to watch the value of the dollars we make erode faster than we can increase our earnings (get poorer) while we pay a much higher portion of our earnings in taxes in the future. In short, we'll all be screwed... except the baby boomers, who ran up the debt in the first place and left us holding the bill as they laugh their way to their retirement homes in Boca.
Ron Paul realizes that we're setting ourselves up for ruin, and he wants to do something about it. By all accounts, he's an honorable man (according to former treasury secretary William Simon, he's "one exception to the Gang of 535" on capitol hill), and he presents a cogent, credible platform for building a better America... Something that I believe none of the other candidates offer.
Yes... Ron Paul for president, for a better America. (Come on, are you really going to vote for Hillary? Do you really want to make it 24 years straight with a Bush or a Clinton in the White House? It's time for some new blood in the Oval Office)
BTW - It's only extra icing on the cake (I wouldn't vote just because of this), but Ron Paul, like eternitus, is a native Pittsburgh.