Paul is the only presidential candidate proposing policies that address the country’s fundamental economic problems --- a vote for Ron Paul is a vote for America and our citizens
On Nov 4, 11:14 am, MJ <[email protected]> wrote: > "Now, readers can be forgiven for not being familiar with the depression of > 1946, because there actually wasn’t one. But many Keynesian economists were > predicting in 1945 the onset of economic depression as a consequence of > peacetime demobilization. However, the exact opposite occurred, because the > end of the war brought an enormous peace dividend in the form of a two-thirds > reduction in government spending as well as the removal of most of the > wartime economic regulations."Ron Paul’s De-Stimulus Planby Tim Kelly, > November 4, 2011 > Congressman Ron Paul has put forth an economic plan that calls for serious > cuts in the size, budget, and power of the federal government. He has also > proposed policies that would end the Fed-driven inflation responsible for the > global economic meltdown. This is truly a de-stimulus plan. > Paul’s plan would immediately cut $1 trillion from the federal budget by > closing down five cabinet departments, slashing regulations, and withdrawing > troops from overseas. During a Paul presidency, the U.S. government would > cease being the world’s policeman, and the empire would be liquidated in the > interests of the both the economy and the Constitution. > Such a radical and necessary shift in foreign policy would be difficult for > those Americans dependent on the war economy and accustomed to seeing their > government as a colossus bestriding the world. But now is the time for > Americans to face reality and admit that our country’s exalted global > position has been a corrupting experience, and it is simply no longer > affordable. > Such a sharp reduction in the federal budget, coupled with much tighter > monetary policy would stop the flow of so-called stimulus spending from the > economy. This would be the beginning of a painful readjustment period, as > people necessarily reduced their consumption, and the economy liquidated > years of inflation and debt-financed malinvestment. Unemployment would likely > go up in the short term as zombie firms deprived of their periodic fix of > easy money went bankrupt, and government payrolls were thinned. > But it would also be the beginning of genuine economic recovery, because the > private sector, relieved of the burdens of a metastasized state, would begin > to accumulate real capital and invest in viable enterprises. Real jobs, not > government jobs, would be created, and Americans would soon find themselves > earning more, because their currency, no longer devalued by the Fed’s > printing presses, would actually gain purchasing power. > No doubt Keynesians would still be out there preaching the necessity of > countercyclical fiscal and monetary policies and warning of the dire > consequences of deflation. There would also be no shortage of hack > politicians and rent-seeking special-interest groups willing to spread the > Keynesian message of more government spending. And it would be naïve to > expect the financial elite to sit quietly as their privileges were taken > away. A few select firms on Wall Street reap enormous profits from the bond > market, and under the current system they are free to engage in essentially > risk-free speculation due to their “too-big-to-fail” status. > Paul has defended his de-stimulus program to inquisitors by correctly > pointing out that similar “austerity measures” have been very successful in > the past in spurring economic recovery and therefore should be used as > roadmaps for recovery today. During a recent appearance on NBC’sMeet the > Press, Paul tutored host David Gregory on “the depression of 1946.” > Now, readers can be forgiven for not being familiar with the depression of > 1946, because there actually wasn’t one. But many Keynesian economists were > predicting in 1945 the onset of economic depression as a consequence of > peacetime demobilization. However, the exact opposite occurred, because the > end of the war brought an enormous peace dividend in the form of a two-thirds > reduction in government spending as well as the removal of most of the > wartime economic regulations. > Jason E. Taylor and Richard K. Vedder explain in greater detail in their > article“Stimulus by Spending Cuts: Lessons from 1946”:Historically minded > readers may be saying, &147;There was a Depression in 1946? I never heard > about that.” You never heard of it because it never happened. However, the > &147;Depression of 1946” may be one of the most widely predicted events that > never happened in American history. As the war was winding down, leading > Keynesian economists of the day argued, as Alvin Hansen did, that &147;the > government cannot just disband the Army, close down munitions factories, stop > building ships, and remove all economic controls.” After all, the belief was > that the only thing that finally ended the Great Depression of the 1930s was > the dramatic increase in government involvement in the economy. In fact, > Hansen's advice went unheeded. Government canceled war contracts, and its > spending fell from $84 billion in 1945 to under $30 billion in 1946. By 1947, > the government was paying back its massive wartime debts by running a budget > surplus of close to 6 percent of GDP. The military released around 10 million > Americans back into civilian life. Most economic controls were lifted, and > all were gone less than a year after V-J Day. In short, the economy underwent > what the historian Jack Stokes Ballard refers to as the &147;shock of peace.” > From the economy's perspective, it was the &147;shock of de-stimulus.”Another > historical precedent Paul can point to is the depression of 1920. Very few > people have heard of this “economic crisis.” This is most likely due to its > short duration and the fact that Warren G. Harding, a president not held in > high esteem by mainstream historians, was able to reverse it with > laissez-faire policies that are anathema to Keynesian orthodoxy. > Historian Thomas E. Woods Jr. provides this synopsis of Harding’s successful > de-stimulus program:The economic situation in 1920 was grim. By that year > unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined > 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover > falsely characterized as a supporter of laissez-faire economics urged > President Harding to consider an array of interventions to turn the economy > around. Hoover was ignored.Instead of “fiscal stimulus,” Harding cut the > government's budget nearly in half between 1920 and 1922. The rest of > Harding's approach was equally laissez-faire. Tax rates were slashed for all > income groups. The national debt was reduced by one-third. The Federal > Reserve's activity, moreover, was hardly noticeable. As one economic > historian puts it, “Despite the severity of the contraction, the Fed did not > move to use its powers to turn the money supply around and fight the > contraction.” By the late summer of 1921, signs of recovery were already > visible. The following year, unemployment was back down to 6.7 percent and it > was only 2.4 percent by 1923.Paul’s de-stimulus plan has been given the cold > shoulder in Washington, DC, but that’s to be expected. After all, politicians > are in the business of dividing plunder, and proposing to take an axe to the > federal budget is no way to win friends and influence people inside the > Beltway. But most Americans are now skeptical of stimulus programs, because > the plans have clearly failed to reverse the country’s economic downturn. > Indeed, more people are coming to realize that the orgy in government > spending since 2008 has only accelerated the decline. Moreover, there is > serious concern regarding the federal government’s unprecedented budget > deficits and their potential for sparking hyperinflation. > Perhaps enough voters will come to realize that Paul is the only presidential > candidate proposing policies that address the country’s fundamental economic > problems, and perhaps they will reward him appropriately for his insight and > statesmanship.http://www.fff.org/comment/com1111c.asp -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
