GOVERNMENT DEBT - THE
GREATEST THREAT TO NATIONAL SECURITY
November 27, 2004
1:10 AM Eastern
Congressman Ron Paul [R-TX] isn't just a member of the House of Representatives. He's also an obstetrics/gynecology MD and has delivered more than 4,000 babies. Dr. Paul is an expert on gold and the monetary system and has written several books, Challenge to Liberty; The Case for Gold and A Republic, If You Can Keep It.
Last week Congress voted to raise the national debt ceiling to $8.8 trillion dollars because there was no more money to run the government. (search) Last month, Congressman Paul tried to warn the American people about another hike in the debt ceiling, "...once again Congress is poised to authorize an increase in government borrowing. Between its ever-growing bureaucracies, expanding entitlements, and overseas military entanglements, the federal government is borrowing roughly one billion dollars every day to pay its bills."
As there is no money in the U.S. Treasury and since not one penny of income tax paid to the IRS funds a single function of the federal government, all expenditures must be borrowed from the privately owned federal reserve, something Paul has exposed in the past:
"Strictly speaking, it probably is not necessary for the federal government to tax anyone directly; it could simply print the money it needs. However, that would be too bold a stroke, for it would then be obvious to all what kind of counterfeiting operation the government is running. The present system combining taxation and inflation is akin to watering the milk: too much water and the people catch on."
Congressman Paul also doesn't have many good things to say about the spending of his colleagues in Congress, "Government debt carries absolutely no stigma for politicians in Washington. The original idea behind the debt limit law was to shine a light on government spending, by forcing lawmakers to vote publicly for debt increases. Over time, however, the increases have become so commonplace that the media scarcely reports them � and there are no political consequences for those who vote for more red ink. It�s far more risky for politicians to vote against special interest spending.
"Even supposed single-year surpluses never existed, but were merely an accounting trick based on stealing IOUs from the imaginary Social Security trust fund. Remember that the total federal debt continued to rise rapidly even during the claimed surplus years. Since Congress is incapable of spending only what the Treasury takes in, it must borrow money. Unlike ordinary debts, however, government debts are not repaid by those who spend the money � they�re repaid by you and future generations."
One of the methods the federal government uses while robbing Peter to pay Paul is done through what monetary experts warn will eventually cause a complete collapse of our economy is the reliance on foreign debt. "The federal government issues U.S. Treasury bonds to finance its deficit spending. The largest holders of those Treasury notes � our largest creditors � are foreign governments and foreign individuals. Asian central banks and investors in particular, especially China, have been happy to buy U.S. dollars over the past decade. But foreign governments will not prop up our spending habits forever. Already, Asian central banks are favoring Euro-denominated assets over U.S. dollars, reflecting their belief that the American economy is headed for trouble. It�s akin to a credit-card company cutting off a borrower who has exceeded his credit limit one too many times," said Congressman Paul in one of his recent warnings.
He further warned that America's debt is a serious threat to America's security, "Debt destroys U.S. sovereignty, because the American economy now depends on the actions of foreign governments. While we brag about our role as world superpower in international affairs, we are in truth the world�s greatest debtor. Like all debtors, we are not truly free. China and other foreign government creditors could in essence wage economic war against us simply by dumping their huge holdings of U.S. dollars, driving the value of those dollars sharply downward and severely damaging our economy."
Another economist from the American Enterprise Institute, Desmond Lachman, has sounded the warning about foreign central banks and their effect on the American economy, "Now have considerable ability to disrupt U.S. financial markets by simply deciding to refrain from buying further U.S. government paper.� Lawrence Summers, former vice president of development economics and chief economist of the World Bank and former Treasury Secretary under Bill Clinton, has also weighed in on this issue, "A kind of global balance of financial terror,� noting our dependency on �the discretionary acts of what are inevitably political entities in other countries.�
In his recent editorial, Congressman Paul finished up his attempt to explain how dire the situation is by saying, "Ultimately, debt is slavery. Every dollar the federal government borrows makes us less secure as a nation, by making America beholden to interests outside our borders. So when you hear a politician saying America will do �whatever it takes� to fight terrorism or rebuild Iraq or end poverty or provide health care for all, what they really mean is they are willing to sink America even deeper into debt. We�re told that foreign wars and expanded entitlements will somehow make America more secure, but insolvency is hardly the foundation for security. Only when we stop trying to remake the world in our image, and reject the entitlement state at home, will we begin to create a more secure America that is not a financial slave to foreign creditors."
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Between its ever-growing bureaucracies, expanding entitlements, and overseas military entanglements, the federal government is borrowing roughly one billion dollars every day to pay its bills.