Last week I briefly mentioned in passing in my article on unity how the CATO institute demonstrated that Representative Paul Ryan’s budget proposal doesn’t limit government and I even question that it actually balances a budget in ten years due to the a number of factors, like changing congress, our current borrow and spend mentality, and current debt and obligations. In another article is actually said that the GOP was joining the Democrats in a “shell game.” Spending and borrowing less is better than the opposite, but the results are the same, more debt. The Democrats are even worse. According to Rep. Chris Van Hollen’s comments about the Democrat’s proposed budget, “It will balance at the same time the Republicans’ budget balanced last year — which is out in the future, around 2040.”
But let’s take someone that most people, though they might disagree with on a lot of issues, they know he is right when it comes to spending and debt. Former Texas Congressman Ron Paul took to his Texas Straight Talk and in referred to the congressional budget debate as “a sideshow.” I agree with that assessment.
“Contrary to claims, neither party’s budget reduces spending,” Paul writes. “While the Republican plan increases spending a little less than the Democrat plan, it would still spend $5 trillion in 2023, an almost two trillion dollar increase over this year’s budget.”
Paul then went on to state that these projections of future budgets are meaningless because the current Congress cannot bind a future one. “Therefore, the projected spending for next year is the only part of the budget with any significance,” writes Paul. “So is there a great gulf between the two parties’ budgets for next year? No. For fiscal year 2014, the Democrat budget proposes spending $3.7 trillion, while the “radical” Republican budget spends $3.5 trillion!”
The former Texas representative said that the stock market seemed to be “unaffected” by the “manufactured budget crises,” which are two parties bickering over “minor differences in spending.” He then pointed to how monetary policy and the Federal Reserve help to facilitate deficit spending.
The Federal Reserve’s desire to monetize the federal debt is a main reason for the aggressive program of buying federal debt via the continuous quantitative easing. Under Chairman Bernanke, the Federal Reserve is pumping as much as $85 billion a month into the American economy. This out-of-control monetary policy is largely conducted behind closed doors, yet it has much more effect on the do day-to-day lives of Americans than Congress’s phony budget debates. The Federal Reserve’s polices erode the value of the dollar, causing prices to rise, which in turn diminishes people’s standard of living. This inflation tax may be the most hideous tax of all because it is both hidden and regressive.
Of course, the Federal Reserve can only keep this up for so long before doing serious damage to the economy. The Austrian school of economics teaches that the Federal Reserve is responsible for the boom-and-bust cycles that plague modern economies. The Federal Reserve’s aggressive money pumping runs the risk of creating hyperinflation — especially once banks stop hoarding their reserves and began flooding the economy with Fed-created fiat currency.
While Paul pointed out that the economic crisis of 2008 demonstrated that the Austrians were correct, while the Keynesians were wrong, he said that too many in Washington just don’t get it and compared them to drug addicts writing, “the longer the Federal Reserve enables Congress’s habit of deficit spending, the more painful will be the withdrawal when Congress is finally forced to kick the habit.”
Paul stated that the budget debate is more over symptoms rather than the root cause and warned that since the role of the Federal Reserve is facilitating deficit spending by the U.S. and other foreign governments, it would be a mistake to segregate monetary and fiscal policy. “Our nation will never get its fiscal house in order until we reform monetary policy.” He then said the first step towards this should be to give the “real facts” to the American people about the Federal Reserve’s actions.
Neither party is really questioning the welfare-warfare state. Sure, there is a lot of rhetoric, but what is actually done? Not much. We are still spending our way into oblivion in both areas and going well beyond the enumerated powers of the Constitution.
So what does this all come down to? Political theater. However, if we had a real discussion to deal with the removal of unconstitutional grants, Federal level cabinet departments (like Energy, Commerce, Interior, Education, and Housing and Urban Development, and possibly even Homeland Security), state sponsored welfare and question whether or not we really need to have hundreds of military bases all over the planet, we will continue to play a shell game with both ours and our children’s futures at the hands of congressional budget debaters playing the part of “Three Card Monte.”
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