Much of what President Obama said tonight was true. It is true that mortgages were lent to those who could not afford them. It is true that companies are shipping jobs overseas and at the same time receiving tax breaks. It is true that with the death of Osama Bin Laden and numerous Al Qaeda leaders, America is much safer. And it is true that millions of new jobs have been created since he took office.

The positives may sound good when you phrase them as such. But the grim reality is that the problems America faces are so significant, that the good things that have happened under this administration are eclipsed. While these jobs were being created, millions of jobs were being eliminated. We still have fewer jobs than when the president took office. And whether he likes to admit it or not, his own policies have played a part in this anemic growth.

EPA regulations piled on by this administration have cost us over 5% of our GDP, and that’s just one federal department of many. The Dodd-Frank financial regulation bill will cost $30 billion that we don’t have. The Small Business Administration estimates that the compliance cost of our current regulatory environment is $1.75 trillion per year. President Obama alone cannot be blamed for this, as his predecessors and those in Congress passed many of these regulations prior to 2009.

The president failed to mention that government programs incentivized lending of mortgages to those who could not afford them. Federal laws demanded banks loosen their restrictions or face legal action. The Federal Reserve further incentivized banks to comply by offering them easy credit. They lowered interest rates causing investors to put their money into long term projects and many focused on residential construction.

With his re-appointment of Ben Bernanke to chair the Federal Reserve System, this inflationary policy of unnaturally and artificially low interest rates has continued. The Fed has injected trillions of dollars into our economy under this administration, money which is not backed by matching economic growth or a significant demand for US dollars. This has caused the value of our currency to drop, and commodities such as gasoline have jumped in price as a result of a speculative bubble.

President Obama could have partially alleviated this problem by promoting domestic drilling for oil and the construction of new refineries, while we wait for science to develop inexpensive renewable energy. Instead, he has chosen to stand in the way of domestic oil production, while we continue to send billions of dollars to the Saudi elite, and turn a blind eye as they send that money to violent, theocratic institutions all over the world. He turned down the Keystone oil pipeline which would run from our largest supplier of oil—Canada—to the world’s most high-tech refineries in Houston.

It would have created tens of thousands of new jobs, including many for union workers that support Obama enthusiastically. They have been denied this opportunity in favor of capitulating to a lobby of environmental zealots known for its dishonesty in promoting its agenda.

The president covered a topic that I have focused much of my attention on in recent years: education. While he briefly touted the importance of returning control to local communities and schools, the other solutions he proposed are not only wrong, but they would further damage a K-12 system that is already a miserable failure at meeting the needs of the 21st century economy.

The president proposed forcing students to stay in school until they are 18 and claimed this would improve overall education. With all due respect, this is dead wrong. We have to get out of this ‘everyone gets a trophy’ mentality and realize that some children just will not learn. By forcing them to stay in school they hold back those of our children who have the drive to succeed. It is sad and politically incorrect to mention this, but it is true.

It has been mentioned in the writings of Jim Blockey, a reform school teacher from Las Vegas, I’ve discussed it with Robert Mansfield of Pennsylvania; a man born to a drug-addicted mother who grew up on the streets of Philadelphia with nothing and who rose to success when he returned to school, got his GED and joined the Army where he rose to the rank of Sergeant.I have heard even more examples from my friends who attended failing government schools in the inner cities of Ohio.

Although early childhood education in this country is world class, by the time our children reach high school, students in European countries like Belgium beat us on a number of metrics. Students in Japan, South Korea and Singapore blow us out of the water. China isn’t messing around either. They are targeting their most skilled students and placing them into advanced programs. When those students come to our universities they trounce their American peers in mathematics and natural sciences, and then our broken immigration system forces them to return to China and use the skills that we taught them against us in the global economy. A better system would incentivize and enable them to become Americans, and grow our economy instead.

The Belgians and the Japanese emphasize on the importance of school choice and privatization of education. And the British and the Japanese both emphasize on the important of the individual. Their programs are customized to fit the abilities of each student. In Japan, education is mandatory till around 15 years of age, at which they get their equivalent of our GED. Their upper-tier secondary schools are optional, and yet over 95% of Japanese students continue their education beyond the mandatory requirements. These programs are customized as either vocational education or preparation for university.

And one third of these schools are private!

In Great Britain, when you are 16, you can stay in the system, go to a trade school, or if you are smart enough go straight to college. Some states have adopted similar programs right here in America, where gifted students can achieve associates degrees upon graduating. I propose that we don’t waste their time teaching things they don’t need in the career they want.

We need to take heed to what the Belgians, the British and especially our Japanese friends have done. We shouldn’t mandate education to 18; we should eliminate the high school diploma and require a GED at the end of what is currently 9th grade as they do in Japan. Then make tenth through twelfth grade a customizable and optional program. Let students have choices of vocational programs, college preparatory programs, and if they are skilled enough, let them go straight to college. Provide a system that can ensure our 18 year olds truly are adults by giving them the marketable skills they need to make a living wage instead of mooching off of mom and dad into their twenties.

The status quo is unacceptable! And it fosters this sort of environment. To those who are worried about the students who wouldn’t go to school beyond their GED, they can always take the unskilled labor jobs and then work their way up the ladder or choose to continue their education at a later time in life. What makes such a system work so well is that the market will determine what skills are needed and relevant programs will be supplied.

This one-size-fits-all everyone-needs-to-go-to-college mentality is causing us to fall behind the competition. It is creating an education bubble that will inevitably burst. Many of these college degrees are becoming useless, rendering starting salaries that are not significantly higher than a high school diploma. The focus must be on marketable skills. General education is never a bad thing and should be viewed as a virtue, but it can only go so far.

The best possible system we can provide for our children is a system of individual choice, with a supply of curriculum determined by the market economy’s demand. A system that empowers parents, rewards the best students, and the best teachers, and yes—a system that discourages and reprimands failure.

The president went on to claim that college tuition is too high, and if it continues to rise he will pull subsidies from those universities. He’s right to acknowledge the avarice of our university system: costing its students thousands in waste on unnecessary programs and fees that should either be privately funded or purchased a la carte at the individual level.

Yet, he fails to understand the prime reason why tuition has risen at twice the rate of inflation and four times the wage rate. The federal government’s guarantee of all student loans has given greedy academics and administrators an opportunity that they would not have in a free market. They have constantly jacked up their prices, knowing that the government would credit the money to them no matter what, and the students would get stuck with the bill.

In the state of today’s economy, no one between the ages of 18 and 22 with the exception of military, civil service and a few lucky kids who invested from their teen years would be able to apply for a loan at a bank to pay over $10,000 a year for full-time tuition and living expense financing unless they had either a parent or credit-worthy friend co-sign for them. I know because I borrow primarily from a credit union to finance my education. Without a co-signer I likely would not have been approved, and if I was approved, my interest rate would be over 10%.

But the government federally guarantees many financial options for students who have little to no credit history. This has allowed the universities to set their tuition and fees well above a true market rate. In a free market where the finance was out of pocket or credit-based, they could not do this. Their classrooms would sit empty at those prices, and they would go bankrupt. Ending the federal department of education would quickly slash tuition prices in half, and prices would finally begin to increase in conjunction with wages and inflation.

When my father went to college in the 1970s, you borrowed directly from the school. A full-time summer job was enough to cover a year’s tuition and much of your living expenses at a state university. My father came here a poor immigrant, went to a small private college, and worked part time as a manual laborer. He graduated on time and with two years of debt.

My generation has not been so lucky.

This achievement by my father is the American Dream that we should want for all of our children, and it is morally wrong to deny them the benefits of a free market where they have the power to control their own destinies.

The message of class envy is dividing us and acting against the interests of that dream. Claiming that a job creating class is not paying their fair share when the top 1% of earners pay nearly 40% of the income taxes and the top 10% pay 70% of income taxes is ludicrous. But loopholes favoring one business over another certainly must go.

Our country needs a fairer, flatter tax. We need low rates for all, but we need few to no deductions. Compliance with our current tax laws cost American businesses nearly half a trillion dollars every year. Corporate taxes only make up 9% of our federal revenue yet their punitive nature begs the question: are they really worth it? What if the economic growth that was unleashed as a result of their elimination put so many people back to work, that the income tax revenue increased not only to offset that 9%, but to surpass it?

President Obama mentioned that companies are receiving tax breaks while they offshore jobs, and he mentioned the importance of incentivizing them with tax breaks to bring those jobs back here. There are over one trillion American dollars sitting overseas because investors don’t want it to be taxed by both the foreign country and the United States upon its return. Presidential candidate Ron Paul, former candidate Herman Cain, and myself all support a common sense solution to this problem.

I call upon President Obama to eliminate taxes on all foreign money repatriated into the U.S. economy. Let these corporations and businesspeople know that if they use that money to create American jobs, they can bring it back tax free! This is something that everyone should get behind! One trillion dollars is a lot of money with the potential to create millions of new jobs. If the president and both parties in congress are serious about restoring this economy to greatness, then a bill will be brought up and soon eliminating the repatriation tax, and President Obama will not hesitate to sign it.

There is too much at stake here to play class warfare politics. If government stole the entire net worth of every billionaire on the planet, not just in the U.S., it would total up to $4.5 trillion. Under this administration, the national debt has increased by over $5 trillion . We have debt because we spend too much, not because we tax too little. Both parties are to blame. We cannot afford our so-called entitlement system as is and we cannot afford a foreign policy of being the world’s policeman.

Now that we are out of Iraq President Obama said he wants to take that money, spend half of it to pay down the debt and half to build our own infrastructure. What he failed to mention was that there are no actual savings from the end of the Iraq War. We borrowed and printed money to finance our operations there and continue to do so in Afghanistan. There is no sudden influx of revenue we can use to pay down the debt, there is only a smaller deficit.

The President must realize that this is a Now or Never moment to prevent our country from going the way of many great empires in history, destroying itself under massive debt from an affluent society at home and a thinly spread militarism.

Do not give up on bipartisanship, Mr. President. Despite the differences between you and the Republicans, you can still get started on these things. Take a look at the recommendations of the Erskine-Bowles commission. Find the things in there that you and the Republicans can agree on, and immediately pass them. It will not be the end-all-be-all solution, but it is far better than doing nothing.

We owe it to future generations to actually build them a future. I understand the pressures of an election cycle, Mr. President. But the best way to get reelected is to do right by the American people. Embracing the free-market, ending corporatism, foreign nation building, and unsustainable benefit programs is the only way to save the American Dream.

Thank you, and God Bless America!

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Aaron Alghawi is finishing his B.S. in Economics at Texas A&M University; he is a board member and Director of Student Outreach for the Republican Liberty Caucus.

Of course with this popularity comes criticism. Too many Republican voters and self-described “Constitutional conservatives”—at least those I’ve come across—have been quick to describe the libertarian-minded congressman as “kooky” and a “crazy old man”. Their primary focus is on foreign policy but some on economics as well. Despite Paul’s fervent belief in Thomas Jefferson’s philosophy of avoiding “entangling alliances”, these conservatives often paint him as a “liberal”. Perhaps liberal in the classical sense like John Stuart Mill, but certainly not in the modern-day so-called liberalism of persons like President Obama, Ed Schultz, and Alan Colmes.

Many rumors are spread by the anti-Paul conservatives. Paul supporters are often referred to as “PaulBots”—ironically similar to author Jason Materra’s term “Obama Zombies” used in the book of the same name—although save for a few kooky and loud conspiracy theorists, Paul supporters tend to be better at justifying their support for the jolly old man than do the Obama Zombies. Paul is often mischaracterized as a bigot, even though there is no evidence to support this ad hominem attack.

But what the anti-Paul conservatives—usually of the interventionist line of foreign policy thinking that is commonly referred to as neoconservatism, though having its roots in Woodrow Wilson—fail to do is actually look at what Paul’s foreign policy positions are and have been and see if they have any connection to reality.  Paul’s years of studying the Austrian School of Economics have had a surprising effect on his analytical skills when it comes to foreign policy.

Recently, Ron Paul supporters posted a video to Youtube entitled “Ron Paul the Master”. It shows a collection of speeches and interviews in which Ron Paul makes some stunning predictions about our current economic woes and even international conflicts of the present. And he does this as far back as 2002. Of course no one gave him the time of day.

Let’s analyze one of these speeches, which begins at 3 minutes into the video and was presented before congress on April 24, 2002.

“Our government intervention in the economy and in the private affairs of citizens, and the internal affairs of foreign countries, leads to uncertainty and many unintended consequences. Here are some of the consequences about which we should be concerned.

The United States, with Tony Blair as head cheerleader, will attack Iraq without proper authority, and a major war, the largest since World War II, will result.

Major moves will be made by China, India, Russia, and Pakistan in Central Asia to take advantage of the chaos for the purpose of grabbing land, resources, and strategic advantages sought after for years.”

This is absolutely true. The chaos gave us many unexpected problems. Al Qaeda’s presence in Iraq grew after the invasion. And the country is now under Shiite control, moving it dangerously close to Iran. In 2002, Iran’s president was the more philosophically minded Mohammed Khatami…but now we have an anti-Semitic loudmoth, Ahmedinejad. Russia has moved into Iran to build an energy alliance. Vladimir Putin, and his cronies in Gazprom and Lukoil would love to gain control of the natural resources in Iran and Russia has been helping the Islamic Republic develop nuclear technology which US intelligence believes is being developed for destructive purposes. Let’s hope and pray they are wrong.

China and Pakistan have certainly taken advantage of the chaos. Not only is their alliance stronger, but the oil contracts in Iraq are going to—guess who—China! Kind of debunks the whole left-wing moonbattery that Iraq was “blood for oil”.

You can find more detail in these articles:

http://money.cnn.com/2007/04/05/news/international/iraq_oil/index.htm

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/28/AR2008082802200.html

http://www.cbn.com/cbnnews/world/2010/June/China-Benefits-from-Oil-Deals-with-Iraq/

“Current Israeli-United States policies will solidify Arab Muslim nations, this will include those Muslim nations that in the past have fought against each other.

Some of our moderate Arab allies will be overthrown by Islamic fundamentalists.”

What exactly do you think the “Arab Spring” is? Peaceful democratic people overthrowing dictators? Not quite. The Muslim Brotherhood, a precursor to Hamas, has founded its own political party in Egypt; it is possible these theocrats will gain significant power in the new government. Let’s not forget that Libyan and Yemeni rebels have been linked to Al Qaeda. Just the other day the new Al Qaeda cheif Ayman Al-Zawahiri was lauding the rioters in Syria.

And certainly the dictators—such as Gaddafi and Mubarak—aren’t moderate in the eyes of their own people, but often American politicians have viewed them as such. Useful when we need them, disposable when we don’t as Mobutu Sese Seko and Saddam Hussein once were.

“Many American military personnel and civilians will be killed in the coming conflict.

The leaders of whichever side loses the war will be hauled into and tried before the International Criminal Court for war crimes. The United States will not officially lose the war, but neither will we win. Our military and political leaders will not be tried by the International Criminal Court”

This wasn’t entirely true, Saddam was tried by his own people. But did we really “win” the war. We turned the country over to the Shiite theocrats instead of secularists and now those people are getting close to Iran.

“An international dollar crisis will dramatically boost interest rates in the United States.”

Price inflation, with a major economic downturn, will decimate U.S. Federal Government finances, and exploding deficits and uncontrolled spending.”

Ah yes, remember when that Burger King value meal was around $3.

“Federal Reserve policy will continue at an expanding rate, with massive credit expansion, which will make the dollar crisis worse. Gold will be seen as an alternative to paper money as it returns to its historic role as money.”

Though Bernanke has kept interest rates low, there is the prospect of T-Bill interest rates going up with the forthcoming debt crisis. There has been a dollar devaluation of 40% against the Euro since this 2002 speech, nearly 14% since June 2010 alone according to an article in The Washington Post.

Quantitative easing most definitely contributed to the high gas prices we see today. If you think it was all the fault of this “Arab Spring”, take a look at the Commodity Price Index some time. This freshly “recycled” dough being put in the hands of speculators causes them to artificially drive up the price of oil and other commodities, some of which are being bought as a hedge against the falling dollar; quite the vicious cycle.

As for gold, when Congressman Paul gave this speech gold was roughly $300 per ounce and today it stands at more than $1615 per ounce; you can check out the historical data on gold prices here.

That’s a whopping 438% increase.

“Erosion of civil liberties here at home will continue as our government responds to political fear in dealing with the terrorist threat by making generous use of the powers obtained with the Patriot Act.

The Congress and the President will shift radically toward expanding the size and scope of the Federal Government. This will satisfy both the liberals and the conservatives.

Military and police powers will grow, satisfying the conservatives. The welfare state, both domestic and international, will expand, satisfying the liberals. Both sides will endorse military adventurism overseas.”

The president today has the power to order the assassination American citizens, as in the case of Anwar Al-Awlaki—traitorous as he may be, this is wrong. The Constitution has rules for punishing those who commit treason. But President Obama has ignored this and has ordered him to be killed if possible with drone strikes in Yemen.

The welfare state has expanded significantly. A new, unaffordable addition to Medicare under Bush 43 was passed. We saw more than a trillion dollars of so called economic stimulus under Nancy Pelosi and the combined presidencies of Bush and Obama, and that’s not even including Obama’s wasteful and unpopular health care overhaul. Not to mention billions of foreign aid to countries, some of which—such as Pakistan—are less than trustworthy.

“This is the most important of my predictions: Policy changes could prevent all of the previous predictions from occurring. Unfortunately, that will not occur. In due course, the Constitution will continue to be steadily undermined and the American Republic further weakened

During the next decade, the American people will become poorer and less free, while they become more dependent on the government for economic security.

The war will prove to be divisive, with emotions and hatred growing between the various factions and special interests that drive our policies in the Middle East.”

The middle east is on fire right now. The Israelis are more concerned for their security than ever before. Meanwhile the Saudi lobby pushes us to deal with Iran, with the hopes that they can beat the Islamic Republic in terms of spheres of influence in this theocratic mess of a region.

“Agitation from more class warfare will succeed in dividing us domestically, and believe it or not, I expect lobbyists will thrive more than ever during the dangerous period of chaos.”

This one is self evident. Class warfare is a weapon of distraction used by those who wish to expand the size of government while fat cats at firms such as General Electric, Goldman Sachs, and BP fatten their wallets thanks to government’s policy of picking winners and losers via loopholes and subsidies. The administration may talk the talk, but just take a look at Obama’s campaign contributions and how cozy he is with Jeffrey Immelt; how GE almost got away with paying no taxes, and how a former Goldman Sachs legal adviser with no judicial experience now sits on the Supreme Court.

In addition, a piece was posted two days later, here, containing more words than in the video, which appears as if it may have been cropped to save time. Some of the predictions in that post, such as a reinstatement of the draft did not come true (thank God), but there is one of note that have somewhat come to fruition

“Some European countries will clandestinely support the Muslim countries and their anti-Israel pursuits.”

If you go on YouTube and read the comments sections on almost any video relating to middle eastern politics, you will find that it is a cesspool of anti-Semitic and anti-Israel rhetoric, and many of the people making these comments are living in Europe. You can take my word for it as a person of Middle Eastern descent who keeps up with these things, or you can check it out yourself. The barbaric theocrats of Hamas are given the benefit of the doubt by many YouTube in the UK, France, Germany and Greece, while the Israelis are fallaciously smeared as “genocidal” and heartless.

Ron Paul’s predictions show a deep understanding of not just economics, but human emotions in the geopolitical world. Those who dismiss him as a “nut” and on the fringe would be wise to thoroughly read this article before making such a judgment. The facts are on his side, and he truly does seem to know what he is talking about.

Dr. Paul concludes with:

“I have no timetable for these predictions, but just in case, keep them around and look at them in 5 to 10 years. Let us hope and pray that I am wrong on all accounts. If so, I will be very pleased.”

Well, 2012 will be ten years in. You weren’t wrong on all accounts Ron, in fact, you were right on a great many of them. We should all be most displeased that these predictions came true.

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Aaron Alghawi is a senior economics major at Texas A&M University, as well as an alternate board member and  Director of Student Outreach for the Republican Liberty Caucus.

Photo of Presidential Candidate Ron Paul (R, TX) by: Gage Skidmore (CC BY-SA 2.0)”]

Published 7/29/11 on Examiner

Liberty Republicans Oppose E-Verify Legislation
Proposed Bill Would be a Gross Violation of Personal and Economic Liberty

WASHINGTON, DC — Affirming a long commitment to privacy rights and free enterprise, the Republican Liberty Caucus National Board has joined numerous other pro-liberty organizations in signing a letter in opposition to the “Legal Workforce Act” (HR 2164) and the job-killing and unconstitutional E-Verify system which it would establish.

“Concerns about immigration and hard economic times should not be used as a pretext for legislating away the rights of the people and transferring the cost of immigration enforcement to small businesses,” said RLC Chairman Dave Nalle. “I lived in Russia under Soviet Rule when I was a teenager and remember being required to carry an internal passport and present my papers at government check-points.  I do not want my children and my fellow Americans to ever experience that same violation of their privacy and liberty and E-Verify lays the groundwork for exactly that kind of security state.”

This bill will create a de facto national ID card system which would have to apply to citizens as well as immigrants to be effective.  It violates the rights to free speech and free association of citizens guaranteed by the Bill of Rights.  It will place a huge cost on businesses, raising costs and killing jobs and forcing them to become the government’s immigration komissars.  It opens the door to further legislation which will take away more liberty and hurt small businesses most of all.

“If the federal government is incapable of tracking the immigrant workforce and enforcing the terms of the visas it issues, that problem can’t be solved by transferring that burden and cost to employers,” observed RLC National Board member Bill Westmiller.  ”Rather than following failed policies with bad law, the government’s goal should be to reform the laws to make them conform with modern reality; make them clear, simple and easily enforced.  Walls, armed guards and spies in the workplace can’t make a bad set of laws good.”

“As a nation our needs are best served by market-based solutions to dealing with immigration. Free labor makes the economy stronger and this sort of draconian legislation will drive more workers off the books and out of the tax rolls, expanding the employment black market and leading to crime and exploitation,” said Chairman Nalle.  ”Since 9/11 we have seen too many attacks on our rights in the name of security and economic expediency. We have seen the Bill of Rights shredded and now Congress plans to make another assault on the frst and fourth amendments.  This cannot be tolerated.”

Working with other concerned groups the Republican Liberty Caucus will be calling on our state chapters and our nationwide network of grassroots activists to demand that Congress stop this headlong rush into more bureaucracy, bigger government, greater surveillance and less freedom.  It is an insult to the founding principles of this nation that this law was ever entered for consideration.  It will be a shame if it makes it out of committee and a crime against every citizen if it is not soundly defeated on the floor.

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The Republican Liberty Caucus is a nationwide grassroots organization which promotes individual liberty and limited government within the Republican Party.   You can find more information about the Republican Liberty Caucus at www.rlc.org

To view the coalition letter against E-Verify click here.

AUSTIN, TX -  The plan to raise the debt ceiling agreed on by the House this weekend is a total fraud, a vessel of broken promises, and a gross evasion of congressional responsibility to spend within its means, according to the Republican Liberty Caucus, a national organization of activists with official affiliates in 42 states. The Caucus Board of Directors blasted the latest deal as an insult to the basic American principles of individual liberty, limited government and private enterprise.

“The details will probably be secret until after the law is signed by the President,” says RLC Director Bill Westmiller of California, “but it is certain that it will authorize enough additional debt  to pay the costs of last year’s bailout, the Democrat’s stimulus, all the expenses of ObamaCare, and the continuation of extravagant federal programs implemented by both Republicans and Democrats over the past decade.”

The nearly three trillion dollar increase in the Debt Ceiling will take away all pressure on Congress to implement responsible spending policies for the next eighteen months, ensuring that spending and debt issues will not be prominent during the 2012 campaigns.

“This deal is a blatant violation of the promise from House Speaker John Boehner that every dollar of new debt would be matched by a dollar of cuts,” noted RLC National Chairman Dave Nalle. “All of the cuts are stretched over ten years, while the deficit spending will occur in less than eighteen months,” explains Nalle, “which means that we’re actually getting less than ten cents of current cuts for every dollar of perpetual debt. That’s not a deal, it’s a blank check for bigger government.”

The final plan includes unspecified spending cuts, which would be spread over ten years. For the coming fiscal year, there will be real cuts of less than $100 billion dollars. Since the bill assumes that the same level of reduced spending will continue for ten years, the “savings” are simply added together, for the supposed $1 trillion  of cuts.  There’s no real plan for specific long term cuts.

“Whether it’s one trillion or three trillion, it’s meaningless,” explains RLC Northeast Regional Director Vic Berardelli of Maine. “The Supreme Court has already ruled and all legislators acknowledge, that one Congress cannot impose any obligations on a future Congress,” says Berardelli. “That means that all of the promised cuts are not binding on the federal government after the next election.  They might as well not even exist”

The Supreme Court threw out the Gramm-Rudman Balanced Budget Act in July 1986, as a violation of the Constitution, by a 7-2 vote. Every prior budget authorization must be renewed by the new Congress, or it simply expires.

“There are no real cuts in the debt ceiling compromise,” says California RLC Director David Johnson. “Instead there are just promises of cuts to ‘projected spending,” which is another way of saying they’ve eased up slightly on the accelerator of the car heading for the cliff. These guys aren’t even trying.  I fully understand that the big cuts needed from defense and entitlement are controversial. But where are the smaller uncontroversial cuts? Why are there no cuts in corporate welfare? Why no cuts in foreign aid?”

The main source of added revenue is more than a trillion dollars obtained by auctioning off cell phone frequencies. All of those costs will be passed on to clients of the cell-phone companies with increased prices. Although technically not a “tax increase”, it will produce additional federal revenue that can be applied to new programs or expansions of old programs.

“This authorization, applauded by leaders of both parties, does absolutely nothing to reduce the debt,” says RLC Director Aleq Boyle of Georgia. “The deal actually allows a 50% increase over ten years, from $14.3 trillion to at least $21 trillion by 2021. Even if annual budget deficits were reduced by 100% over the coming decade, the actual public debt and annual interest due will increase more than it has in any prior decade. The pretense that the debt problem is solved is a perverse charade.”

“The fear-mongering about this issue is truly craven,” says RLC Vice Chairman Aaron Biterman.  “Telling people that failure to adopt this huge debt increase will result in U.S. bond rating downgrades, higher consumer interest rates, and possibly cutting entitlement payments. That’s all pure fantasy. The reason that the monopoly federal agencies cut bond ratings is because the interest demanded by the consumers of government bonds has increased, not because an agency lowers their rating.”

Currently, U.S. Federal Debt is nearly 100% of GDP, comparable with Italy (120%) and Ireland (114%). Those countries have had their debt ratings downgraded simply because of the level of their debt in comparison to their GDPs.  Two of the major U.S. ratings agencies say that adding more debt will not prevent a ratings downgrade: the Congress must show an earnest effort to reduce the outstanding debt, not merely the deficit.  This bill does not include enough cuts to offset the massive increase in debt.

“In any case, there is no reason to default on bond debt or interest,” adds Westmiller, “since the government has more than enough incoming revenue to pay all public debt, all pension checks, and everything else enumerated in the Constitution as a federal power. In fact, the Fourteenth Amendment requires that the U.S. Treasury honor all debt instruments and pensions ‘without question’,” says Wesmiller.  “Contrary to the claims of some Democrats, nothing in the 14th Amendment gives the President any power to borrow money at his sole discretion.”

“The most grievous flim-flam in this deal was trashing the requirement that Congress send a Balanced Budget Amendment to the states,” notes RLC Secretary Corie Whalen, “which simply won’t happen. The deal was modified to simply require one vote on the issue, which Democrats will easily defeat in the Senate. That ends any hope that Congress might actually allow the states to make a decision on balancing the federal budget.”

“The entire budget deal is a shameful fraud,” says RLC Chairman Dave Nalle. “It doesn’t do what our leaders say it will do; it allows increased revenues demanded by the President; it only pretends to cut spending, and it gives Democrats the power to force tax increases and other revenue raising measures through a Super Committee before the end of the year.”

“Although this agreement was a failure and a fraud,” concluded Nalle, “some praise goes to the small cadre of newly elected fiscal conservatives in the House, most of whom were endorsed by the RLC.  They at least spoke up for fiscal respnsibiity and forced a change in the terms of the debate. They stuck to their principles in the face of hysteria and doomsday threats. The RLC will be looking for more responsible candidates to join them in the House and the Senate in 2012.”

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The Republican Liberty Caucus is a nationwide grassroots organization which promotes individual liberty and limited government within the Republican Party.   You can find more information about the Republican Liberty Caucus at www.rlc.org

It’s a very heated issue in which some of the facts are being lost, so let me straighten them out.

Boehner’s Plan

Boehner’s current proposal is being described in some quarters as an increase in cuts from his earlier proposals, but in fact the cuts included are bizarrely inadequate. The plan currently includes $1.2 trillion in cuts over 10 years with another $1.8 trillion in unspecified cuts to be implemented by a special committee at some point in the future, in exchange for a $2.7 trillion increase in the debt ceiling.

There are a number of problems with this proposal.

The first phase of cuts only comes out of discretionary spending and all cuts to entitlements are left to the bipartisan committee at some future date. Whether this committee or its cuts will ever happen is highly debatable when the balance in Congress shifts next year and plans get rewritten.

The cuts are spaced out over a 10 year period, amounting to only $300 billion a year, and with more than half the cuts still in abeyance, the real cuts in the first year are only $120 bilion or likely even less. In fact, the way the cuts are structured the cuts in the next year may be as low as $6 billion. And because the cuts are not enough to offset increases in debt just from interest, spreading them out over 10 years means that they will be outpaced by debt increase and never come close to catching up. Ten years of small cuts to offset an immediate debt limit increase only works if there are not more debt limit increases down the road, and with cuts so small further increases are unavoidable.

The total cuts over a 10 year period, assuming even the entitlement cuts happen is less than the proposed budget deficit for the next two years, leaving 8 years worth of further debt increase in the next 10 years adding up to an increase of almost $10 trillion in the national debt. So the net result of the plan is a massive increase of the debt, not any real reduction.

The current Boehner plan also includes no provision to pass a strong Balanced Budget Amendment as a prerequisite to any debt limit increase. Every Republican in the House and Senate signed on to the Cap, Cut and Balance pledge and Boehner’s plan fails to meet its requirements. It also puts no caps on federal spending except for discretionary spending which makes up about a third of the budget.

Boehner’s plan is so bad that Sen. Harry Reid can actually make an argument that his proposed plan has more real cuts than Boehner’s does, because Reid’s plan includes substantial cuts to military spending and more overall cuts per year. It still results in a huge net increase in spending, and it raises taxes on those who already shoulder most of the tax burden, but in total it’s just a different bad plan, not really any worse than Boehner’s.

The Fearmongering

Perhaps the biggest lie in this whole melodrama is the claim coming from the White House and from Tim Geithner that the US will default and have our credit rating downgraded next Tuesday if we don’t raise the debt ceiling. These claims are nothing but an irresponsible intimidation tactic.

As Senator Rand Paul eloquently points out, and as I explained in detail in a previous article, there is absolutely no need to default on our debt if the debt ceiling is not raised. By prioritizing spending we can easily meet the requirements to servie the debt and provide for entitlements out of incoming revenue and we could probably keep doing that for 6 or 8 more months before it became a real problem.

Of course, this would put a lot of pressure on the administration because Obama and Geithner would be the ones who would have to make those spending decisions and they would get the blame for cutting subsidy programs, furloughing federal workers, closing down national parks and the other small short-term austerity measures necessary to meet obligations. They’d rather scare us with empty threats than admit the truth that we’re broke and need to tighten our belts – even in the federal government.

The other big lie here is that raising taxes on the “wealthiest among us” will actually solve the problem. If we were to raise taxes substantially on the top 1% of earners that would not be enough to balance the budget. Even raising taxes to the 70% rate of the Reagan era – almost double the current rate – would only raise about $300 billion more a year at a huge cost to the economy. So when Obama talks about raising taxes on the rich, he’s mostly making an argument for a symbolic act of class warfare.

What they also don’t point out is that we’re just as likely to have our credit rating downgraded if either of the current proposals passes. Because both Boehner’s and Reid’s plans are so inadequate they don’t represent the kind of real solution to the long term debt problem which international credit agencies are looking for, so they’re really worth nothing at all.

Real Solutions

The reality is that we need to put all this bickering aside and pass a real plan which actually addresses this problem in a substantive way. We’re not getting out of this mess without major cuts and a real cap on spending along with some policy changes which will spur economic growth.

• Pass a Balanced Budget Amendment and cap spending at a level tied to a percentage of GDP like the 18% proposed in the Cap, Cut and Balance pledge. Only by capping future spending can you make long-term cuts offset short term debt increases.

• Make cuts equal to or greater than any increase in the debt limit and make them take effect more quickly so that they reduce debt faster than interest increases it. A minimum of $600 bilion a year for 5 years would be a responsible proposal. And to do this you would need to go beyond the Boehner proposal to go after both military spending and entitlements. Just ending our current foreign deployments would take care of most of these cuts.

• If a tax increase is what it takes to get President Obama on board for real cuts, then let him have an increase of 10% on those earning in the top 1% (over $380 million a year), but offset that increase with a 10% cut in capital gains, which would have a great stimulative effect on the economy.

• Do the only thing which will really spur the economic growth which will get us out of a recession relatively painlessly. Cut corporate taxes. They don’t bring in that much money and that revenue is going down as companies offshore to avoid what is now the highest corporate tax rate in the world. Cut the rate substantially or eliminate all corporate taxes so that they will come to the US as a tax haven instead of fleeing and taking jobs and money out of the country with them. Short of lowering wages – which is not at all popular – cutting taxes on businesses is the easiest way to create jobs and grow the economy.

At this point the melodrama surrounding this issue is becoming embarrassing. Real problems need real solutions, not pandering, fearmongering and passive-aggressive walkouts on negotiations. Boehner, Reid, Geithner and Obama need to start acting like grown-ups, make serious proposals and work out compromises which give up more than either side wants for the good of the people and the nation.

This article appeared previously on Blogcritics Magazine.

The Republican Liberty Caucus of New Hampshire sent out a press release congratulating House Speaker William O’Brien and House Republicans for passing a responsible budget that completely reverses the course of previous legislatures and historically cuts spending in New Hampshire by 11.7 percent, setting state government on a new course to fiscal sanity.

The RLC endorsed over 80 of the current elected House members. That coalition, no doubt, has given the Republican House the backbone needed to tackle the budget, Right to Work, and a favorable business climate.

“There is no doubt that this budget is historically positive for the people of New Hampshire,” said Andrew Hemingway, chairman of the Republican Liberty Caucus of New Hampshire. “Speaker O’Brien and the House members we elected in November [did] exactly what they promised voters they would do by cutting taxes and spending without any budget gimmickry.”

The balanced $10.2 billion New Hampshire budget for Fiscal Years 2012-2013 relied heavily on House leadership’s position that budget writers could not exceed revenue projections. The Senate was only able to shift revenue projections by 0.4 percent from the House projections in January. At the same time, House leadership was also able to convince Senators not to raise new taxes, fees or add additional downshifting to the counties, cities or towns of the state. In fact, the House was even able to secure additional tax cuts to increase business traffic from out-of-state shoppers.

In general and education trust fund spending, the House was able to secure a $4.42 billion budget, a 12.8 percent decline from the previous cycle. The budget cut is the largest in modern history—maybe longer.

“As an organization that understands the principles that lead to the most prosperity for the most people involve less government spending, lower taxes and fewer bureaucrats enforcing senseless regulations, we are looking at this budget as the first gleam of light from a new dawn of common sense governing,” Hemingway said. “I expect the voters of New Hampshire to respond quite favorably to the principled stand taken by House Republicans, and against the scare tactics and deception of those who would prefer politics as usual.”

Not only did this budget historically reduce appropriations by about $1 billion in all funds and $467 million in general funds, it also eliminated 1,500 unneeded government positions (most of them unfilled, anyway), and it reduced some of the more onerous taxes and fees instituted by the Democrats when they were in power, such as the surcharge on auto registrations. The budget also included comprehensive reforms to the State Retirement system—the first step toward eliminating an unrealistic system that taxpayers can no longer afford.

At the same time, the House compromise budget fully funds education by sending $4 million more than the governor’s budget and 9.5 percent more than the current budget to the local cities and towns. As recognition that restorative change takes time, the budget also funds Health and Human Services programs for the developmentally disabled, children in need of services, children with special needs, domestic violence programs and adoption subsidies, while also prohibiting the use of taxpayers’ money for abortions.

Montana Republicans have a huge majority in the State House and a small majority in the State Senate, so they should be moving productive legislation along without trouble. Unfortunately, two recent examples show that they are not committed to common sense government at all, but are instead beholden to special interests, corporate socialism, and the nanny state.

You’re not even going to believe the legislation being courted by Montana Republicans! Check it out:

Montana Republicans Try to Gut Medical Marijuana Law

With the exception of Republican Liberty Caucus-endorsed State Representatives Jerry O’Neill and Mike Miller and several moderate Republicans, the rest of the Republican elected officials in Montana voted to gut the voter-approved medical marijuana law last week.

Because Governor Brian Schweitzer (Democrat) vetoed the Republican attempts to kill the law, BusinessWeek reports that “Many lawmakers from both parties say something needs to be done to rein in medical marijuana in Montana now that it has reached beyond those with severe illnesses for whom voters in 2004 meant the law to apply.”

According to the Montana Department of Public Health and Human Services, there are 29,948 registered users in the state. As we reported earlier, last month the federal government decided they needed to step in by raiding medical marijuana businesses in the state under the guise of investigating “drug trafficking and tax evasion.” This despite a promise from the Obama Administration claimed it would not override state law.

According to BusinessWeek,

“Three lawmakers from each chamber will begin meeting this week in a conference committee to figure out the final form of the overhaul measure, Senate Bill 423, before it lands on the governor’s desk. Since the beginning of the session House Bill 161, a repeal of the voter-approved marijuana law, has been the favored measure of Republican leadership. House Speaker Mike Milburn, R-Cascade, carried the bill through the Legislature but the possibility of a governor veto forced Republicans to work up a contingency plan.

Last month, Republican lawmakers made a last-minute introduction of a bill to overhaul of Montana’s medical marijuana industry. After Republican fears of a governor veto became a reality Wednesday, the overhaul measure carried by Senate Majority Leader Jeff Essmann, R-Billings, has become what is likely the last chance the Legislature has to restrict medical marijuana. But the measure has not had an easy passage and it still has key hurdles left to clear with just a few days left in the session to do it.”

The only common sense on this issue, aside from Governor Brian Schweitzer, is from RLC-endorsed legislators like Jerry O’Neill and Mike Miller. According to Representative Miller, “If the federal laws (related to the Montana state medical marijuana law) were gone, it could be just another prescription filled by a pharmacist. The bottom line is that the legislature did not do its job and put the appropriate rules/laws in place once the initiative passed in 2004. I believe it is up to the legislature to fix the mess it created. And it is a huge mess and it is being grossly abused by some,” Miller said.

Miller took what apparently is an unpopular position, concluding at his website, “While many people disagree with my vote to not repeal, I hope this helps them to understand it a little better.”

RLC-endorsed Reps. Jerry O’Neill and Mike Miller voted to protect the Montana medical marijuana law.

Renewable Energy, Curbing Property Rights via “Corporate Socialism”

According to LibertarianRepublican.net, “Sounding like something straight out of an Ayn Rand novel, a renewable energy corporation out of Canada is pushing legislation to allow for seizure of private property rights in Eastern Montana. The Bill pits small landowners such as ranchers in Eastern Montana, against government-backed corporate interests and many environmental groups in support of renewable energy.”

From the Great Falls Tribune, “Montana Senate revives eminent domain bill”:

“HB 198 would grant private developers — including Canadian developer Tonbridge Power — the ability to use eminent domain authority to condemn private property so that transmission lines can be built.

The company wants to build a 214-mile international Tie Line through Montana and Alberta. The bill would [give] Tonbridge the authority it needs to condemn private property along the proposed MATL route in Montana.”

After nearly three hours of debate, 16 Democrats sided with 12 Republicans to pass the measure.

Republican proponents of the measure said if the legislature failed to enact HB 198, it could doom the state’s economy.

“We need an export economy in this state,” Senator Alan Olson said. “We make money to fund our education system, and we make money to fund our senior services on an export economy. If a minority interest is going to shut down an export economy, if we continue to circulate that same stale dollar around the state, we’re done.”

Opponents of the measure, including Sen. Art Wittich, R-Bozeman, said the bill would give private corporations unprecedented power, while sacrificing the rights of private property owners.

“It’s corporate socialism at its best,” Wittich said.

“To me, good government is limited government that respects everyone’s rights and properties,” Wittich says. “I support accountability in government spending and promoting private sector prosperity by adding value to our resources.”

The bill goes for a final vote on Thursday. Then, it heads to Democrat Governor Brian Schweitzer for his signature.

It is not known if Schweizter would sign the legislation, but it appears likely that he would.

RLC member Eric Dondero worked to get a property rights initiative on the ballot in Montana in 2006. Here, he is collecting a signature from a resident.

Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, RLC-endorsed freshman State Representative Glen Bradley of Youngsville wants North Carolina to issue its own legal tender backed by silver and gold. He introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.

If the state treasurer starts accepting precious metals as payment, Bradley said that could prod the private sector to follow suit — potentially allowing residents to trade gold for groceries. “I think we’re in the process of inflating a dollar bubble that could be very devastating. The idea is once the study commission finishes its work, then we could build on top of the hard-money currency with an actual State Tender Act that will basically [issue currency] in correspondence to precious metals stored in the state treasury.”

Bradley predicts that world events could soon prove him prescient. “I don’t necessarily believe [the Federal Reserve] is about to collapse right now,” said Bradley, 37. “There are still a few things they can do with qualitative easing to sort of extend their survival. It’s just a question of how long. Right know we have a lot of sovereign debt going to China and Japan. When that debt stops being purchased by foreign countries, that currency is going to flood back onto American shores, potentially creating hyperinflation and bursting the currency bubble we have coming in Federal Reserve notes today.”

Mr. Bradley, a self-employed computer technician and former Marine, attended Southeastern Baptist Theological Seminary in Wake Forest until he could no longer afford tuition. While he has not taken any in-depth classes in economics, Bradley described himself as a devotee of the Austrian School, a branch of economic thought that originated in Vienna and was influential before World War I.

A strict Constitutionalist, he has also introduced bills to exempt North Carolina agricultural products and firearms manufactured in the state from federal regulation as long as they are not sold or exported across state lines.

Bradley’s bill has yet to attract any co-sponsors among his fellow Republicans. The office of House Speaker Thom Tillis declined to say whether the Republican Party leadership supports Bradley’s proposal to create a state currency. His bill has been referred to the House rules committee, where legislation is sometimes sent to die. “There are a lot of diverse opinions and diverse views in our caucus,” said Jordan Shaw, Tillis’ spokesman. “I don’t think we’re going to forecast what will happen.”

Thanks to the Raleigh News Observer, DrudgeReport.com, and libertarianrepublican.net for covering Rep. Bradley’s legislative proposal.

First, the Federal Communications Commission’s 3 Democrat majority voted to approve proposed rules that amount to a hostile takeover of the Internet by a government agency. The proposal — misleadingly described by proponents as an attempt to insure “net neutrality” by guaranteeing equal access to the Internet — was introduced a year ago by Obama’s appointed FCC chairman Julius Genachowski.

A federal court has ruled that the commission has no authority to regulate the Internet, and a bipartisan group of Senators and Representatives warned Genechowski not to attempt to impose a regulatory regime on the Internet earlier this year. The FCC, an unelected bureaucracy, still has not released the full text of its net neutrality rules yet.

You better believe that this unconstitutional power grab to secure “net neutrality” by the FCC is just a small sign of whats to come in the realm of federal regulation of private citizen behavior.

And, on that note, the U.S. House of Representatives and U.S. Senate both passed the so-called Food Safety and Modernization Act — the largest government power grab as it relates to food since 1938 (when Congress gave the FDA the authority to oversee the safety of food, drugs and cosmetics).

But, have no fear, it will only cost $1.4 billion to implement the new “safety” regulations.

The law will give the Secretary of Health and Human Services and the FDA tremendous control over the U.S. food supply. It also puts all food and all U.S. farms under Homeland Security and the Department of Defense in the event of contamination or an ill-defined emergency. The bill includes NAIS, an animal traceability program that threatens all small farmers and ranchers raising animals. And it will allow the government to mandate antibiotics, hormones, slaughterhouse waste, pesticides and GMOs.

Not only did 74 members of Congress fail to vote on the measure, but the bill also passed the Senate without a single dissenter. Fortunately, the new Congress will be in session soon, where I have no doubt there would have been someone with the courage to hold up this anti-liberty legislation.

A not-so-surprising standout in the House of Representatives rankings is Jeff Flake (R-AZ), who is the first member of Congress in the history of the Liberty Index to score a perfect 100/100 in the Economic and Personal Liberty components of the index. Flake was not alone at the top, with perennial top scorers Ron Paul (R-TX) and Dana Rohrabacher (R-CA) not far behind. They both scored 100 on Personal Liberty and 96 on Economic Liberty because of problematic votes on earmarks and a technology bill. Other than these minor exceptions, Paul and Rohrabacher were outstanding champions of liberty.

With Democrat spending completely out of control, many Republicans were given an opportunity to oppose their policies and as a result score very well on Economic Liberty. Forty-eight House members scored perfect 100s on Economic Liberty. Personal Liberty scores were less consistent, though 115 House Republicans scored in the Libertarian quadrant on their combined scores.

Senate Republicans were somewhat less impressive than their House allies, but five did manage to score perfect 100s on the Economic Liberty scale. Because of the types of votes that came up in the Senate, it was more difficult to score well on Personal Liberty, but 31 Senate Republicans did have combined ratings in the Libertarian category.

In both houses Democrats scored substantially less well on both Economic and Personal Liberty issues. Two-hundred and twenty-five Democrats in the House and 36 in the Senate scored so low that they were scored Authoritarian, siding with increasing government power and reduction of civil and personal liberties. Three House Democrats, all from California and including outgoing Speaker Nancy Pelosi, scored perfect 0/0 results, voting against liberty on every major issue to come before them. Senate Democrats did somewhat better, especially on Personal Liberty, but Senator Ted Kaufman (D-DE), who was fortunately never elected to office, was the one Senator to score an imperfect 0 on Economic Liberty.

In many cases the deciding issues which separated those who did well from those who did poorly were votes that were split on non-partisan lines, particularly over issues of military spending, foreign policy and national security, where both parties have strong internal divisions.  Many Republicans are rejecting the policies of the Bush era and moving toward limiting America’s overseas commitments, while some of the most powerful Democrat leaders remain committed to a policy of war and nation building.  And, of course, many of the important votes where Republicans took a stand against bigger and more intrusive government were votes where their efforts were doomed and produced nothing more than good ratings on this index due to their minority status.

The Liberty Index is based on forty roll call votes, twenty on issues of Economic Liberty and 20 on issues of Personal Liberty in each chamber. The votes are compiled and analyzed by Professor Clifford Thies who holds the Eldon R. Lindsay Chair of Free Enterprise in the Economics Department of Shenandoah University. He is assisted by an anonymous panel of experts who have worked with him on the project for many years. This year his work is dedicated to the late David Nolan, whose system of charting political ideologies has been a valuable tool for educating voters and promoting libertarian ideas.

The full results of the 2009 Liberty Index are available in PDF format from the Republican Liberty Caucus, including charts of the distribution of the ratings and detailed analysis by Professor Thies. For comparison you can find past results going back to 1991 in the RLC archives.