'TWO PERCENT INFLATION' AND THE FED'S CURRENT MANDATE by RON PAUL

Over the last 100 years the Fed has had many mandates and policy changes in its pursuit of becoming the chief central economic planner for the United States. Not only has it pursued this utopian dream of planning the US economy and financing every boondoggle conceivable in the welfare/warfare state, it has become the manipulator of the premier world reserve currency. As Fed Chairman Ben Bernanke explained to me, the once profoundly successful world currency – gold – was no longer money. This meant that he believed, and the world has accepted, the fiat dollar as the most important currency of the world, and the US has the privilege and responsibility for managing it. He might even believe, along with his Fed colleagues, both past and present, that the fiat dollar will replace gold for millennia to come. I remain unconvinced. At its inception the Fed got its marching orders: to become the ultimate lender of last resort to banks and business interests. And to do that it needed an “elastic” currency. The supporters of the new central bank in 1913 were well aware that commodity money did not “stretch” enough to satisfy the politician’s appetite for welfare and war spending. A printing press and computer, along with the removal of the gold standard, would eventually provide the tools for a worldwide fiat currency. We’ve been there since 1971 and the results are not good. Many modifications of policy mandates occurred between 1913 and 1971, and the Fed continues today in a desperate effort to prevent the total unwinding and collapse of a monetary system built on sand. A storm is brewing and when it hits, it will reveal the fragility of the entire world financial system. The Fed and its friends in the financial industry are frantically hoping their next mandate or strategy for managing the system will continue to bail them out of each new crisis. The seeds were sown with the passage of the Federal Reserve Act in December 1913. The lender of last resort would target special beneficiaries with its ability to create unlimited credit. It was granted power to channel credit in a special way. Average citizens, struggling with a mortgage or a small business about to go under, were not the Fed’s concern. Commercial, agricultural, and industrial paper was to be bought when the Fed's friends were in trouble and the economy needed to be propped up. At its inception the Fed was given no permission to buy speculative financial debt or U.S. Treasury debt. It didn’t take long for Congress to amend the Federal Reserve Act to allow the purchase of US debt to finance World War I and subsequently all the many wars to follow. These changes eventually led to trillions of dollars being used in the current crisis to bail out banks and mortgage companies in over their heads with derivative speculations and worthless mortgage-backed securities. It took a while to go from a gold standard in 1913 to the unbelievable paper bailouts that occurred during the crash of 2008 and 2009. In 1979 the dual mandate was proposed by Congress to solve the problem of high inflation and high unemployment, which defied the conventional wisdom of the Phillips curve that supported the idea that inflation could be a trade-off for decreasing unemployment. The stagflation of the 1970s was an eye-opener for all the establishment and government economists. None of them had anticipated the serious financial and banking problems in the 1970s that concluded with very high interest rates. That’s when the Congress instructed the Fed to follow a “dual mandate” to achieve, through monetary manipulation, a policy of “stable prices” and “maximum employment.” The goal was to have Congress wave a wand and presto the problem would be solved, without the Fed giving up power to create money out of thin air that allows it to guarantee a bailout for its Wall Street friends and the financial markets when needed. The dual mandate was really a triple mandate. The Fed was also instructed to maintain “moderate long-term interest rates.” “Moderate” was not defined. I now have personally witnessed nominal interest rates as high as 21% and rates below 1%. Real interest rates today are actually below zero. The dual, or the triple mandate, has only compounded the problems we face today. Temporary relief was achieved in the 1980s and confidence in the dollar was restored after Volcker raised interest rates up to 21%, but structural problems remained. Nevertheless, the stock market crashed in 1987 and the Fed needed more help. President Reagan’s Executive Order 12631 created the President’s Working Group on Financial Markets, also known as the Plunge Protection Team. This Executive Order gave more power to the Federal Reserve, Treasury, Commodity Futures Trading Commission, and the Securities and Exchange Commission to come to the rescue of Wall Street if market declines got out of hand. Though their friends on Wall Street were bailed out in the 2000 and 2008 panics, this new power obviously did not create a sound economy. Secrecy was of the utmost importance to prevent the public from seeing just how this “mandate” operated and exactly who was benefiting. Since 2008 real economic growth has not returned. From the viewpoint of the central economic planners, wages aren’t going up fast enough, which is like saying the currency is not being debased rapidly enough. That’s the same explanation they give for prices not rising fast enough as measured by the government-rigged Consumer Price Index. In essence it seems like they believe that making the cost of living go up for average people is a solution to the economic crisis. Rather bizarre! The obsession now is to get price inflation up to at least a 2% level per year. The assumption is that if the Fed can get prices to rise, the economy will rebound. This too is monetary policy nonsense. If the result of a congressional mandate placed on the Fed for moderate and stable interest rates results in interest rates ranging from 0% to 21%, then believing the Fed can achieve a healthy economy by getting consumer prices to increase by 2% per year is a pie-in-the-sky dream. Money managers CAN’T do it and if they could it would achieve nothing except compounding the errors that have been driving monetary policy for a hundred years. A mandate for 2% price inflation is not only a goal for the central planners in the United States but for most central bankers worldwide. It’s interesting to note that the idea of a 2% inflation rate was conceived 25 years ago in New Zealand to curtail double-digit price inflation. The claim was made that since conditions improved in New Zealand after they lowered their inflation rate to 2% that there was something magical about it. And from this they assumed that anything lower than 2% must be a detriment and the inflation rate must be raised. Of course, the only tool central bankers have to achieve this rate is to print money and hope it flows in the direction of raising the particular prices that the Fed wants to raise. One problem is that although newly created money by central banks does inflate prices, the central planners can’t control which prices will increase or when it will happen. Instead of consumer prices rising, the price inflation may go into other areas, as determined by millions of individuals making their own choices. Today we can find very high prices for stocks, bonds, educational costs, medical care and food, yet the CPI stays under 2%. The CPI, though the Fed currently wants it to be even higher, is misreported on the low side. The Fed’s real goal is to make sure there is no opposition to the money printing press they need to run at full speed to keep the financial markets afloat. This is for the purpose of propping up in particular stock prices, debt derivatives, and bonds in order to take care of their friends on Wall Street. This “mandate” that the Fed follows, unlike others, is of their own creation. No questions are asked by the legislators, who are always in need of monetary inflation to paper over the debt run up by welfare/warfare spending. There will be a day when the obsession with the goal of zero interest rates and 2% price inflation will be laughed at by future economic historians. It will be seen as just as silly as John Law’s inflationary scheme in the 18th century for perpetual wealth for France by creating the Mississippi bubble – which ended in disaster. After a mere two years, 1719 to 1720, of runaway inflation Law was forced to leave France in disgrace. The current scenario will not be precisely the same as with this giant bubble but the consequences will very likely be much greater than that which occurred with the bursting of the Mississippi bubble. The fiat dollar standard is worldwide and nothing similar to this has ever existed before. The Fed and all the world central banks now endorse the monetary principles that motivated John Law in his goal of a new paradigm for French prosperity. His thesis was simple: first increase paper notes in order to increase the money supply in circulation. This he claimed would revitalize the finances of the French government and the French economy. His theory was no more complicated than that. This is exactly what the Federal Reserve has been attempting to do for the past six years. It has created $4 trillion of new money, and used it to buy government Treasury bills and $1.7 trillion of worthless home mortgages. Real growth and a high standard of living for a large majority of Americans have not occurred, whereas the Wall Street elite have done quite well. This has resulted in aggravating the persistent class warfare that has been going on for quite some time. The Fed has failed at following its many mandates, whether legislatively directed or spontaneously decided upon by the Fed itself – like the 2% price inflation rate. But in addition, to compound the mischief caused by distorting the much-needed market rate of interest, the Fed is much more involved than just running the printing presses. It regulates and manages the inflation tax. The Fed was the chief architect of the bailouts in 2008. It facilitates the accumulation of government debt, whether it’s to finance wars or the welfare transfer programs directed at both rich and poor. The Fed provides a backstop for the speculative derivatives dealings of the banks considered too big to fail. Together with the FDIC's insurance for bank accounts, these programs generate a huge moral hazard while the Fed obfuscates monetary and economic reality. The Federal Reserve reports that it has over 300 PhD’s on its payroll. There are hundreds more in the Federal Reserve’s District Banks and many more associated scholars under contract at many universities. The exact cost to get all this wonderful advice is unknown. The Federal Reserve on its website assures the American public that these economists “represent an exceptional diverse range of interest in specific area of expertise.” Of course this is with the exception that gold is of no interest to them in their hundreds and thousands of papers written for the Fed. This academic effort by subsidized learned professors ensures that our college graduates are well-indoctrinated in the ways of inflation and economic planning. As a consequence too, essentially all members of Congress have learned these same lessons. Fed policy is a hodgepodge of monetary mismanagement and economic interference in the marketplace. Sadly, little effort is being made to seriously consider real monetary reform, which is what we need. That will only come after a major currency crisis. I have quite frequently made the point about the error of central banks assuming that they know exactly what interest rates best serve the economy and at what rate price inflation should be. Currently the obsession with a 2% increase in the CPI per year and a zero rate of interest is rather silly. In spite of all the mandates, flip-flopping on policy, and irrational regulatory exuberance, there’s an overwhelming fear that is shared by all central bankers, on which they dwell day and night. That is the dreaded possibility of DEFLATION. A major problem is that of defining the terms commonly used. It’s hard to explain a policy dealing with deflation when Keynesians claim a falling average price level – something hard to measure – is deflation, when the Austrian free-market school describes deflation as a decrease in the money supply. The hysterical fear of deflation is because deflation is equated with the 1930s Great Depression and all central banks now are doing everything conceivable to prevent that from happening again through massive monetary inflation. Though the money supply is rapidly rising and some prices like oil are falling, we are NOT experiencing deflation. Under today’s conditions, fighting the deflation phantom only prevents the needed correction and liquidation from decades of an inflationary/mal-investment bubble economy. It is true that even though there is lots of monetary inflation being generated, much of it is not going where the planners would like it to go. Economic growth is stagnant and lots of bubbles are being formed, like in stocks, student debt, oil drilling, and others. Our economic planners don’t realize it but they are having trouble with centrally controlling individual “human action.” Real economic growth is being hindered by a rational and justified loss of confidence in planning business expansions. This is a consequence of the chaos caused by the Fed’s encouragement of over-taxation, excessive regulations, and diverting wealth away from domestic investments and instead using it in wealth-consuming and dangerous unnecessary wars overseas. Without the Fed monetizing debt, these excesses would not occur. Lessons yet to be learned: 1. Increasing money and credit by the Fed is not the same as increasing wealth. It in fact does the opposite. 2. More government spending is not equivalent to increasing wealth. 3. Liquidation of debt and correction in wages, salaries, and consumer prices is not the monster that many fear. 4. Corrections, allowed to run their course, are beneficial and should not be prolonged by bailouts with massive monetary inflation. 5. The people spending their own money is far superior to the government spending it for them. 6. Propping up stock and bond prices, the current Fed goal, is not a road to economic recovery. 7. Though bailouts help the insiders and the elite 1%, they hinder the economic recovery. 8. Production and savings should be the source of capital needed for economic growth. 9. Monetary expansion can never substitute for savings but guarantees mal–investment. 10. Market rates of interest are required to provide for the economic calculation necessary for growth and reversing an economic downturn. 11. Wars provide no solution to a recession/depression. Wars only make a country poorer while war profiteers benefit. 12. Bits of paper with ink on them or computer entries are not money – gold is. 13. Higher consumer prices per se have nothing to do with a healthy economy. 14. Lower consumer prices should be expected in a healthy economy as we experienced with computers, TVs, and cell phones. All this effort by thousands of planners in the Federal Reserve, Congress, and the bureaucracy to achieve a stable financial system and healthy economic growth has failed. It must be the case that it has all been misdirected. And just maybe a free market and a limited government philosophy are the answers for sorting it all out without the economic planners setting interest and CPI rate increases. A simpler solution to achieving a healthy economy would be to concentrate on providing a “SOUND DOLLAR” as the Founders of the country suggested. A gold dollar will always outperform a paper dollar in duration and economic performance while holding government growth in check. This is the only monetary system that protects liberty while enhancing the opportunity for peace and prosperity.

EDUCATION IS TO IMPORTANT NOT TO LEAVE TO THE MARKET PLACE by RON PAUL

This week, events around the country will highlight the importance of parental control of education as part of National School Choice Week. This year’s events should attract more attention than prior years because of the growing rebellion against centralized education sparked by the federal Common Core curriculum. The movement against Common Core has the potential to change American education. However, anti-Common Core activists must not be misled by politicians promoting “reforms” of the federal education bureaucracy, or legislation ending Common Core while leaving all other federal education programs intact. The only way to protect American children from future Common Core-like programs is to permanently padlock the Department of Education. Federal programs providing taxpayer funds to public schools give politicians and bureaucrats leverage to impose federal mandates on schools. So as long as federal education programs exist, school children will be used as guinea pigs for federal bureaucrats who think they are capable of creating a curriculum suitable for every child in the country. Supporters of federal education mandates say they are necessary to hold schools “accountable.” Of course schools should be accountable, but accountable to whom? Several studies, as well as common sense, show that greater parental control of education improves education quality. In contrast, bureaucratic control of education lowers education quality. Therefore, the key to improving education is to make schools accountable to parents, not bureaucrats. The key to restoring parental control is giving parents control of the education dollar. If parents control the education dollar, school officials will strive to meet the parents’ demand that their children receive a quality education. If the federal government controls the education dollar, schools will bow to the demands of Congress and the Department of Education. So if Congress was serious about improving education it would shut down the Department of Education. It would also shut down all other unconstitutional bureaucracies, end our interventionist foreign policy, and reform monetary policy so parents would have the resources to provide their children with an education that fits their children’s unique needs. Federal and state lawmakers must also repeal any laws that limit the education alternatives parents can choose for their children. The greater the options parents have and the greater the amount of control they exercise over education, the stronger the education system. These reforms would allow more parents access to education options such as private or religious schools, and also homeschooling. It would also expand the already growing market in homeschooling curriculums. I know a great deal about the homeschooling curriculum market, as I have my own homeschooling curriculum. The Ron Paul Curriculum provides students with a rigorous program of study in history, economics, mathematics, and the physical and natural sciences. It also provides intensive writing instruction and an opportunity for students to operate their own Internet businesses. Of course, my curriculum provides students with an introduction to the ideas of liberty, including Austrian economics. However, we do not sacrifice education quality for ideological indoctrination. It is no coincidence that as the federal role in education has increased the quality of our education system has declined. Any “reforms” to federal education programs will not fix the fundamental flaw in the centralized model of education. The only way to improve education is to shut down the Department of Education and restore control of education to those with the greatest ability and incentive to choose the type of education that best meets the needs of American children — American parents. For information about the Ron Paul Curriculum go to ronpaulcurriculum.com.

STATE OF LIBERTY 2015

THE PRESIDENT'S TAX PLAN WILL MAKE THE POOR POORER by RON PAUL

In tonight’s State of the Union message, the President will tell the American people that the rich should be taxed more to help the middle class. To do this, President Obama will raise inheritance and capital gains taxes. But in a free market, this is where investment money comes from. His tax plan will destroy capital – the life-blood of a free market. By reducing capital savings, the President’s move will place additional pressure on the Fed to create "capital" out of thin air. That means the Fed will accelerate the (virtual) printing presses and thus reduce the value of the dollar for everyone. The politicians love this approach, because they will then claim responsibility, along with the Fed, to distribute all of the newly created dollars. In the process, the market rate of interest is eliminated which is the source of mal-investment and bubbles.

IF THE FED HAS NOTHING TO HIDE, THEN IT HAS NOTHING TO FEAR by RON PAUL

Since the creation of the Federal Reserve in 1913, the dollar has lost over 97 percent of its purchasing power, the US economy has been subjected to a series of painful Federal Reserve-created recessions and depressions, and government has grown to dangerous levels thanks to the Fed’s policy of monetizing the debt. Yet the Federal Reserve still operates under a congressionally-created shroud of secrecy. No wonder almost 75 percent of the American public supports legislation to audit the Federal Reserve. The new Senate leadership has pledged to finally hold a vote on the audit bill this year, but, despite overwhelming public support, passage of this legislation is by no means assured. The reason it may be difficult to pass this bill is that the 25 percent of Americans who oppose it represent some of the most powerful interests in American politics. These interests are working behind the scenes to kill the bill or replace it with a meaningless “compromise.” This “compromise” may provide limited transparency, but it would still keep the American people from learning the full truth about the Fed’s conduct of monetary policy. Some opponents of the bill say an audit would somehow compromise the Fed’s independence. Those who make this claim cannot point to anything in the text of the bill giving Congress any new authority over the Fed’s conduct of monetary policy. More importantly, the idea that the Federal Reserve is somehow independent of political considerations is laughable. Economists often refer to the political business cycle, where the Fed adjusts its policies to help or hurt incumbent politicians. Former Federal Reserve Chairman Arthur Burns exposed the truth behind the propaganda regarding Federal Reserve independence when he said, if the chairman didn’t do what the president wanted, the Federal Reserve “would lose its independence.” Perhaps the real reason the Fed opposes an audit can be found by looking at what has been revealed about the Fed’s operations in recent years. In 2010, as part of the Dodd-Frank bill, Congress authorized a one-time audit of the Federal Reserve’s activities during the financial crisis of 2008. The audit revealed that between 2007 and 2008 the Federal Reserve loaned over $16 trillion — more than four times the annual budget of the United States — to foreign central banks and politically-influential private companies. In 2013 former Federal Reserve official Andrew Huszar publicly apologized to the American people for his role in “the greatest backdoor Wall Street bailout of all time” — the Federal Reserve’s quantitative easing program. Can anyone doubt an audit would further confirm how the Fed acts to benefit economic elites? Despite the improvements shown in the (government-manipulated) economic statistics, the average American has not benefited from the Fed’s quantitative easing program. The abysmal failure of quantitative easing in the US may be one reason Switzerland stopped pegging the value of the Swiss Franc to the Euro following reports that the European Central Bank is about to launch its own quantitative easing program. Quantitative easing is just the latest chapter in the Federal Reserve’s hundred-year history of failure. Despite this poor track record, Fed apologists still claim the American people benefit from the Federal Reserve System. But, if that were the case, why wouldn’t they welcome the opportunity to let the American people know more about monetary policy? Why is the Fed acting like it has something to hide if it has nothing to fear from an audit? The American people have suffered long enough under a monetary policy controlled by an unaccountable, secretive central bank. It is time to finally audit — and then end — the Fed.

HAVING MAJOR COMPUTER PROBLEMS

WHAT I THINK........ROBERT WENZEL

So this is what Students for Liberty has become? Three SFL activists Egle Markeviciute (Lithuania), Alexandra Ivanov (Sweden) and Irena Schneider (USA/Russia) are out with an essay at a web site they have named “I Do Not Support Ron Paul”. In the essay, they first tell us: Students For Liberty (SFL) is a big-tent organization that focuses on inclusion rather than division. But, in their view, this tent is not big enough to get Ron Paul under it: [T]he organization‘s decision to invite Ron Paul as a keynote speaker to the annual International Students For Liberty Conference (ISFLC) is upsetting for some of SFL’s counterparts in Europe. And then they pull the trigger: Despite his previous achievements, Ron Paul has been irrevocably destroying this discourse. He and his institute have crossed the line from a position of US non-intervention in international affairs to the outright promotion of tyrants and the lies they weave. By pursuing a campaign of misinformation in the name of liberty, peace and prosperity, Ron Paul is flying in the face of everything SFL stands for, undermining a movement of students fighting against brutal regimes at the risk of life and freedom. In doing so, Ron Paul is morally abetting the ratcheting repression of civilians and psychological warfare waged ruthlessly by Vladimir Putin. We strongly oppose SFL’s decision to host an advocate of Russian aggression at an event with this noble purpose. It compromises not only SFL’s mission, but the endeavours of millions of people in the world to live in freedom. Their “evidence” of this advocacy: Ron Paul and his eponymous Institute for Peace and Prosperity have been unconscionably regurgitating this propaganda, feeding Putin’s narrative that Ukraine’s revolution was a fascist coup choreographed by the US. In March of last year, Ron Paul stated that the occupation and referendum of Crimea was approved and in accordance with the will of the people. It is unclear how up-to-date , these ladies are with current events, but the Ukraine revolution was a coup, encouraged, if not outright planned by the US, That is a fact. Assistant US Secretary of State Victoria Nuland and U.S. Ambassador to the Ukraine Geoffrey Pyatt were caught on tape discussing the new Ukranian leadership before the coup actually took place. SEE: An Important Second Listen to the “F–k the EU” Ukraine Recording. Second, the people of Crimea did in fact vote to become a part of Russia and Russia did have a contract with Ukraine to maintain forces in the area. None other than NYT explained, the vote: The outcome, in a region that shares a language and centuries of history with Russia, was a foregone conclusion even before exit polls showed more than 93 percent of voters favoring secession. Here’s RT on the long history between Russia and Ukraine and dealings over Crimea: 1) A Russian naval presence in Crimea dates to 1783 when the port city of Sevastopol was founded by Russian Prince Grigory Potemkin. Crimea was part of Russia until Nikita Khruschev gave it to Ukraine in 1954. 2) In 1997, amid the wreckage of the USSR, Russia & Ukraine signed a Partition Treaty determining the fate of the military bases and vessels in Crimea. The deal sparked widespread officer ‘defections’ to Russia and was ratified by the Russian & Ukrainian parliaments in 1999. Russia received 81.7 percent of the fleet’s ships after paying the Ukrainian government US$526.5 million. 3) The deal allowed the Russian Black Sea Fleet to stay in Crimea until 2017. This was extended by another 25 years to 2042 with a 5-year extension option in 2010. 4) Moscow annually writes off $97.75 million of Kiev’s debt for the right to use Ukrainian waters and radio frequencies, and to compensate for the Black Sea Fleet’s environmental impact. 5) The Russian navy is allowed up to – 25,000 troops, – 24 artillery systems with a caliber smaller than 100 mm, – 132 armored vehicles, and – 22 military planes, on Crimean territory. Ukrainian marines look at a Russian ship floating out of the Sevastopol bay on March 4, 2014 (AFP Photo / Viktor Drachev)Ukrainian marines look at a Russian ship floating out of the Sevastopol bay on March 4, 2014 (AFP Photo / Viktor Drachev) 6) Five Russian naval units are stationed in the port city of Sevastopol, in compliance with the treaty: – The 30th Surface Ship Division formed by the 11th Antisubmarine Ship Brigade. Comprises the Black Sea Fleet’s flagship guard missile cruiser Moskva as well as Kerch, Ochakov, Smetlivy, Ladny, and Pytlivy vessels, and the 197th Landing Ship Brigade, consisting of seven large amphibious vessels; – The 41st Missile Boat Brigade includes the 166th Fast Attack Craft Division, consisting of Bora and Samum hovercrafts as well as small missile ships Mirazh and Shtil, and 295th missile Boat Division; – The 247th Separate Submarine Division, consisting of two diesel submarines – B-871 Alrosa and B-380 Svyatoy Knyaz Georgy; – The 68th Harbor Defense Ship Brigade formed by 4 vessels of the 400th Antisubmarine Ship Battalion and 418 Mine Hunting Ship Division respectively.; – The 422nd Separate Hydrographic Ship Division boasts the Cheleken, Stvor, Donuzlav and GS-402 survey vessels and hydrographic boats. 7) Russia has two airbases in Crimea, in Kacha and Gvardeysky. 8) Russian coastal forces in Ukraine consist of the 1096th Separate Anti-Aircraft Missile Regiment in Sevastopol and the 810th Marine Brigade, which hosts around 2,000 marines. 9) Russian naval units are permitted to implement security measures at their permanent post as well as during re-deployments in cooperation with Ukrainian forces, in accordance with Russia’s armed forces procedures. To somehow claim that Russia is an “aggressor,” when the majority of Crimeans are of Russian background and Russia had a legitimate agreement with Ukraine to maintain forces in the region, is quite stunning. And to do this, when the U.S. Empire is meddling. far away from its shores. on the border of Russia, suggests that this SFL Ladies Troika has an odd way of presenting current events. To be sure, no libertarian will stand in support of any measures of any government that interferes in the free exchange and actions of individuals and all governments violate the non-aggression principle to various degrees. But to stand in support of the current greatest aggressor on the planet, the US Empire, against any other country, is an outrageous position. Empires are ultimately the most dangerous and evil. To object for a great libertarian such as Ron Paul to speak, when he is merely pointing out the actions of the Empire, does not suggest a big tent philosophy. It suggests, in this case, that lady skunks have gotten in under the tent, not to expand the tent, but to spray stink on those who justifiably belong in the tent and who should honored for their advocacy of liberty and in opposition to the Empire. The question that must be asked now is: Has the empire infiltrated the International Students For Liberty, so that it has becoming nothing but another propaganda outlet for the empire? There are certainly currently some odd goings on around some “libertarian” organizations. First, there was the firing of Vacalv Klaus at the Koch-funded Cato Institute SEE: Vaclav Klaus Fired By Cato. The Klaus dismissal came after he pointed out the involvement of the Empire in the Kiev coup. And now we have this SFL Ladies Troika pissing on the great Ron Paul.

LESSONS FROM PARIS by RON PAUL

After the tragic shooting at a provocative magazine in Paris last week, I pointed out that given the foreign policy positions of France we must consider blowback as a factor. Those who do not understand blowback made the ridiculous claim that I was excusing the attack or even blaming the victims. Not at all, as I abhor the initiation of force. The police blaming victims when they search for the motive of a criminal. The mainstream media immediately decided that the shooting was an attack on free speech. Many in the US preferred this version of “they hate us because we are free,” which is the claim that President Bush made after 9/11. They expressed solidarity with the French and vowed to fight for free speech. But have these people not noticed that the First Amendment is routinely violated by the US government? President Obama has used the Espionage Act more than all previous administrations combined to silence and imprison whistleblowers. Where are the protests? Where are protesters demanding the release of John Kiriakou, who blew the whistle on the CIA use of waterboarding and other torture? The whistleblower went to prison while the torturers will not be prosecuted. No protests. If Islamic extremism is on the rise, the US and French governments are at least partly to blame. The two Paris shooters had reportedly spent the summer in Syria fighting with the rebels seeking to overthrow Syrian President Assad. They were also said to have recruited young French Muslims to go to Syria and fight Assad. But France and the United States have spent nearly four years training and equipping foreign fighters to infiltrate Syria and overthrow Assad! In other words, when it comes to Syria, the two Paris killers were on “our” side. They may have even used French or US weapons while fighting in Syria. Beginning with Afghanistan in the 1980s, the US and its allies have deliberately radicalized Muslim fighters in the hopes they would strictly fight those they are told to fight. We learned on 9/11 that sometimes they come back to fight us. The French learned the same thing last week. Will they make better decisions knowing the blowback from such risky foreign policy? It is unlikely because they refuse to consider blowback. They prefer to believe the fantasy that they attack us because they hate our freedoms, or that they cannot stand our free speech. Perhaps one way to make us all more safe is for the US and its allies to stop supporting these extremists. Another lesson from the attack is that the surveillance state that has arisen since 9/11 is very good at following, listening to, and harassing the rest of us but is not very good at stopping terrorists. We have learned that the two suspected attackers had long been under the watch of US and French intelligence services. They had reportedly been placed on the US no-fly list and at least one of them had actually been convicted in 2008 of trying to travel to Iraq to fight against the US occupation. According to CNN, the two suspects traveled to Yemen in 2011 to train with al-Qaeda. So they were individuals known to have direct terrorist associations. How many red flags is it necessary to set off before action is taken? How long did US and French intelligence know about them and do nothing, and why? Foreign policy actions have consequences. The aggressive foreign policies of the United States and its allies in the Middle East have radicalized thousands and have made us less safe. Blowback is real whether some want to recognize it or not. There are no guarantees of security, but only a policy of non-intervention can reduce the risk of another attack.

INNER CITY TURMOIL AND OTHER CRISES: MY PREDICTIONS FOR 2015 by RON PAUL

If Americans were honest with themselves they would acknowledge that the Republic is no more. We now live in a police state. If we do not recognize and resist this development, freedom and prosperity for all Americans will continue to deteriorate. All liberties in America today are under siege. It didn’t happen overnight. It took many years of neglect for our liberties to be given away so casually for a promise of security from the politicians. The tragic part is that the more security was promised — physical and economic — the less liberty was protected. With cradle-to-grave welfare protecting all citizens from any mistakes and a perpetual global war on terrorism, which a majority of Americans were convinced was absolutely necessary for our survival, our security and prosperity has been sacrificed. It was all based on lies and ignorance. Many came to believe that their best interests were served by giving up a little freedom now and then to gain a better life. The trap was set. At the beginning of a cycle that systematically undermines liberty with delusions of easy prosperity, the change may actually seem to be beneficial to a few. But to me that’s like excusing embezzlement as a road to leisure and wealth — eventually payment and punishment always come due. One cannot escape the fact that a society’s wealth cannot be sustained or increased without work and productive effort. Yes, some criminal elements can benefit for a while, but reality always sets in. Reality is now setting in for America and for that matter for most of the world. The piper will get his due even if “the children” have to suffer. The deception of promising “success” has lasted for quite a while. It was accomplished by ever-increasing taxes, deficits, borrowing, and printing press money. In the meantime the policing powers of the federal government were systematically and significantly expanded. No one cared much, as there seemed to be enough “gravy” for the rich, the poor, the politicians, and the bureaucrats. Warfare/Welfare State Requires Police Control As the size of government grew and cracks in the system became readily apparent, a federal police force was needed to regulate our lives and the economy, as well as to protect us from ourselves and make sure the redistribution of a shrinking economic pie was “fair” to all. Central economic planning requires an economic police force to monitor every transaction of all Americans. Special interests were quick to get governments to regulate everything we put in our bodies: food, medications, and even politically correct ideas. IRS employees soon needed to carry guns to maximize revenue collections. The global commitment to perpetual war, though present for decades, exploded in size and scope after 9/11. If there weren’t enough economic reasons to monitor everything we did, fanatics used the excuse of national security to condition the American people to accept total surveillance of all by the NSA, the TSA, FISA courts, the CIA, and the FBI. The people even became sympathetic to our government’s policy of torture. To keep the people obedient to statism that originated at the federal level of government, control of education was required. It is now recognized that central control of education has actually ruined education, while costs have skyrocketed. National control of medical care has brought a similar result. This has meant more money for bureaucrats, as well as drug, insurance, and health management companies, and less money for medical care. Constantly more police are required to run our lives at greater costs while providing less benefit. “Nationalizing” both medical care and education has provided a great incentive to increase the policing powers of the federal government. The predictable poverty that results from such a terrible system is now upon us and is a strong motivation for the militarization of local police as part of the expansion of the national police state. Temporary and perceived benefits of government overreach and expanded policing powers end up becoming the real problem. By the time it is understood that these “benefits” are artificial, government power and special interests have gained control of a system designed to serve them and not the people the programs were purported to help. The victims are left hanging and taught that too much freedom is the source of the problem, prompting even more support for the policing power of the state. Today the failure of central economic planning and of the US as world policeman is everywhere to be found. This is especially noticeable in the police war on the lawbreakers — real and unreal — in America. The failures of social and economic policy of the past 50 years have led to a mounting friction between the local police and the rights of the people. Local police have been militarized and have become an integral part of the national police state. A police culture that accepts the principle of initiating unjustified violence against citizens has become a serious problem. The news is constant. If it’s not Ferguson, it’s New York City. If not New York City, it’s Chicago or Detroit or Cleveland. And I believe the violence in our cities is only in its early stages. We had a taste of the conflict in the 1960s, but the fundamental values of equal justice and economic opportunity have receded further from reality. Failing to understand why the past 50 years of government expansion to eradicate poverty has only worsened the conditions of our cities will guarantee that the violent conflicts we see erupting today will only get worse. Fight for Equal Protection Distorted by 'War on Poverty' Fifty years ago, as a result of Martin Luther King Jr.’s leadership in a plea for equal justice, LBJ declared war on poverty. Poverty was seen at that time as the major contributing factor in the plight of those living in the inner city. King’s dream was to make sure all people will be judged by the “content of their character” and not by “the color of their skin.” Good advice, but it was never followed. Residual racism remains, but the excuse for every shortcoming in the failed cities is said to be due to the color of one’s skin. The very expensive war on poverty has after 50 years only made matters worse, compounding the problems of poverty and inflation while hurting most of the people the “war” was supposed to help. Currently our government spends over $1 trillion per year on anti-poverty programs. Over the past 50 years, over $16 trillion was spent, i.e., wasted. And yet poverty and dire economic conditions remain the major factor in the violence that persists, which incites or gives the police the excuse to overreact to maintain order. The plans and expectations for the war on poverty must have been seriously flawed. Although the degree of poverty is different for the various races in the United States, all categories — Asian, white, Hispanic, and black — have had a steady increase in real median income from 1964 until the year 2000, when the first of many bubbles started bursting. In all four race categories incomes are lower since then. With the economy moving into the next stage of liquidation of bad investment and debt, we should expect this trend to continue. Economic setbacks and a decrease in real income are not limited to blacks in the inner city. The setback for the young has been dramatically worse than for the older generations, aggravating the problem of violent crime in our cities. The “progress” of the early years of the war on poverty is understandable because the payment that always must be paid was delayed. The deficits and the borrowing and printing of money were unsustainable. It should not be difficult to understand that the welfare benefits, the bloated government, the excessive salaries, and the promised pensions for thousands of nonproductive bureaucrats in Detroit would lead to bankruptcy. The benefits had to be reduced. If policies don’t change and the politicians continue to be elected by wild promises, the disaster will continue. How can the provocateurs blame racism for the plight of the middle class in Detroit? We must get people to reject flawed economic policy if we want a real war on poverty. LBJ’s war on poverty was no more successful than his Vietnam War — or any war since, for that matter. A national government that can print money as needed to finance extraordinary extravagance can function longer than a city, state, or private entity, but it too must eventually “file for bankruptcy” albeit in a different fashion. As we are now seeing, the bankruptcy of a nation also involves poverty for many. This situation will continue to worsen. Since poverty is a major contributing factor to the violence of excessive police militarization, some fundamentals must be understood. The economic theories of Paul Samuelson, Paul Krugman, John Maynard Keynes, and all those who claim to know how to “regulate” the economy to benefit the poor, must be challenged and abandoned. So far reality has not yet set in. The poor grow in numbers as the middle class shrinks and the privileged class that benefits from government spending and government control of the monetary system thrives. The political demagogues and the authoritarians feed the flames of resentment that develop between the rich and the poor as class warfare and racial strife take over. They care little and understand less what liberty is all about — the more chaos there is, the more laws they seek to pass. The Victimized Inner Cities This social disruption has motivated the enthusiastic growth and militarization of our local police departments. The law and order crowd thrives on excessive laws and regulations that no US citizen can escape. The out-of-control war on drugs is the worst part, and it generates the greatest danger in poverty-ridden areas via out-of-control police. It is estimated that these conditions have generated up to 80,000 SWAT raids per year in the United States. Most are in poor neighborhoods and involve black homes and businesses being hit disproportionately. This involves a high percentage of no-knock attacks. As can be expected many totally innocent people are killed in the process. Property damage is routine and compensation is rare. The routine use of civil forfeiture of property has become an abomination, totally out of control, which significantly contributes to the chaos. It should not be a surprise to see resentment building up against the police under these conditions. The violent reaction against local merchants in retaliation for police actions further aggravates the situation —hardly a recipe for a safe neighborhood. Though poverty and excessive laws associated with the war on drugs are significant factors in the conflicts that are routine in the inner-city, the overreaction by both sides continues to make the situation much worse. As a result, policing in general is out of control, and anything suggesting racial confrontation leads to rioting, looting, and property destruction. Civil liberties are ignored by the police, and the private property of innocent bystanders is disregarded by those resenting police violence. When police overreact and unfairly enforce the law, it elicits a violent reaction from those on the receiving end. This only escalates the problem. It’s an invitation for outside provocateurs to rush in and aggravate the racial tensions — all the while never trying to understand the real reasons behind police militarization and the cause of poverty. The military-industrial complex now systematically lobbies to provide to local police departments the newest and most sophisticated weaponry — just as they sell weapons to the United States government to fight undeclared wars overseas. Drug laws are pushed by many corporate interests as well. Pharmaceutical companies, alcohol companies, and private prison systems all support of the insane war on drugs. The victims are the poor who suffer with a messed up economy and have no easy access to jobs. A natural temptation is to become a drug dealer. Violent activities arising from the drug war making drug transactions a criminal undertaking create demand in communities for strict law enforcement. Why do the race baiters have so much success in making this type of conflict a racial problem alone? Unfortunately many of them make a living off stirring up trouble. If the situation were understood in terms of police brutality and poverty, the evening news would be dramatically different. Turning it into strictly a racial conflict narrows the discussion, and the idea of responsibility for one’s action no longer needs to be discussed. The race factor seems to stir up the emotions. Mob-like responses can be achieved, which further inflames the situation. Out of control police and an entire segment of our population taught that responsibility for one’s actions is a negative are a volatile mix. Justice under the law requires that people cannot be punished or rewarded because of the color of their skin, but unfortunately King’s claim that only a person’s character counts is forgotten. The entitlement mentality is a source of much anger and misunderstanding. It leads people who see themselves as victims to one conclusion: they are entitled to be taken care of. They believe that more government transfer payments are the solution. They claim that they deserve to be taken care of and that, if they are not, there’s trouble to be had — which only opens the door to more police overreactions. There is agreement with my contention that poverty is a big problem and the source of much trouble. Therefore, it is said, someone must take care of it. If one trillion dollars per year doesn’t do the job, then make it $2 trillion. If the war on poverty’s $16 trillion hasn’t worked, make it $32 trillion. This sentiment reflects the entitlement mentality that has taught many that some people have a “right” to government handouts and that the rich must pay. This is an idea that is deeply flawed, and it stirs up class warfare on top of racial animosities and police brutality. The blanket demand that all wealthy individuals owe support to the poor through government welfare programs is not an example of equal justice under the law. It is an example of egalitarianism gone awry. Welfare, which is the use of force to transfer wealth from one group to another, is based on a moral principle of equality that in fact is not moral and does not work. The wealthy special interests, such as banks, the military-industrial complex, the medical industry, the drug industry, and many other corporatists, quickly gain control of the system. Crumbs may be thrown to the poor, but the principle of wealth transfer is hijacked and used for corporate and foreign welfare instead of wealth transfers to the poor. Many people do indeed gain wealth unfairly with today’s system, which adds to the envy shared by many and especially the poor. But this is a problem that is not solved by indiscriminately placing blame on successful businesses. The result would be the country and the whole world becoming poorer while resentment rises. Honest profits of successful entrepreneurs are quite different than profits of the corporate elite who gain control of the government and, as a consequence, accumulate obscene wealth by “robbing” the middle class. To blame and destroy those who make an honest living by satisfying consumers without the use of special benefits from the government is destructive to liberty and wealth. Reforms that are driven by envy of successful people making an honest living will not address the problem of poverty. Poverty is actually made worse by an aggressive sense of victimization. Many factors are involved in the crisis of our cities, including the following: Police brutality, militarization of the police, excessive laws, courts and law enforcement efforts ignoring the principles of equal justice, Racism that exists to some degree on both sides of the conflict, Rampant crime reflecting structural poverty, Absence of an understanding of the difference between earned and stolen wealth, Race baiting, The entitlement mentality, self-reliance not being a goal for many, and the breakdown of the family unit, The war on drugs, and The lack of economic understanding regarding the Federal Reserve, taxes, welfare, economic consequences of constant war, deficits, and excessive government spending. True satisfaction comes from productive effort and self-reliance and not from a government transferring wealth in an effort to bring about an egalitarian society. The absence of an understanding of the nonaggression principle makes it difficult for positive reforms to develop. Unfortunately hypocrisy has come to equal “common sense.” Placing confidence in people who thrive on wielding government power and who spend a lifetime using it to benefit special interests is not a wise policy. The people have too little confidence that most problems can be solved in a voluntary manner in a society that cherishes civil liberties. There’s never an admission that government problem-solving doesn’t work. Government-created problems are a road to poverty and resentment. Too many people believe that “free stuff” from the government can solve our problems. They mistakenly believe that deficits don’t matter and that wealth can come from a printing press. The recent high profile episodes of racial conflict involving police killings and the violence in some neighborhoods have been a fertile environment for the demagogues and those who thrive on racial conflict. Some have suggested that sensitivity training for all police personnel should be required, to teach proper ways to deal with the public. Though there’s a lot of extenuating circumstances that provoke overreaction by the police, I’m not optimistic that the problem will be helped much by sensitivity training. Retraining the police won’t touch the complex problems that pit the police against the victims of complex social conditions generated by hate, violence and bad economic policies. The high profile episodes of police violence and overreaction are a consequence of conditions that in many ways were generated by government policy. If social engineering intended to produce economic equality fails, more of the same cannot possibly be the solution. Seeking and promoting equal justice has nothing to do with welfare redistribution. On the contrary: equal justice requires the end of welfare redistribution. Redistribution is a process that is always destined to help a small minority, whether in an economy like ours that endorses central economic planning or in one run by radical fascists or communists. While advocates claim that it’s the duty of government to pursue economic equality, all efforts fail to achieve that goal, while gutting the principle of equal justice. The Rich Are Getting Richer, But Why? Under an authoritarian regime, those in power take care of themselves. This always leads to poverty and discrepancy in wealth distribution. Eventually the social strife that is predictable leads to an overthrow of the government. The Soviet communist leaders never suffered from want, but even they were routed when the people in the Soviet system decided that they had had enough. We must realize that we are not exempt from a breakdown of our system. The strife that we are witnessing is a reflection of a growing number of people who are recognizing the discrepancy between rich and poor, the weak and the powerful, Wall Street and Main Street. The courts are obviously failing at meting out justice fairly and impartially. Money and race have a lot to do with how arrests, convictions, and incarcerations are carried out. That provides motivation for some people to become angry and violently strike out against anyone who appears to have more than they do. While the courts fail to follow the rules of equal justice, those who react violently believe that attacking almost anyone is justifiable in seeking what they claim is justice. Talk of the 99 percent and one percent is not just sloganeering. It reveals a problem generated by government and a situation in which some people believe that they have a “right” to be taken care of rather than just a right to live in a free and just society where all persons are treated equally under the law. Indeed the rich are getting richer and the poor poorer. The extreme current inequality is not a consequence of free markets and true liberty. Rather it results from the welfare state that, as always, morphs into a system that provides excesses for the powerful few. Better management of the welfare system does not help. That only changes the types of authoritarians in charge. Both political parties are financed by Wall Street, the big banks, and the military-industrial complex. Getting rich by being part of the government class is the problem. Wealth achieved by hard work is quite a bit different. Opening the door to this opportunity is achievable by following the principle of life, liberty, and property. The economic interventionist system under which we live today rewards those who benefit from government economic planning by the Federal Reserve, access to government contracts, and targeted special regulations to help one group over the other. The insiders benefit during the bubble phase of the business cycle and are the first ones in line for the bailouts. The poor, for whom welfare is supposedly designed to help and for whom the politicians justify the spending, end up with the crumbs while the Wall Street/banking elites thrive in good times and bad. There are two problems. First is conceding the principle that government has the moral authority to redistribute wealth. Second is believing the redistribution will be managed wisely and without corruption. All government management ends up being unwise, corrupt, and wasteful. The money interests inevitably prevail. Belief that “good” bureaucrats and politicians can be found to manage the economy and achieve equity in distribution is a dream that always ends up a nightmare. To make even a modest attempt at this goal requires government to use aggression against one group for the benefit of another. This authority must be denied to government. We must limit the government’s role to protecting equal justice in defense of life, liberty, and property. Currently the political system in America and in most of the rest of the world is not motivated to seek this limited goal for government. Thus the move toward unfair concentration of wealth in the few and a dramatic increase in the number of people living in poverty as the middle class shrinks. Since there is little understanding of the economic system that is a major contributing factor to the economic problems, it can be expected to exacerbate social and class conflict. The killing of Michael Brown in Ferguson plus many similar incidents are signs of a serious economic and political crisis that is not limited to police brutality and runaway violence. Police brutality and militarization may well induce a violent event far beyond what we have seen in Ferguson. It also can serve as an excuse. But it is not the root cause of turmoil. The real cause is poverty, the entitlement mentality, and the breakdown of the rule of law. Moral decay and the national police state are the real culprits. More police with improved training will not do much to deal with this growing conflict. Bowing to entitlement demands from the “victims” will not be helpful in a bankrupt system. We have too many police, too many laws, and too much exemption of government officials from the crimes they commit. Both adding police and increasing entitlements involve expanding the role of government in an effort to solve problems that too much government has already caused. Government can only be expanded by diminishing the people’s liberty. This problem can only be ended by maximizing liberty and getting people to realize that self-reliance, hard work, and the absence of coercive force by individuals and government is the only way to reverse the downward trend from which we are suffering. The battle will no longer be to get the government to pick sides in a conflict between rich and poor, black and white, young and old, or the lawless police versus the lawless demands of entitlement recipients demanding their “fair share.” There has to be an understanding that productive effort and self-reliance on the part of everyone is required for a free society to thrive. Our Liberties Under Attack The economic and moral decay of American society is reflected in the loss of liberties. This problem affects all Americans and not just the poor in the inner city. Gradual erosion of personal and economic liberty has proceeded for a century. The loss of our liberty has sharply accelerated since the 9/11 attacks. We have done to ourselves what no foreign enemy could have possibly accomplished. Government surveillance provides the state with information that enables it to know our every move. The protection of the Fourth Amendment is gone. Many Americans are comfortable with the sacrifice of liberty for safety and accept the notion that government’s key responsibility is to keep us safe. It’s a nice dream but the truth is it can’t do it. One thing for sure: if it tries, it will do so at the expense of liberty. Welfare, for the rich or poor, cannot exist without the sacrifice of the principal of property ownership. Though it always starts small and justified for the “needy,” the principle of wealth transfer incentivizes the special interests and the rich to obtain benefit at the expense of the poor. This occurs in all societies and inevitably grows to a point where the production of wealth is diminished and the system collapses. This is what we are witnessing today. The growth of the state necessitates government surveillance of all our financial transactions to enhance the collection of tax revenues. Because there is never enough money for the “do-gooders,” the tactics of the tax collectors have become more vicious. Violation of our liberties is excused by the majority in order to ensure that all people “pay their fair share.” When conditions deteriorate, capital controls are imposed to prevent moving assets out of the country. Our monstrous tax code reflects the hundred-years development of our income tax system and is one of the greatest invitations for our “caring” government to pursue the impossible goal of the fair distribution of all wealth. The vicious drug war, which dates from the early 1970s, provides another excuse for knowing everything about everybody at all times. Its selling point is to keep people safe from themselves. Pursuing this principle guarantees that liberty will be decimated in the process. It invites the government’s interference in our spiritual and intellectual well-being. What one reads and believes becomes of interest to the manipulators who want to care for us for our own good. And they never rest from seeking this goal. This concession to the state invites controls on everything we put into our bodies: what we eat, drink, or inhale. It takes a lot of bureaucrats, politicians, and money to manage the process. The people, we have been told, are “too stupid” to make their own decisions about their own lives. We are to believe that politicians who invite themselves to rule over us are all-wise and that we should be thankful to sacrifice our liberty for this “service.” Authoritarians actually believe that we should be grateful to them for all the good things that they do for us. We must remember that if the people don’t rebel against a police state it only grows in size and becomes more ruthless. In addition to all these trends — which includes the federal government monopolizing and administering medical care and education — government surveillance becomes the darling of the gurus who love the technology that allows the government to know our every move, every day, without limits. With the disaster of 9/11, an existing acceptance of government monitoring, along with technological advances, helped allow a new age to be ushered in that makes the horrors of George Orwell’s 1984 look less threatening by comparison. The Federal Government’s War on Us Tolerance is a favorable trait when it means acting without aggression toward others, but tolerance of the monster that has evolved in our government is not good. Instead of adding more government agencies to spy on the American people, we should be talking about eliminating the ones we have, at a cost the American taxpayers of over $80 billion per year. We have lived with the global war on terrorism for over 13 years now, and the threat of terrorist attacks against Americans and American allies is worse than ever. Though a global threat exists, the greatest dangers for American citizens here at home have been caused by our own government. Our government’s attacks on our liberties have been overwhelming and worse than anything any foreign power has ever done. It’s the federal government that leads the charge in all our domestic wars, which, in addition to the global war on terrorism, include the war on drugs, taxpayers, and poverty, all of which contribute to the constant war on our privacy. Today every American is a suspect. Our president has established a policy that an American citizen can be assassinated without even being charged with a crime. The national police are made up of over 100,000 bureaucrats and police officials who carry guns to enforce federal law on the American citizens. The Founders and our Constitution intended that policing powers would be the responsibility of the individual states. That was forgotten a long time ago. Not only do employees of agencies like the CIA, FBI, and BATF carry guns, employees of OSHA, EPA, Fish and Wildlife, and many other agencies enforcing regulations do so as well. The notion of total homeland security being provided by a heavily armed Department of Homeland Security was foreign to America up until just recently. Today, whether it’s riots in our cities or chaos after a national disaster like a hurricane, the Feds are there taking charge over all local officials and property owners, . It shouldn’t surprise us that our local police departments have become an arm of a runaway federal police mentality that mimics an army. The Founders did not even want a standing army. They wanted only a militia. Today we endure, at the expense of our liberties, a national police force armed like an invading military force. We are destined to see a continued escalation of violence in our cities as the internal conflicts grow. Instead of the police quelling the violence, they unfortunately have become part of it. It’s evident we have a national police force harassing the people and failing to protect liberty and property. It fails to quell riots while. Too often it incites them. We are also stuck with a huge “standing” army, marching around the world and engaged to some degree in over 150 countries, “making the world safe for democracy” and serving as a private police force for American corporations overseas. The US Empire: Who Does it Serve? When Obama announced a shift in geopolitical interest to the Far East —– to keep an eye on China —– one TV anchor pointed out that the move seems quite logical since we have a lot of “business interests” in the region. It is, in fact, far from logical if one looks at the tragic mess US government interventionism has caused in the Middle East and the conflict the US government is stirring up with Russia over Ukraine. Old-fashioned colonialism was deemed necessary by various European powers to secure natural resources along with control over sea lanes and markets for selling manufactured goods. European-style colonialism — supporting a mercantilistic economy — came to be seen as politically unrealistic and unnecessary. When free-trade principles were utilized, colonialism did not die; it only changed form. Mercantilism in various forms and degrees drove trade policies of nations with strong economies and militaries. Though the United States is the world’s military powerhouse, controls the oceans and airspace, and has a presence in the four corners of the earth, few people refer to America as a colonial power. But in many ways it is, which has prompted our interests in oil and mineral rich countries. We are frequently involved in choosing the “elected” leaders, as well as hand-picking dictators, in many countries as well. This is not exactly what the Founders had advised. International militarization of our policies is just as dangerous to our liberties and economy as is the domestic policy that drives our authoritarian governments to regulate our every move. We are now subject to an out-of-control domestic police force while the US military maintains our Empire overseas. The “one percenters,” generally speaking, are internationalists who are not champions of individual liberty and free trade. They are supporters of managed trade and international institutions like the WTO where the interests of the one percent can influence the rulings that frequently have little to do with advancing advertised goals of low tariffs and free trade. The international monetary system is a powerful tool for the select few. Easy credit, government guarantees, and generous contracts are a great benefit to those in charge. Non-compliant nations, or any country that is deemed unfriendly, can be punished with severe sanctions without moral or economic justification. US corporations benefit from our military presence worldwide. The military-industrial complex profits not only by selling weapons to the US government, but also by being the world’s chief arms provider. It is a fact that many weapons we send into areas such as Iraq, Afghanistan, and Syria frequently end up in the hands of our enemies. ISIS obtaining US weapons led to the US military then taking action to destroy the weapons. The military-industrial complex is immediately available to replace the weapons while earning generous profits. This is great if you happen to be an insider manufacturing or selling these weapons. It is quite a lucrative business, all at the expense of the American taxpayer. The United States military presence around the world provides a “private” police force to protect US and other international companies against any local resistance or leaders that turn unfriendly. Our military presence overseas has nothing to do with protecting our freedoms and defending our Constitution. Those are lies and are used for the purpose of gaining the support of the American people for wars that should never have been fought. After long periods of tragic losses and expense, the American people generally wake up and realize what has happened. But what we need to do is wake the American people up earlier and get them to realize that the resistance has to be heard from the people when the government is preparing for war, not after the war has begun or even ended. Military personnel are idolized, and, if any one raises a question on whether or not all soldiers are universally “heroes,” that person is accused of being unpatriotic, un-American, and unsupportive of the troops. In fact, the real heroes are the ones who expose the truth and refuse to fight foreign wars for the international corporations. Disengaging our troops from around the world and refusing to defend American neocolonialism is pursuing a course compatible with the qualities that Americans claim to stand for. Liberty at home is never enhanced by war abroad. Preemptive wars are especially antagonistic to the goals of peace, commerce, and honest friendship. War “is the health of the state,” it has been said, and the state is the enemy of liberty. Wars overseas justify the wars at home against the American people. It is expected that liberties will be sacrificed when a country is at war. Pro-war neoconservatives are blatantly honest by arguing that for freedom to exist the sacrifice of liberty is required. This admission is truly discouraging. It hardly makes sense that voluntarily sacrificing liberty is worthwhile, if the goal is to preserve liberty. Time is short to reverse this trend. Not only are our policies destructive to liberty, the economic costs are prohibitive. So far the bills have not been paid, but they are rapidly coming due. Both the deeply flawed policy of military interventionism abroad and the failed errors of central economic planning at home are now threatening our liberties and our general welfare. The recent breakout of violence in our cities between police on one side and people who have been thrust into the stagnation of poverty as a consequence of bad government social and economic policy on the other side should not be a mystery if one could see the forest for the trees. Economic problems are “blowback” and unintended consequences of well-meaning welfare programs that have been usurped by the powerful special interests demanding benefits off the top. Yes, it’s tempting to believe the falsehoods of economists who claim that transferring wealth for fairness sake is beneficial, but history shows that it never works. The same humanitarians argue that all spending is crucial and beneficial, deficits don’t matter, borrowing is good, and taxing is the equalizer. If government still comes up short they say just turn on the printing presses. That is the philosophy we have been living with for 85 years, and the evidence is now in. It is clear to most Americans that these policies have not worked. Yet they are not ready to concede that it is less government and more freedom that is the solution. The obsession with continuing all the same policies has increased our poverty, increased violence between the classes, and lowered the standard of living for all except the elite one percent. And worst of all, the sacrifice of liberty was for naught. Losing both liberty and the right to truly own property undermines the ability to create wealth. When this process gets out-of-control the economy goes into a death spiral, in the beginning of which we currently find ourselves. Without a correction to the basic understanding of the proper role of government, the downward spiral will continue. Blowback All Around: We Are Less Safe Economic blowback and unintended consequences is one thing, but blowback from our needless and aggressive policies around the world is another, and every bit as dangerous. As we find ourselves increasingly engaged economically and militarily around the world, we can expect many more attacks on American interests. With so many military personnel abroad, they will be the easiest targets to be hit. But attacks similar in nature to the 9/11 attacks will remain a threat to our homeland. We will not be attacked because we are free and rich. The attacks will come from angry people who have had friends and relatives killed by America’s careless and often vicious use of our military force in their countries. It is not that difficult to feel resentment against a country that comes thousands of miles from home and bombs, invades, and punishes with sanctions, other countries that have never initiated force against it. As long as our foreign policy remains the same we can expect serious blowback attacks — and for them to increase in number as our prowess is diminished. Economic factors will determine this, and the loss of dollar hegemony will aggravate the situation. The US government’s foolishness in foreign affairs has plagued us for 100 years. The escalation of our presence around the world since 9/11 continues. It is a policy “bubble” of gigantic proportions. This “bubble” of intervention is about to burst. Any serious look at our last 13 years of intervention around the world should convince all skeptics of how foolish, dangerous, and expensive it has been. The US operates with an attitude that it has the power and therefore the responsibility to be involved in deciding almost every foreign leader, whether elected or appointed as a dictator. We have been engaged in picking and financing political factions in revolts in countries including Egypt, Libya, Pakistan, Yemen, Afghanistan, Iraq, Kurdistan, Syria, Ukraine, Somalia, Nigeria, the Philippines, Liberia, Georgia, Haiti, and Lebanon. These involvements impose a huge tax and inflation burden on the American people. Trillions of dollars have been spent, and the debt continues to mount. The abject failure of our efforts in Iraq and Afghanistan elicits a loud call from the neoconservatives for more money, troops, weapons, and bombs, with zero hope of a successful mission. ISIS, now considered our greatest threat, is not even a country, but our occupation and destruction in the region motivates even a ragtag bunch to expel foreign forces from their homeland. ISIS has rallied enormous support and resources to undermine our allies in the region. That assessment is difficult, of course, since it’s hard for anyone to identify exactly who our allies are and distinguish them from our avowed enemies. US foreign policy has helped create the disastrous situation in Syria. We declared that Syrian leader Bashar al-Assad had to go. We supported rebel factions. We armed them. They turned on us and used their American weapons against us with an amazing resistance headed by the ruthless ISIS, an outgrowth of al-Qaeda. It’s quite an irony that ISIS is well entrenched in northern Iraq, since before we decided to invade Iraq and kill Saddam Hussein no al-Qaeda were present in Iraq. Now the neocons are getting their way and American forces are returning with reinforcements and weapons to save Baghdad from the jihadists. No one can make this stuff up. It’s too bizarre for fiction. Unfortunately, with the help of the media and our government, the American people have remained oblivious to the stupidity of our policies of the past 13 years. A day will come though when the full cost of this policy is dumped on the American people. Then they will get the message. Then it will be too late to gracefully exit and restore sanity without cataclysmic changes being forced on us. The major challenge will be the survival of our liberties. What to expect in 2015? Foreign Affairs More American troops will be sent overseas to places like Iraq, Afghanistan, Syria, and Ukraine. There will be no military victories to brag about. More American military personnel will be killed in 2015 than in 2014. Military contractors will be used in growing numbers and their casualties will not be counted as military casualties. The Ukraine civil war will not end, and the United States will be further bogged down in this conflict. Relations with Russia will continue to deteriorate. The neocons in Congress will gain even more influence over our foreign policy. Punishing sanctions will continue to be made more severe and push Russia further into China’s sphere of influence. Gold will gain credibility as we isolate the Russians from the financial markets. Sanctions on Russia will alienate Europe against the United States. The British oil industry will suffer from the “conspiracy” of the US and Saudi Arabia to drive oil prices down to punish Russia. The military-industrial complex will continue to thrive and make even more money with the greater influence of the neocons in the new Congress. Supplemental budgets for the military should be expected, along with covert assistance and additional foreign aid to finance the management of our Empire. Our enemies’ strength will grow and prompt even more abuse of American citizens’ privacy and free expression. We should not be surprised if there is a reigniting of the conflict in the Balkans. The first of the color revolutions in 2000 in Serbia can hardly be claimed a permanent victory. Generally, bombs from outsiders don’t solve internal problems. Those problems must eventually be solved from within a country rather than from outside interference. The US and NATO announced that the 13 year war in Afghanistan has ended. There has been neither the pretense of "Mission Accomplished" nor an admission of outright failure, along with an exodus. In reality the war has not ended and instead will continue for a long time. No victory for US policy is possible. The conflict will actually spread and increase in intensity since our goals are undefinable and therefore the war is un-winnable. Sanity will not return to US leaders until our financial system collapses — an event for which they are feverishly working Domestic issues An honest assessment of the economy will not reveal any significant improvement in 2015. Inflation will continue to plague us, possibly even with the government-rigged CPI figures showing an increase. But the true inflation of the Fed’s credit creation, as well as the subsequent mal- investment and the various bubbles bursting will accelerate. Debt in all categories will continue to increase at unsustainable rates. The Fed will not permit interest rates to rise — at least on purpose. Eventually the market will demand that rates do rise, however. Tax revenues will continue to rise, aiding the policy of the government spending the people’s money rather than those who earned it. Regulations, even with (or maybe especially with) a Republican Congress will continue to increase and make the Federal Register more incomprehensible. Friction between the middle class and the one percent, many of whom are living off government privileges, will escalate further and be reflected in confrontations especially in the large cities. Financial currency controls will continue to expand especially with cross-border transactions. Blowback and unintended consequences from our sanctions and foreign policy in general will continue to threaten our domestic security and our economy, as well as our liberties. Relations with Cuba will be improved with the president’s effort to resume diplomatic relations, but the radicals and isolationists who oppose free trade will place roadblocks in the way and slow the process. A major geopolitical or economic event, greater than the crisis of 2008, is fast approaching. The precipitating event will be a surprise to the majority of politicians and economists. There are many “next shoe to drop” possibilities, and one could happen any time or any place. Wall Street will be protected, and the trillions of dollars of big banks derivatives will be absorbed by the Fed, the FDIC, and ultimately by the American taxpayers in the next financial crisis. There’s no doubt the poor will get poorer and the rich richer until the spirit of revolution in the people calls a halt to the systematic destruction of freedom in America. Conclusion: Toward a Peaceful Revolution Authoritarianism has overtaken our economic system as the welfare mentality takes over at every level of government. Once the initiation of force by government is accepted by the people, even minimally, it escalates and involves every aspect of society. The only question that remains is just who gets to wield the power to distribute the largess to their friends and chosen beneficiaries. It’s a recipe for steady growth of the government at the expense of liberties, even if official documents and laws written to limit government power are in place. Planting even small seeds of monopoly power in the hands of a few people in government, whether democratically elected or not, will always metastasize like a cancer. This was Jefferson’s concern when he advised that “[t]he tree of liberty must be refreshed from time to time.” He believed the people must warn the rulers that taking up arms against the government is legitimate if the government fails to protect the people’s liberty. This should be a consideration. But if the spirit of liberty is not alive and well in the hearts and minds of the people, violence alone against the government will not be a solution. History has shown that, more often than not, people who rebel against abusive governments, whether run by kings or modern day dictators, do not gain much — overthrowing one dictator and replacing him with another just as bad. A clear understanding of the nature and source of liberty is required for revolutions to be beneficial. Restraining the few who thrive on the use of force to rule over us is the challenge. Fortunately they are outnumbered by those who would choose liberty yet lack the will to challenge the humanitarian monsters who gain support from naive and apathetic citizens. All positive revolutions must be philosophic in nature to make a difference. Violence alone achieves nothing. Before we can actually restore our liberties, we most likely will have to become a lot less free and much poorer. This is sad since correct and workable answers are available to us if only the people understood them and demanded liberty and honesty, rather than being dependent on excessive government power and believing the false promises of politicians. Even with the problems we face today and the bleak outlook for the coming year there’s much to encourage us. During this next year there will be the continuation of many more people recognizing the failure of government to create peace and prosperity. More widespread understanding of this truth is required in order to bring about a successful revolution. The freedom movement, especially with many young people involved, will grow in numbers and influence. Current monetary policy and the Federal Reserve will continue to lose credibility, especially with the next bailout. Although “too big to fail” will stay in place, it will further alienate Main Street America causing it to rebel against the system. The real problem of course is that too many “stupid people” are IN our government and have high visibility on the major TV networks. There will be plenty of people, not officially associated with government, who will rebel against various governments around the world. The sentiments supporting secession, jury nullification, nullification of federal laws by state legislatures, and a drive for more independence from larger governments will continue. We should not be discouraged. Enlightenment is not nearly as difficult to achieve as it was before the breakthrough with Internet communications occurred. Besides we must remember that “an idea whose time has come” cannot be stopped by armies, demagogues, politicians, or even Fox News or MSNBC. The time has come for the ideas of liberty to prevail. I smell progress. Let’s make 2015 a fun year for LIBERTY.

TEN NEW YEAR'S RESOLUTIONS FOR CONGRESS.by RON PAUL

Since New Year’s is traditionally a time for resolutions, and since the new Congress convenes this week, I thought I would suggest some New Year’s resolutions for Congress:

1) Bring the troops home — Congress should take the first, and most important, step toward ending our hyper-interventionist foreign policy by bringing our troops home and closing all overseas military facilities. The American people can no longer afford to bear the cost of empire.

2) Pass the Audit the Fed bill — The American people deserve to know the entire truth about how the Federal Reserve’s monetary policy benefits big-spending politicians and financial elites while harming average Americans.

3) Repeal the PATRIOT Act and rein in the National Security Agency — It is approaching two years since Edward Snowden revealed the extent of the NSA’s unconstitutional spying. Yet Congress still refuses to put a leash on the surveillance state. Congress should take the first step toward restoring respect for the Fourth Amendment by allowing Section 215 of the PATRIOT Act to expire.

4) Shut down the Transportation Security Administration — Treating all American air travelers as criminal suspects and subjecting them to intrusive and humiliating searches does nothing to enhance our security. Congress should shut down TSA and return responsibility for airline security to the airlines. Private businesses can effectively protect their customers and employees if the government gets out of the way.

5) End all corporate welfare — Federal programs that provide subsidies or other special benefits to politically-connected businesses cause economic inequality, distort the market, and waste taxpayer money. It also makes political and moral sense to cut welfare for the rich before cutting welfare for the poor. Congress should start dismantling the corporate welfare state by killing the Export-Import Bank and the Overseas Private Investment Corporation. Congress should also reject legislation proposed to benefit one industry or individual, such as Sheldon Adelson’s Internet gambling ban.

6) Repeal and Replace Obamacare — Many Americans are losing their insurance while others are facing increasing health care costs because of Obamacare. Repealing Obamacare is only a first step. Congress should both repeal all federal policies that distort the health care market and restore a true free market in health care.

7) End police militarization — The killing of Michael Brown in Ferguson, Missouri in August brought the issue of police militarization to the center of national debate. Congress must end all federal programs that provide military equipment to local police forces.

8) Shut down the Department of Education — It is no coincidence that education in America has declined as federal control over education has increased. Congress should de-fund all federal education programs and return control over education to local communities and parents.

9) Allow individuals to opt out — A positive step toward restoring a free society would be allowing individuals to opt out of Obamacare and other federal mandates. Young people should also be granted the ability to opt out of paying Social Security and Medicare taxes in exchange for agreeing to never accept Social Security and Medicare benefits.

10) Allow state governments to opt out — If Congress lacks the votes to end the war on drugs, repeal Obamacare, or roll back other unconstitutional federal programs, it should at least respect the rights of states to set their own policies in these areas. Federal prohibition of state laws nullifying Obamacare or legalizing marijuana turns the Tenth Amendment upside down.

By adopting these resolutions, Congress can make 2015 the year America begins reversing the long, slow slide toward authoritarianism, empire, national bankruptcy, and economic decline.