Ron Paul Slugs At The Fed One More Time

Wolf Richter's picture

Wolf Richter

You just have to admire Ron Paul for his tenacity and non-flip-flopping straightforwardness—a breath of fresh air in the putrid morass of Washington—even if you disagree with his policies. And while he still can, before retiring from Congress, he is slugging at the Fed again. This time, as Chairman of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology. The committee, which has oversight authority over the Fed, will convene on Tuesday to weigh six bills to “Reform or Abolish” the Federal Reserve, including his Federal Reserve Board Abolition Act. From the press release:

"More and more people are beginning to understand just how destructive the Federal Reserve’s monetary policy has been. I hope that this hearing will kick start a serious discussion on the need to rein in the Fed,” said Chairman Paul. “100 years is far too long for Congress to have taken a hands-off approach. The Fed continues to reward Wall Street banks while destroying the dollar’s purchasing power and driving up the cost of living for average Americans. This reckless behavior must come to an end."

While his efforts to abolish the Fed have been fruitless, he scored a huge victory—after years of trying, and being shunted aside by members of Congress—when his legislation to slap the Fed with an audit was included in the Dodd-Frank Act. It made possible not just one but two audits of the Federal Reserve System by the Government Accountability Office (GAO). Though limited in scope, they nevertheless allowed a few rays of sunshine to pierce the Fed’s plantation shutters and illuminate some of the shenanigans, including octopus-like conflicts of interests that twisted their arms around everything during the multi-trillion-dollar bailout mania between 2007 and 2009. For some gory details, read.... The GAO Audit of the Fed Doesn’t Call It ‘Corruption’ but it should.

Rep. Paul’s Federal Reserve Board Abolition Act might once again rev up the debate, but it is doomed in Congress—because Congress is addicted to the crack cocaine of deficit spending, and only the Fed’s printing press can make sure that there are no Greece-like funding disruptions. Last year was a great example because of the silly gyrations lawmakers performed publicly in trying to cut the deficit via the infamous Supercommittee—where spending cuts went to die. And the agreed-to “automatic” spending cuts will be modified away before they kick in. So, outlays in fiscal 2011 rose by 4.2% to $3.6 trillion, of which a sickening 38% was paid for with borrowed money ... which, as of May 3, per the Treasury’s “Debt to the Penny,” amounted to 15,671,202,480,642 dollars and, indeed, ninety-eight cents.

At the rate Congress is shoveling moolah out the door, the national debt will balloon to $16 trillion in a few months. There are no guarantees that credit markets would be able or willing to digest that kind of onslaught, at least not at the current below-inflation and highly unappetizing yields. A debt crisis of epic proportions would practically be a certainty—if it weren’t for the Fed’s miraculous money machine whose humming and rattling we hear every day.

But we have to be sympathetic to lawmakers and their plight. They’re caught in a vice between raising taxes and cutting outlays—we can’t really talk about “cutting the budget” because Congress hasn’t passed a budget in years but instead lumbers from continuing resolution to continuing resolution.

Cutting outlays—ironically, even a micro-step towards living within one’s means is called “austerity” these days—would scoop money out of the big trough that is feeding just about everybody and everything in the US and often overseas: retirees, Big Oil, museums, Solyndra, defense contractors, GM, GE, non-profits, government agencies (useful or not), the rich, the poor, etc. And they’re all screaming for more. A very painful situation for lawmakers, whose ears can only take so much, and whose jobs depend on doling out money. And raising taxes? Deafening cacophony. Lawmakers have millions of reasons not to venture into that thorny thicket.

Instead, the Fed makes sure the money is there. Thus, campaigns can go on unperturbed, while the future of America is threatened by huge deficits and a gross national debt that will reach 120% of GDP possibly by 2014—a level that Italy is struggling with today. The Fed’s near-zero interest rate policy and monetization of the deficit shield Congress from the harsh but medicinal discipline of the markets—a medicine Congress fears more than anything else. And so, lawmakers will brush off Ron Paul’s efforts to slug at the Fed one more time, before he retires.

Here is an insanely awesome and hilarious cartoon by Ben Garrison on how Ron Paul is shedding light on the horrid creatures “underneath” the Fed.

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cfosnock's picture

I'm not sure about Ron Paul anymore. I like the fact that he made the mint sell us silver at close to spot price, but besides that he really has done nothing. The audits were watered down. What makes me think he might be  the controlled opposition is that he grills Bernanke about trivial stuff like "do you think Gold is money" it makes for nice sound bites but does not accomplish anything. I'm probably going to get slaughter for this post but wanted to know if anyone else thought the same way.

Half_A_Billion_Hollow_Points's picture

The troops are with Ron Paul, you piece of shit.  


When the zombie outbreaks start, you bet there will be snipers protecting us from the Keynesians and the Orwellians.  

cfosnock's picture

Oh well no reply...Half_A_Billion I have no idea what your talking about and not sure why you used profanity

Sathington Willougby's picture

End the fed and unthaw Hans Solo!

thurstjo63's picture

Wolf, What is striking is that you don't seem to understand that government spending money is the most inefficient thing that can be done and creates no wealth whatsoever. If we pulled the plug on all of these daft government programs, lived within our means and allowed for competition, what would happen is that, after an initial drop for 6-9 months (which would be painful but hardly more painful of 4 years + of continued pain) where unemployment would spike, prices would depreciate (due primarly to the drop in government driven demand), the enconomy would explode as the many geriatric industries in the US (i.e. telecommunications, healthcare, utilties, etc) would suddenly have competition that would blow many of them off the planet and open up far more possibilities for individuals in a number of new areas. You keep worrying about a drop in government spending as though real economic activity is somehow tied to it when it is not.

Bro of the Sorrowful Figure's picture

is it bad if ive been having wet dreams in which Dr. RP shoves gold bars up bernanke's ass? 

MFL8240's picture

One way to get rid of Fed and Geithner and imprisson Rubin, Greenspan, Bernanke et al.  just check Fort Knox and if Gold gone they need to be held accountable.  If Gold there, no problem, it needs to be repriced.

pissing_excellence's picture

This poor guy, he must feel like hes throwing punches in the fog.  Ive never seem corruption dressed up as hard as this, or read anywhere near the constant, puppy soul eating, rapid fire lies that are as big a jumbo jet in your front yard. Sorry folks.  Everybody wants to rule the world.

Pull my teeth all you like.  Fucking robots, they dont realize the incentives given will vanish, and they will feel as disposable as a dixie cup too.

Lt. Col. Korn, XO: [speaking to Yossarian] All you have to do is be our pal.
Colonel Cathcart: Say nice things about us.
Lt. Col. Korn, XO: Tell the folks at home what a good job we're doing. Take our offer Yossarian.
Colonel Cathcart: Either that or a court-martial for desertion.

Good night, expendable bitchez, hahaha

swamp's picture

n American military document just uncovered appears to detail an US Army plan that calls for detaining “political activists” at re-education camps staffed by military-hired “PSYOP officers” in both America and abroad.

The website has unearthed the smoking gun, a copy of a United States military manual entitled FM 3-39.40 Internment and Resettlement Operations, which appears to offer Defense Department insiders instructions on dealing with the imprisonment of anyone considered an enemy to the American way of life and how to go about indoctrination them with an “appreciation of US policies and actions” through psychological warfare.

The PDF made available is dated February 2010 but has only now been leaked online. A copy of the document has been uploaded to the website for viewing, and additionally a version appears to be hosted on the US Military’s Doctrine and Training Publications page at, although access to papers published there are unavailable to those without the Pentagon’s authorization, therefore making it impossible to verify the authenticity of the manual at this time. The military site that appears to host a copy has also implemented security measures on its servers that it cautions visitors are “not for your personal benefit or privacy.”

Further, the title page of the manual warns that the material contained in its 326 pages is be distributed to US Defense Department and its contractors only, and that must be “destroy[ed] by any method that will prevent disclosure of contents or construction of the document.”

“This manual addresses I/R [Internment and Resettlement] operations across the spectrum of conflict, specifically the doctrinal paradigm shift from traditional enemy prisoner of war (EPW) operations to the broader and more inclusive requirements of detainee operations,” the paper’s authors explain in the first paragraph of the documents preface. From there, it goes on to explain that the methods of psychological warfare and brainwashing of persons applies to “US military prisoners, and multiple categories of detainees (civilian internees [CIs], retained personnel [RP], and enemy combatants), while resettlement operations are focused on multiple categories of dislocated civilians (DCs).”

The manual continues by describing categories of personnel whom are certain guidelines of the manual apply. A detainee, for example, is any person captured by an armed force, but does not include personnel held for law enforcement purposes — except where the US is the occupying power. Civilian internees are described as anyone“interned during armed conflict, occupation, or other military operation for security reasons, for protection, or because he or she committed an offense against the detaining power.”

“An adaptive enemy will manipulate populations that are hostile to US intent by instigating mass civil disobedience, directing criminal activity, masking their operations in urban and other complex terrain, maintaining an indistinguishable presence through cultural anonymity and actively seeking the raditional sanctuary of protected areas as defined by the rules of land warfare,” reads the paper. “Commanders will use technology and conduct police intelligence operations to influence and control populations, evacuate detainees and, conclusively, transition rehabilitative and reconciliation operations to other functional agencies.”

On their own part, details the manual by writing, “We have exhaustively documented preparations for the mass internment of citizens inside America, but this is the first time that language concerning the re-education of detainees, in particular political activists, has cropped up in our research.”

Throughout the manual, the DoD outlines methods to go about detaining US military prisoners captured for both“battlefield and nonbattlefield confinement,” how to rehabilitate them to “ensure a successful return to society” and “psychological operations (PSYOP), practices and procedures to support I/R operations.”

Fifty-six pages into the manual, its authors explain the role of psychological operations officers regarding internment and resettlement, and explain that they will be responsible for developing methods designed “to pacify and acclimate detainees or DCs to accept U.S. I/R facility authority and regulations.” PSYOP officers, the manual adds, identify “malcontents, trained agitators, and political leaders within the facility who may try to organize resistance or create disturbances.”

The manual also demands that the PSYOP officers overseeing the detainment camps identify “political activists” for indoctrination.; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: initial; height: 16px; width: 0px; overflow-x: hidden; overflow-y: hidden; vertical-align: middle; quotes: “, ”; display: inline-block; background-position: 0px 0px; background-repeat: no-repeat no-repeat; border-width: 0px; margin: 0px;" name="plus" type="submit" value=" " /> +108; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: initial; height: 16px; width: 0px; overflow-x: hidden; overflow-y: hidden; vertical-align: middle; quotes: “, ”; display: inline-block; background-position: 0px 0px; background-repeat: no-repeat no-repeat; border-width: 0px;" name="minus" type="submit" value=" " /> (128 votes)

Salt's picture

Debt to the penny. Guess we'll follow Canada soon and abolish it.

Waterfallsparkles's picture

I think that Ron Paul has run for President if for no other reason than to get a platform to broadcast his beliefs.  It is working as more and more Americans are waking up to the destructive tenancies of the FED. 

Even if he is not Elected as President he has made a difference.

I think that his Son has a great chance of actually getting elected to the Presidency but his father Ron Paul has laid the groundwork.

razorthin's picture

Not enough that he has "made a difference", Waterfall.  I predict that the republic will not survive 4 more years of Obomney, at least not with a continued pretense of being a "democracy".

AnAnonymous's picture

Aint heriditary ruling great? Building a dynasty just like that.

LowProfile's picture

It is when it restores our liberty.

In your case though, not so much.  So solly!

SilverTree's picture


What do you think about a third-party ticket? 

LowProfile's picture

Not directed at me, but a 3rd party run for RP is out of the question, no chance to get elected, and he would just get blamed by the neocons for "spoiling" it for Romney.

I am Jobe's picture

No Hope for the USSA without RP. I guess the sheeples still believes in crap .

greensnacks's picture

Paul says, "100 years is far too long for Congress to have taken a hands-off approach."  ... but is giving politicians control of the Fed a wise thing to do? I'd trust RP to make good decisions, but everyone else? Hell no.

NewWorldOrange's picture

The point is to ABOLISH the Fed altogether not turn it over to a bunch of politicians, and to get the government out of the "legal tender" business.

Ron Paul is one very courageous man to be taking on the Moneychangers themselves.

Ron Paul 2012

Nobody For President's picture

Wolf writes:

—would scoop money out of the big trough that is feeding just about everybody and everything in the US and often overseas: retirees, ...


So I'm one of those now 73 year old retirees that paid into (involuntarily) SSI for 50 damn years - started working and getting SSI deductions at 14 - and I'm 'feeding at the through' having the fucking nerve to get some of my (forced) savings back? If that money (that went into the so called SSI 'trust fund', now full of gubbermint IOUs) had been invested at say 3%, I would be withdrawing my own retirement investments for another (about) 8 years - THEN I would be 'feeding at the through".

Why put retirees at the head of that list, Wolf? Some of them never paid in, sure. Some of them are abusing the hell out of the so-called system, especially some of the SDI folks. But I think it is fair to say that most of us (pre-Boomers anyway), paid into that system all our working lives on the expectations that we would have a decent, if not grand, retirement. 


And now we are getting thrown into the same barrel as the welfarites and Big Oil and defense contractors, and (by extention) the tarp fuckers and the rest?


Please. We at least have put into the system more than we are presently getting back. Maybe someday I can be a parasite on the system just like say, oh - Bank of America? General Dynamics? 


Doubt I'll live that long...

The Mighty Monarch's picture


Your mistake was in believing that the government would be prudent and honest with the money they confiscated from you.

If the local Mafia goon shakes me down for protection money, I should not be surprised to see him blow it on hookers and booze instead of a security guard for my store.

And no, you did not pay more than you're getting out. Not even close.

RopeADope's picture

Adjusting for dollar devaluation he paid in much more than he will ever receive back.

Husk-Erzulie's picture

@ nobody...

I don't see a lot of sympathy for your position here and frankly your generation needs no sympathy.  You lived the high life in the 50s 60s 70s and 80s.  All that consumerist bullshit you bought and then threw away for years.  The criminals you elected and followed.  The cars, the entertainment, the ridiculous energy consumption, all gathered from the spoils of a military and economic juggernaught that systematically bled the rest of the world.  Endless war, endless theft and all you had to do was go along to get along.  In your defense, through all those years few could see past the stolen wealth and through the sophisticated propaganda, and those who could were sidelined as crackpots and malcontents.  Well, it's clearer now isn't it?  You 70 something retirees are now in a unique position to atone for your willful blindness by confronting the system and forcing change.  You have the time, you have the credibility and you have the money.  Stop whining about your stolen pensions and do something for fucks sake... speak out, agitate, get real and lay something real on the line.  Or will you leave it up to the kids?

Milestones's picture

Good post. Honest and to the point. I am one of those persons age group mentioned. Thanks.         Milestones

Mary Wilbur's picture

Give the man a break. It's not his fault. There was a time in the distant past when Americans believed what the politicians and their minyons told them. Now we know they are all liars and have been since at least 1968.

StychoKiller's picture

"Dreams Come Due, Government and Economics as if Freedom Mattered", ISBN: 0-671-61159-3, by John Galt

The book is dated, but many of the things it talks about are still valid today!

Harbanger's picture

He also lived in a time of limited information, when Americans actually "believed" the MSM.   His Time was pre-Web and the barrage of propaganda he endured from the limited TV channels at the time fed him everthing he knew.

debtandtaxes's picture

The point of ANY pension plan is to pool deposits and invest it so that it earns compound interest.  Consequently, deposits of $10k per year at 5% over 25yrs ends up contributing 533,138.74  - twice his actual deposits! 

So because people who (were forced to ) paying into government pension plans were defrauded when their gov't confiscated it for other uses - they now have no right to eat or pay rent? hmmmm


The Mighty Monarch's picture

SSI deductions are taxes, nothing more. Whether those funds were used to invest in a retirement fund or to pay off interest groups, it is tax revenue. The crime is the unconstitutionality of the Social Security program itself, along with thousands of other things the Tenth Amendment forbids Washington to do but they do anyway. When the very act of a federally mandated pension program is unlawful, then there is no accountability for how it is funded, if it is funded at all.

Oh, and no one has the right to eat or pay rent. You must feed or shelter yourself, or you will die. Having half your income forcibly extracted from you doesn't change this, nor can a government grant such a "right". Nor can the government actually provide those services as they must confiscate wealth or goods from producers in order to do so.

All the SSI deduction accomplishes is fooling taxpayers into accepting higher taxes by convincing them that the government now "owes" them something, or that those extra taxes are "invested" in something that they will collect on later. If they were pooled into one large deduction people might actually start to realize how little of their earnings they actually get to keep.

akak's picture

All you suckers who keep bleating "But I paid into the system, and only want my fair share back!" keep missing the point --- you did not "pay into" ANYTHING, your "savings" and payments were long ago STOLEN and spent! 

Don't you get it yet?  Everything you thought you were paying is GONE!  Bleating about "fairness" and what you think you are owed is meaningless and just a waste of breath.  You are NEVER going to get "your fair share" back from a Ponzi system controlled by crooks and sociopathic theives, so stop fretting over it, and figure out how you are going to support YOURSELF in the years left to you --- because the government is NOT going to be able to it for you.

Harbanger's picture

Since Politicians won't face the problem, they will get what they "paid in" but in freshly printed $.  This doesn't help them or the next generations.  I still think it can be phased out as a bad socialist experiment.  Raising the retirement age a few years and limting to only the needy retirees is a good start.

RopeADope's picture

Raising the retirement age makes SS insovent faster. Older workers stay in the workforce and reduce job advancement for younger generations. Younger generations have families at later years, thereby making the population pyramid even more distorted. Fewer and fewer young workers are birthed to support the older generation.

Milestones's picture

That money was TAKEN not given asshole.              Milestones

Papasmurf's picture

Likewise, those who invested in the markets or FRN's will find it's gone - been stolen years ago.

Corn1945's picture

The problem is that you are not actually paying into anything. 

1) The money that was taken from your check was taken decades ago. It's gone and it happened when you were supposed to be electing intelligent representation.

2) You will receive three times the amount out of programs like Medicare. Again, you aren't "paying in" nearly enough (assuming you want those programs).


donsluck's picture

Dear Corn, do you really think 1)" were suppose to be electing..." is true, that ONE person elects a rep? and 2) this "three times" doesn't simply represent inflation?

Dead Canary's picture

I'm writing in Paul's name on the ballot in November. Who's with me?

ebworthen's picture

Decided this six months ago.

I hope he is on the ballot as an independent so the Rhino Republicrats get the message loud and clear.

eddiebe's picture

If Ron Paul gets to ask another question of Ben, instead of asking 'what is money'? He should maybe ask: Whom do you work for?

optimator's picture

If he's truthful he'll say, "I'm self employed, owning a franchise".

flight77's picture

I work for Sir Evelyn Robert Adrian de Rothschild and volunteer also for the Rockefeller Foundation. My Chief of Staff is Mr. Geithner together with his assistant Mr. Barack Obama. Why do you ask?

Libertarian777's picture

that question won't work.

Bernake will respond that the Fed exists due to a charter from the Congress, the white house nominates and congress confirms him so he works for congress will be the official answer.


the question should be, 'who's interests do you have in mind when you make your decisions?'

and 'prove how your decisions have helped those you mentioned above'.

if he says he's there to help the 'economy' at large, he's failing cos real GDP has negative growth

if he says he's there to help employment, he's failing cos real unemployment is north of 15%

if he says he's there to protect the dollar, he's failing miserably

if he says he's there to protect the middle class with stable prices he's failing there since inflation is over 9%

Withdrawn Sanction's picture

Ask instead, "who are the Class A stockholders of the Federal Reserve banks?"  This disclosure is forbidden by the Federal Reserve Act.  That will then beg question, why is that information hidden, Mr Ben "Transparency" Bernanke?



logically possible's picture

I believe Ben would not want it to be considered "failing" but rather an experiment.