Ron Paul: "Why We’re No Longer Number One"

Tyler Durden's picture

By Ron Paul via the Ron Paul Institute

Why We’re No Longer Number One

Last week World Bank economists predicted that China would soon displace the United States as the world’s largest economy. The fact that this one-time economic basket case is now positioned to surpass the US is one more sign of the damage done to American prosperity by welfare, warfare, corporatism, and fiat money.  

Some commentators have predicted that China’s reign as the world’s largest economy would not last long. This may be true. While China has made great strides since adopting free-market reforms in the 1970s, China is still run by an authoritarian government whose economic policies distort the market in order to benefit state-favored industries. These state-favored businesses are often controlled by politically-powerful individuals.  
What many of these commentators fail to notice is that the American government pursues many of the same flawed policies as the Chinese. For example, because of the increase in regulations, subsidies, and bailouts, many American businesses are putting more resources into manipulating the political process than producing goods and services desired by consumers. Many big businesses even lobby Congress and the federal bureaucracy for new regulations on their industries. They do this because big business can more easily absorb the costs of complying with the new regulations that force their smaller competitors out of business.
China is regularly criticized by American protectionists for subsidizing its export industries. However, the US government does the same thing via programs such as the Export-Import Bank. China is also criticized for manipulating the value of its currency to make its exports more attractive to foreign consumers. This may well be true, but China is hardly unique in this respect. Throughout its history, the Federal Reserve has manipulated both the domestic and international economy, often working in partnership with foreign central banks.
The Federal Reserve’s inflationary policies benefit big banks, politically-connected businesses, and big-spending politicians at the expense of the American people. Anyone interested in helping improve the American people’s economic situation should focus on changing America’s monetary policy, not China’s.
Ironically, many of the same politicians who denounce China’s monetary policy benefit from Chinese purchases of America’s debt. If China stopped making large purchases of US debt, the Federal Reserve would be forced to monetize even more debt, thus risking hyperinflation. So the best thing Congress could do to make it more difficult for China to manipulate the global economy is cut federal spending.
One advantage China has over the US is that the Chinese government does not waste money on a hyper-interventionist foreign policy. The United States government spent approximately $752 billion on the military in fiscal year 2013. In contrast, China spent approximately $188 billion. While China may be increasing its military spending, it has a long way to go to catch up to the United States.
It is difficult to see how the American people, other than those who run or work for the military-industrial complex, benefit from this spending. Military spending, like all government spending, hampers private sector growth by taking resources away from investors, entrepreneurs, and consumers while contributing significantly to the national debt. In contrast, a return to the policy of peace and free trade would allow those resources to be used by entrepreneurs to create new businesses and new jobs.
News that China is soon to surpass the United States as the largest economy in the world is a stark reminder of how the American people are harmed by the welfare-warfare state, crony capitalism, and fiat currency. The only way to avoid continuing collapse is to finally reject an interventionist foreign policy, stop bailing out and subsidizing politically powerful industries, and restore a free market in money.

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TeamDepends's picture

All your ranchers are belong to us.

Buckaroo Banzai's picture

The US may no longer be number one, but the beltway surrounds a big steaming pile of number two.

james.connolly's picture

Funny pre WW2 the USA was a failed penal colony and nation of hair-lips at best,

Post WW2 with NAZI ( operation paperclip ) support, and the fact that the rest of the worlds MANUFACTURING was destroyed the USA looked good for about 20 fucking years, then in the 1970's the JAP's kicked the USA ass in AUTO;

By 1980's the USA was bankrupt,

#1 my fucking ass, ... Ron Paul is talking 1950's revisionism, .. happy days my fucking ass.

Happy Day's are never coming back,

chumbawamba's picture

Look, I'm no nationalist, but your version of American history is like Rachel Maddow's telling of heterosexual sex.

I am Chumbawamba.

James_Cole's picture

News that China is soon to surpass the United States as the largest economy in the world is a stark reminder of how the American people are harmed by the welfare-warfare state, crony capitalism, and fiat currency. 

Er.... Other than the warfare bit, how's the Chinese economy function again?? RP trying to walk a tightrope and failing. So what if the Chinese 'economy' has allegedly passed Americas in size? If anything this would demonstrate that cronyism works

i_call_you_my_base's picture

Right, in the 1920s America resembled a failed penal colony. You seem to forget the industrial revolution entirely.

thamnosma's picture

I'm afraid he's forgotten a lot more than that.

crazyjsmith's picture

Mr Connolly,

I love the Hair-lip remark.  Everytime I see it in a comment, it just makes me kind of chuckle - because it is meant to be derogatory in some weird way, but ends up sounding more funny than anything, and just gives a very good sense of where the comment is coming from.  And especially now, where hair-lips are totally hip, and embraced here in the states.  

So sorry little Chicom friend - your overly aggressive, yet very scripted nonsense is boring and just plain ackward.  And I bet I got hairs on this lip that are longer than that little 2 inch angry yella fella you are probably carrying around. All pretending to be a man.  So I dispose of you like I would some creepy Mormon Pamphlet I found stuck to my windshield - 

Good Day, and May the Force Not Be with You

bigbucksr's picture

I agree with your point that the US's post WW2 economic dominance was due in large part due to the destruction of the manufacturing base of 4 of the 5 largest economies of that time. Think about it, Germany, England, France and Japan were effectively destroyed. Perhaps we are poised for a repeat scenario. The money printing of the the last 40 years has created such world wide global mal investment that the only way out of this economic mess is to destroy worldwide capacity...both manufacturing and labor capacity....too many manufacturing plants, too many car factories, too many empty apartment cities in china....keyseyism (more aggregate demand) is not the answer just like we discovered in the 1940s

bigbucksr's picture

The question is which countries will be destroyed....

chumbawamba's picture

I must admit to being out of touch with "reality" for a while now, having eschewed any interest in public or world affairs in favor of study of more pertinent matters.

But I read this and I wonder, is this really something that even needs to be written?  I mean, I like Ron Paul and all, though I'm still not sure what that whole botched election bid was all about.  But isn't this just basic common sense?  I mean, to me it's like ZH running an article that says, "once in a while you should make sure to catch up on your lost sleep or else it'll catch up to you".

Anyway, just wondering if I'm losing touch with reality or if the world has.

I am Chumbawamba.

Cathartes Aura's picture

whose reality Chumba?

which One?

Greenskeeper_Carl's picture

Yes, it is something that needs to be written, and it needs to be read by as many people as possible. What RP said may seem so obvious to us that it seems unnecessary to even write, but to most people it would be completely out of left field. Articles like this need to be written and spread so that others may learn the truth about the fed. That's what all of this really comes down to, IMO. There is no issue more important, and most people don't even know what the fed is, or, at least in my case, the people who I have encountered that had even heard of the federal reserve thought it was some kind of part of the treasury or something. As long as that institution exists, the rest of these issues are pointless. The fed enables them all.

James_Cole's picture

But I read this and I wonder, is this really something that even needs to be written? 

The funny bit is Ron Paul creating his own institute named after himself, the clown show goes on!

Squid-puppets a-go-go's picture

ron paul is part of the solution

james_cole is part of the problem

and the problem goes beyond dumb and annoying, its downright evil

James_Cole's picture

and the problem goes beyond dumb and annoying, its downright evil

the american taliban - fightin' dem libtards, one downright evil bastard at a time. for freedom an' shit. 

prains's picture

never really understood the metric behind the concept of being number 1. how is an economy number 1 ? number 1 at what? graft, cronyism, quiet lobbyized corruption, black ops overthrowing of other sovereign gov't, killing brown people, killing innocent people in tall buildings, starting proxy woars that are meant to start full blown global woars. I guess these are all GDP metrics that can be applied to 70% of the american economic GDP in some form or another. The money to produce all this killing has to trickle down somewhere. Not sure how this historically means an economy is number 1 or why that's something to be proud of? Help me out the rest of us from 2 to 7 billion can try and understand how we can get better so one day maybe we can be number 1 too !


or is nobody else allowed to be number 1 ?

dexter_morgan's picture

So, my question is, Why did Rand get dropped on his head so many times? Something has to account for him becoming the anti-Ron Paul as time goes by.

1stepcloser's picture

He kept fucking with Ron's stack! Ronny don't play that!

SilverIsMoney's picture

Lol... as much as I love Ron Paul, this is hilarious...


Buckaroo Banzai's picture

Rand Paul really lost me when he stabbed Cliven Bundy in the back.

Charles Nelson Reilly's picture

It's better just to move on from Rand at this point. There is zero chance that one individual is capable of fixing any of this mess.

g'kar's picture

These layers of crap were built up over a period of time. In geology I think they call it sedimentary layering. But eventually you get an extinction level event.

james.connolly's picture

Daddy was just a US Congressman, in Texas, where his cheap rhetoric got him elected 20 terms.

Randy Paul wanted to be a US Senator,

US Senate seat requires eating AIPAC shit, and being fucked ( mouth, ass, ear, ... every orifice ) by every alpha male in TEL-AVIV.

Randy is now just a bitch, not unlike OBAMA.

What happened to RANDY PAUL?

In a quest for power the God's make you mad.

Clive Bundy is a real man, Randy Paul is NOT.

Dr. Engali's picture

I think Rand tries to play the political game, which he is not very good at, instead of being true to himself. Hopefully as he ages more of his father's characteristics come out.

DollarMenu's picture

You've got to be carefull with that 'hope' stuff.

Too much can get you down a dead end road.

The Gooch's picture

For the punk rock Tylers, China #1.


Recorded by The Gooch.

HELLKITE, r.i.p.

TeamDepends's picture

This one time, at band camp, Barry stuck Marx' flute up his....

i_call_you_my_base's picture

I find any article about "what's wrong with america" that does not include rampant corruption as a cause suspect. The fed may excacerbate corruption, but to me it's a biproduct, not the cause of the downfall. Cronyism, graft, nepotism, etc, is the true cause. The complete rejection of ethical conduct and a merit-based society are the systemic maladies of the US. With those, nothing works.

The Gooch's picture

The "fed" births corruption.

Breach, even.

Dr. Engali's picture

The fed is synonymous with corruption.

JR's picture

No. It is the Federal Reserve that has stolen America’s greatest; it is the Federal Reserve that has sapped America’s energy and transferred it to its own accounts.

The Federal Reserve is the single most important reason for what’s wrong with America. Because of this monster operating for 100 years against the public interest, the corruption from political officials has been accelerated.

The country, its politicians and political parties, its institutions, all have been purchased because they are totally addicted to Fed money – created out of nothing – enabling Congress to spend money like crazy with money it doesn’t have, transferring control of all power centers to the bankers.

[W]hen the money is created out of nothing for the government it is spent by the government. On the banking side, however, when it's created out of nothing it's not spent by the banks it is loaned by the banks to you and to me and we spend it. Notice that when they loan it to us we have to pay them interest on it. Think about this for a minute. This money was created out of nothing and yet they collect interest on it which means that they collect interest on nothing. Not too shabby!”

For instance, 2 1/2 times as much money on an 80% home loan will be paid to the banks in interest created out of nothing than will be paid to those who provide all the labor and all the materials to construct the home. The Federal Reserve gets rich all right but they get it by taking it from us.

G. Edward Griffin, author of The Creature from Jekyll Island: A Second Look at the Fed, explains further:

A strong nation is not a candidate to surrender its sovereignty but a weak nation is. If America can be brought to her knees where she is struggling for survival, if people are hungry, if we have riots in our streets, then Americans could possibly be grateful for…those wonderful blue-helmeted peace-keeping forces…or international money, a new world money with purchasing power... That is what we're dealing with.

“What I'm trying to say is that the name of the game out there is not wealth, it is power.”

Griffin continues:

“You are led to the question of where is this river flowing? Where's it going? … They're not accumulating it at all. What are they spending it for? The answer may surprise you. They're not buying more yachts and mansions with this money; they've already got all of those they possibly want. … That's not it. When a person has all the wealth that you could possibly want for the material pleasures of life, what is left? Power. They are using this river of wealth to acquire power over you and me and our children.

They are spending it to acquire control over the power centers of society. The power centers are those groups and institutions through which individuals live and act and rely on for their information. They are literally buying up the world but not the real estate and the hardware, they're buying control over the organizations, the groups and institutions that control people. In other words, to be specific, they are buying control over politicians, political parties, television networks, cable networks, newspapers, magazines, publishing houses, wire services, motion picture studios, universities, labor unions, church organizations, trade associations, tax-exempt foundations, multi-national corporations, boy scouts, girl scouts, you name it…this is where those people have been for many decades spending this river of wealth to acquire operational control particularly over those institutions and individuals, those organizations that represent opposition to themselves….”

And, thus, America has lost not only her institutions, but her government, her freedom and her prowess.

g'kar's picture

JR, you and Dewey Cheatum and Howe put out really good well thought out info. Thanks.

Yes_Questions's picture



WTF is #1 supposed to fucking mean anymore anyway.

Charles Nelson Reilly's picture

Saw some a-hole today walking around with a "back to back world war champs" t-shirt on. I'm sure my grandpa who fought at Guadacanal & had years and years of nightmares & flashbacks after he fought would be proud?!?

What a total fucking disgrace we've become in allowing these bloodthirsty warmongers to repeatedly lie to us and distort history.

Dr. Engali's picture

That asshole wearing the t-shirt would probably cry like a baby at the thought of having to face some of the horrors your grandfather faced too.

rockface's picture

Even the 49ers couldn't Threepeat.

buzzsaw99's picture

china wins the kewpie doll. big whoop.

Leraconteur's picture

It's a worthy laurel when the USA has it, but as soon as it slips a notch 'so what' is the response.

Classic. Pathetic. A nation and culture in decline.

Robot Traders Mom's picture

I still think it was a blessing in disguise he wasn't elected. He would have been scapegoated for the inevitable collapse. Now, our society will be remembered for the stupidity of ignoring him to fight for Obama and Romney...

SilverIsMoney's picture

Unforunately, he's right, and because of that they will start a big giant war to show the whole world they're still no. 1!

james.connolly's picture

We're NO LONGER #1 because we never were #1,

Just because the USA for a short while was ahead of the pack with NAZI t( Operation Paperclip ), doesn't make the USA #1, rockets, moon landing, NASA all that made USA great was stolen from NAZI's.

Yes, the USD is #1, but that is thanks to LONDON/TEL-AVIV, and not fuck to do with USA.

USA is a 3rd world penal colony with nukes, study the CIA factbook, and see that's it citizens have the same IQ, and read/write as zimbabwe.

#1 my fucking ass, only in your mind.