This page has been archived and commenting is disabled.

As Debt Ceiling "Accident" Looms, Ron Paul Jabs Congress: "Don't Mention Warfare/Welfare State!"

Tyler Durden's picture




 

With less than two weeks until a possible debt ceiling "accident" and with investors dumping T-Bills at near record pace, Ron Paul rages that any delay in, or opposition to, raising the debt ceiling will inevitably be met with hand-wringing over Congress’ alleged irresponsibility. But the real irresponsible act would be for Congress to raise the debt ceiling.

Cutting up its credit card is the only way to make Congress reduce spending. Anyone who doubts this should listen to the bipartisan whining over how sequestration has so drastically reduced spending that there is literally nothing left to cut. But, according to the Heritage Foundation, sequestration has only reduced spending from $3.6 trillion to $3.5 trillion. Only in DC would a less than one percent spending reduction be considered a draconian cut.

 

Defense hawks have found a way around sequestration by shoving billions of dollars into the Overseas Contingency Operations (OCO) account. OCO spending is classified as “emergency” spending so it does not count against the spending limits, even when OCO is used for items that do not fit any reasonable definition of emergency.

 

Yet, even using OCO to boost military spending by as much as $80 billion does not satisfy the military-industrial complex’s ravenous appetite for taxpayer dollars.

 

During the majority of my time in Congress, debt ceiling increases were routinely approved. In fact, congressional rules once allowed the House of Representatives to increase the debt ceiling without a vote or even a debate! Congress’ need to appear to respond to growing concerns over federal spending has forced it to end the practice of rubber-stamping debt ceiling increases.

 

Continuously increasing spending will lead to rising inflation as the Federal Reserve tries to monetize the ever-increasing debt. This will eventually lead to a serious economic crisis. When the crisis occurs, Congress will have no choice but to cut spending. The question is not if, but when and under what circumstances, spending will be cut.

 

The only alternative for cutting spending in response to economic crisis involves Congress gradually unwinding the welfare state in a manner that does not harm those dependent on federal programs. Congress will not even consider doing this until enough people have embraced the ideas of liberty to force the politicians to reconsider the proper role of government.

 

Those who accept the premises of the welfare statists are incapable of making principled arguments against welfare and entitlement programs. Thus, they can only quibble over spending levels or how to more efficiently manage the federal bureaucracy. While fiscal conservatives may gain some minor victories with this approach, their failure to challenge the welfare state’s morality or effectiveness dooms any effort to seriously curtail welfare state spending.

 

Similarly, one cannot favor both serious reductions in the military budget and an aggressive foreign policy. So-called cheap hawks may achieve some reforms in the Pentagon’s budget. They many even succeed in killing a few wasteful weapons projects. However, their unwillingness to oppose a foreign policy of perpetual war means they will always cave in to the war hawks’ demands for ever-higher military budgets.

 

Those who understand the dangers from continuing on our current path should support efforts to stop Congress from raising the debt ceiling. However, supporters of liberty will not win the political battle over government spending on welfare and warfare until we win the intellectual battle over the role of government. Those of us who know the truth must do all we can to spread the ideas of liberty.

*  *  *

It seems stocks are starting to wake up to the problems...

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 10/20/2015 - 14:18 | 6690345 LawsofPhysics
LawsofPhysics's picture

Dumping T-bills and going to what exactly?  Do tell, do tell...

The Fed is the bond "market" for fucks sake!

Tue, 10/20/2015 - 14:28 | 6690407 El Vaquero
El Vaquero's picture

Come on Ron.  You know better than that.  If the government doesn't continue to spend, our monetary system collapses.  Of course, if they do continue to spend, it will collapse anyway, but they're going to push this 'till the very end. 

Tue, 10/20/2015 - 14:44 | 6690498 coinhead
coinhead's picture

Debt Ceiling?  Is anyone still watching that show?

Tue, 10/20/2015 - 14:52 | 6690549 daveO
daveO's picture

Yea, where's he been? He's sounding like a paid hack with this;

Continuously increasing spending will lead to rising inflation as the Federal Reserve tries to monetize the ever-increasing debt. This will eventually lead to a serious economic crisis. When the crisis occurs, Congress will have no choice but to cut spending. The question is not if, but when and under what circumstances, spending will be cut.

That happened in '08. Interest rates are still near zero. The boob tude ads, using him, smell like propaganda."No crises now, but you just wait!" The dollar will collapse, they know it.
Tue, 10/20/2015 - 14:59 | 6690579 LawsofPhysics
LawsofPhysics's picture

I have been asking for quite some time to see a chart comparing the velocity for every currency.  Remember, a dead currency does in fact have a velocity of zero. So, the question is, relative to all the other fiat, what has the velocity of the dollar been doing?

Tue, 10/20/2015 - 14:39 | 6690439 Sudden Debt
Sudden Debt's picture

A better topic would be: Nearly no western country has ever repaid it's debt, not even one month without it being a accounting gimmic or selling government property at 1 cent on the dollar where they rent it back at 200% per year... greece might be the first and life is hell over there.

America can't stay in budget from tax income so the debt ceiling will be raised.

It's not even a topic worth talking about, and if people do, they are late... the discussion should have happened when the last one was breached.

The entire debt ceiling talks should just be stopped, America is near death, better make it as pleasant as it possibly can because anything that follows is pain for everybody.

 

Tue, 10/20/2015 - 14:42 | 6690488 ersatz007
ersatz007's picture

Is this "accident" like a shart?  

Tue, 10/20/2015 - 14:18 | 6690346 drink or die
drink or die's picture

Honestly, why does he even bother?

Tue, 10/20/2015 - 14:26 | 6690399 kliguy38
kliguy38's picture

I'm with you........we're already bought and paid for and too fat to get off the couch.........now back to Kaitlin and the NFL

Tue, 10/20/2015 - 14:30 | 6690415 El Vaquero
El Vaquero's picture

Eh, I got a couple of pieces of plum wood that I might be able to make a couple of bows out of.  I won't know until I start roughing them out if they'll work or not, but it's better than watching Katlin and the NFL. 

Tue, 10/20/2015 - 19:19 | 6691752 logicalman
logicalman's picture

What's this wood you've got and what do you plan to make with it?

I've got a maple 'Holmegaard' inspired thing on the go at the moment - last one I made shoots really well and looks pretty cool - given the outer limbs don't bend on these I'm doing a static recurve tips on this one.

Recently picked up some Ipe and Hickory for the next 2 or 3.

Last bow I made decided to delaminate on me before I got chance to shoot it.

Oh, well.

I guess there are a few things worse than watching Kaitlin or NFL, but not that many.

 

 

Tue, 10/20/2015 - 14:49 | 6690529 madcows
madcows's picture

I had some basil hayden bourbon last night.  very nice.  smooth.  a couple of ice cubes, and a few ounces poured over the top.  It makes the pending collapse a little easier to handle.  maybe that's why sin stocks are up.  except for gambling.  that's just throwing money away.  but booze and smokes, that's a cheap sedative.

TOO SEDATIVES AND SEQUESTRATION!   No.  Wait.  TOO SEDITION AND PROFLIGACY!  No.  Ah screw it.  TOO HOOKERS AND BLOW!

Tue, 10/20/2015 - 19:20 | 6691756 logicalman
logicalman's picture

I'm not as think as you drunk I am!

;-)

Tue, 10/20/2015 - 14:19 | 6690348 venturen
venturen's picture

how will the crony 1% make ends meet....Oh the humanity

Tue, 10/20/2015 - 14:22 | 6690369 xrxs
xrxs's picture

Debt ceiling accident in an election year seems politically expedient.

Tue, 10/20/2015 - 14:25 | 6690390 semperfi
semperfi's picture

when was the last time we failed to increase the debt limit ?

wake me up when you get the answer

Tue, 10/20/2015 - 14:26 | 6690396 dark pools of soros
dark pools of soros's picture

Ron Paul is a sedative not a tinderbox

 

Tue, 10/20/2015 - 16:20 | 6691000 Syrin
Syrin's picture

Wow.   That is very insightful.   So is his son, and that's his problem.  Trump is a tinderbox and what people are wanting right now.

Tue, 10/20/2015 - 14:26 | 6690397 somebody poison...
somebody poisoned the water hole's picture

True Dat

Tue, 10/20/2015 - 14:29 | 6690409 SillySalesmanQu...
SillySalesmanQuestion's picture

Alleged...?

Tue, 10/20/2015 - 14:33 | 6690419 goldenbuddha454
goldenbuddha454's picture

Enough with the suspense, Just put in Paul Ryan to raise the debt ceiling.  He's no different than gutless John Boehner. 

Tue, 10/20/2015 - 14:34 | 6690431 aliki
aliki's picture

im convinced bernanke is the devil. he's basically given the "all-clear" to continue this supression of global interest rates. its actually worse if u are able to borrow at a cheaper rate IMO because it entices you rather than makes u think twice about doing it. in the long-run, ur fucked regardless because your NEVER going to pay back that debt anyway. then again, i guess thats been the point all-along.

our founders are spinning in the graves. they were running from this repression. now, we glorify it and demonize any & everyone who dares suggest raise/normailze rates so that people can take personal responsibilty thru saving & growing their own $$$ off interest.

Tue, 10/20/2015 - 16:12 | 6690960 leftcoastfool
leftcoastfool's picture

BLAME BEN BERNANKE

Tue, 10/20/2015 - 14:35 | 6690438 roadhazard
roadhazard's picture

I think it's Rand Paul running for Prez this time.

Tue, 10/20/2015 - 14:41 | 6690481 dark pools of soros
dark pools of soros's picture

he's still talking about liberty or something... not how a group of interests can grab the next gov contract cash cow

can this country even function without the economy injecting debt into itself every 5 seconds?

 

 

Tue, 10/20/2015 - 19:22 | 6691766 logicalman
logicalman's picture

When money IS debt, if you pay off all the debt there'd be no money.

Seems like a great way to run things!

 

Tue, 10/20/2015 - 14:40 | 6690479 world_debt_slave
world_debt_slave's picture

let them keep rising it, sooner to a crash of the system

Tue, 10/20/2015 - 14:43 | 6690496 bentaxle
bentaxle's picture

I thought they were keeping Boehner's retirement on ice, so they could get through this.

Tue, 10/20/2015 - 14:51 | 6690538 alphahammer
alphahammer's picture

 

"As Debt Ceiling "Accident" Looms, Ron Paul Jabs Congress: "Don't Mention Warfare/Welfare State!"

 

Stopped at RON. PAUL. That guy needs to have his mic taken awqay for good. He's a real threat to anything economic -- including his own portfolio which he blew up as he went "all in" on gold precisely as it drove off a cliff...

Wonder why he's now making ridiculous "predictions" on all those outbrain link adds? He's broke, yet now telling everyone what they should be doing with their money. Right. Good one.

Just another PT Barnum without the flair and with a bad fitting suit...

Tue, 10/20/2015 - 14:59 | 6690582 Skeeterworborton
Skeeterworborton's picture

Some of us know the reality..the rest don't give a fuck...

Tue, 10/20/2015 - 15:03 | 6690593 kaboomnomic
kaboomnomic's picture

I remember russia hater, said russia will have problem with their "marginal" budget doing war in syria. That russia will collapsed soon.

Well.....

Let me think, when i heard about Russia have DESPERATION, TO INCREASE DEBT!! That it WILL RUN OUT OF CASH, TO OPERATE A COUNTRY. And that GOVERMENTS, WOULD CEASE TO FUNCTIONS, IF THE DEBT LIMITS, DOESN'T GET INCREASED, by Russian's DUMA (that's conggress, for you who have "mush brain", as Putin said).

Geeeeezzzzz... lemme think first. When do i heard russian so desperate about that.

Eeeeeeeeeeeeeeeeeeeeeeeeeeeeee.........................

Tue, 10/20/2015 - 15:50 | 6690792 conraddobler
conraddobler's picture

Interest is not the problem it just should not be the domain of the government to either pay it or charge it.

It should not back debts nor rack them up, debt on a personal level or business level is fine if it's privately issued.

Just as a general rule the only debt anyone or any business should ever have is self extinguishing ala if you can buy one more truck for your business and the marginal income it generates is enough to pay the debt back plus a tad more for the trouble go for it but the calculus behind that while mathematically trivial is still a deceptive problem because a large percentage of people are ignorant of the entire domain of items that could impact the equation and they are ignorant because it has not as of yet bit them in the ass.

You have to factor in business enviroments, downturns, upturns, unforseen possiblities, know and unknown knowns....  LOL hat tip to Rummy.

I ran a business for years with zero debt and it all worked out better that way there is really no need to have debt because debt is a risk.

Given the stunning levels of debt and given the extrodinarily low levels of risk premia for that it's easy to spot the large lump in the python of the world business market.

Buying back stock with debt is an extrodinarily risky thing to do you are literally betting the company that there WILL NOT be an epic downturn in which capital raising becomes next to impossible and it becomes a game of survival.

Of course in the course of reality there are ALWAYS those times and those flush with cash win and those flush with debt lose.  OR you get bailed out which is why there is a much smaller subset that have made the correct assumption up until now that there is no way X could happen because X is a systemic extinction event and the system will NEVER let itself die.

That has proved to be the winning formula up until it isn't but what those banking on that dynamic fail to realize is that such a world exists ENTIRELY outside their control and thus is in my opinon a complete mirage not to mention it comes with a host of unpleasant possiblities that entail ceeding control to things and people you may regret ceeding control to.

This has all happened before but never to this extent the world over and in the past when this has occured nations have decalred bankruptcy and they do this by renegotiating the world order ie the exchange rates specifically the reserve currency.   The one worlders seem to be on a roll because to fix this you have to either tell a gigantic portion of the population sorry you fucked up you trusted us and zero their accounts OR threaten them with that and give them option B which is ceeding yet more control over their lives to a new system.

It's not hard to see what is going on here and that is exactly what is comming next and our only hope is that a scrap for dominance breaks out and stops the steam roller heading our way.

It's not surprising that this has gotten to where it is but it is stunning in scope and truth is stranger than fiction.

 

 

Tue, 10/20/2015 - 15:57 | 6690886 Demdere
Demdere's picture

https://thinkpatriot.wordpress.com/2015/10/20/propaganda-example-of-the-...

I agree with Ron Paul, the amount of propaganda is amazing.  I read a lot of sources, and you see so many obviously-press released, just a pov tailored to a particular audience's tastes.

Read that, it is fun and informative and oh so meta.  Appreciate the meta for me.

Tue, 10/20/2015 - 16:04 | 6690917 Phillyguy
Phillyguy's picture

No one wants to talk about the Elephant in the room. Capitalism always faces the same problem- the tendency of profits to drop. As an example- a car company requires 10 workers, making $10/hr - 8 hrs (total labor cost 10 x 10 x 8= $800) to assemble a car. The car manufacturer uses automation to reduce the time to assemble a car to 4 hr resulting in a 50% reduction in labor costs (10 x 10 x 4= $400). The car manufacturer uses more automation to reduce the time to assemble a car to 2 hr resulting in a further 50% reduction in labor costs (10 x 10 x 2= $200). This process is repeated such that in now takes 10 workers, making $10/hr only 1 hr to assemble the car- incremental reduction in labor costs another 50% (10 x10 x 1=  $100). The problem for the manufacturer is that even though they continue reducing labor costs 50%, the actual amount of money saved (or made) declines exponentially by a factor of 2. In an attempt to maintain/increase profit margins, capitalism always finds new mechanisms to generate profits. They bust unions and out-source jobs to Mexico, China, India and other low wage platforms. They create “temp” jobs that pay minimum wage, provide no benefits and no job security. When real estate sales and auto sales decline, you create sub-prime loans and other financial gimmicks to boost sales. The reason why Congress de-regulated financial markets (repeal of Glass Steagall and Commodity Futures act of 2000) was to allow Wall banks and finance houses to engage in highly risky financial transactions- leveraged buyouts, derivatives, etc- to keep profits up, activities that directly lead to the 2008 financial crash. The FEDs answer was to transfer $ trillions from US taxpayers to (still) insolvent Wall St banks (QE). All of this money has inflated assets (stocks and trendy real estate) and as a result, investors have no idea what the actual value of these assets should be, thus we have high levels of market “volatility” and another financial crash just waiting to happen. Declining rates of profit are endemic to Capitalism. 

Tue, 10/20/2015 - 16:57 | 6691149 HopefulCynical
HopefulCynical's picture

The problem for the manufacturer is that even though they continue reducing labor costs 50%, the actual amount of money saved (or made) declines exponentially by a factor of 2.

Please provide proof of this.

Also, in an actual free market, with a government that actively punishes cheats and scam artists but otherwise leaves people alone, as one industry matures, its product becoming a "commodity" with small profit margins, new industries are popping up to take its place as a generator of high profits.

The only true constant in the world is change. A free market system most accurately and efficiently harnesses not only that perpetual change, but the natural self-interest of people, in a way that provides the most possible benefit to the most possible people.

Tue, 10/20/2015 - 18:28 | 6691539 Herdee
Herdee's picture

Spending is exponential.You ain't seen nothin' yet.Wait till they blow the lid off it in one big hyper- inflationary spiral upwards until the bubble pops.Guaranteed the politicians will take the easy way out.Trump will kick start it.The next step is infrastructure spending on a massive scale.

Tue, 10/20/2015 - 19:00 | 6691649 Duc888
Duc888's picture

 

 

Gonna be a fucking hoot when the Walmart scooter FSA brigade gets their Gimmedat card turned off.

The first chef who comes up with a good recipe for the bipedal heifer who's ass is so big it needs it's own zip code will win an Oscar.....

I'm gonna fillet that fat ass and get down to grillin'..............

Where's dem fava beans?  Aisle 6?

 

 

Do NOT follow this link or you will be banned from the site!