Last year the Chairman of the Federal Reserve told me that gold is not money, a position which central banks, governments, and mainstream economists have claimed is the consensus for decades. But lately there have been some high-profile defections from that consensus. As Forbes recently reported, the president of the Bundesbank (Germany’s central bank) and two highly-respected analysts at Deutsche Bank have praised gold as good money.
Why is gold good money? Because it possesses all the monetary properties that the market demands: it is divisible, portable, recognizable and, most importantly, scarce – making it a stable store of value. It is all things the market needs good money to be and has been recognized as such throughout history. Gold rose to nearly $1800 an ounce after the Fed’s most recent round of quantitative easing because the people know that gold is money when fiat money fails.
Central bankers recognize this too, even if they officially deny it. Some analysts have speculated that the International Monetary Fund’s real clout is due to its large holdings of gold. And central banks around the world have increased their gold holdings over the last year, especially in emerging market economies trying to protect themselves from the collapse of Western fiat currencies.
Fiat money is not good money because it can be issued without limit and therefore cannot act as a stable store of value. A fiat monetary system gives complete discretion to those who run the printing press, allowing governments to spend money without having to suffer the political consequences of raising taxes. Fiat money benefits those who create it and receive it first, enriching government and its cronies. And the negative effects of fiat money are disguised so that people do not realize that money the Fed creates today is the reason for the busts, rising prices and unemployment, and diminished standard of living tomorrow.
This is why it is so important to allow people the freedom to choose stable money. Earlier this Congress I introduced the Free Competition in Currency Act (H.R. 1098) to permit people to use gold as money again. By eliminating taxes on gold and other precious metals and repealing legal tender laws, people are given the option between using good money or fiat money. If the government persists in debasing the dollar – as money monopolists have always done – then the people would be able to protect themselves by using alternatives such as gold that are both sound and stable.
As the fiat money pyramid crumbles, gold retains its luster. Rather than being the barbarous relic Keynesians have tried to lead us to believe it is, gold is, as the Bundesbank president put it, “a timeless classic.” The defamation of gold wrought by central banks and governments is because gold exposes the devaluation of fiat currencies and the flawed policies of government. Governments hate gold because the people cannot be fooled by it.
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Filed under Buy Silver Coins by
The taxes that a person is obliged to pay to the state are called state taxes. State taxes are based mainly on a taxpayer’s income at the state level. Each state has its own system of taxation which can vary from one place to another. To increase revenue, nearly all states collect income taxes, sales taxes, excise taxes, license taxes, intangible taxes, property taxes, estate taxes and inheritance taxes The combined revenue from income and sales taxes is what makes up the bulk of state taxes.
The majority of states collect income taxes while some do not. Examples of these are the states of Alaska, South Dakota, Texas, Florida, Nevada, Washington and Wyoming. State income taxes are the leading source of educational funds in the majority of states. Local residents also enjoy police and fire protection services because of state income taxes. Be aware though that federal income taxes are completely different from state income taxes. Federal tax rates vary by taxable income while state tax rates vary by jurisdiction.
State sales taxes are taxes levied on the retail sale of a particular property or service. Generally, it is the purchaser who pays for the tax but it is the vendor who transfers it to the local tax authorities. Generally, all states collect sales taxes with a few exceptions: Alaska, New Hampshire, Delaware, Oregon and Montana.
Filing state taxes is very much similar to filing federal taxes. The local people has the alternative of filing their taxes using the old pen and paper method, or just file taxes electronically with the use of E-file supported by a tax software.
The modern-day, limited-government movement has been co-opted. The conservatives have failed in their effort to shrink the size of government. There has not been, nor will there soon be, a conservative revolution in Washington. Political party control of the federal government has changed, but the inexorable growth in the size and scope of government has continued unabated. The liberal arguments for limited government in personal affairs and foreign military adventurism were never seriously considered as part of this revolution.
Since the change of the political party in charge has not made a difference, who's really in charge? If the particular party in power makes little difference, whose policy is it that permits expanded government programs, increased spending, huge deficits, nation building and the pervasive invasion of our privacy, with fewer Fourth Amendment protections than ever before?
Someone is responsible, and it's important that those of us who love liberty, and resent big-brother government, identify the philosophic supporters who have the most to say about the direction our country is going. If they're wrong – and I believe they are – we need to show it, alert the American people, and offer a more positive approach to government. However, this depends on whether the American people desire to live in a free society and reject the dangerous notion that we need a strong central government to take care of us from the cradle to the grave. Do the American people really believe it's the government's responsibility to make us morally better and economically equal? Do we have a responsibility to police the world, while imposing our vision of good government on everyone else in the world with some form of utopian nation building? If not, and the enemies of liberty are exposed and rejected, then it behooves us to present an alternative philosophy that is morally superior and economically sound and provides a guide to world affairs to enhance peace and commerce.
One thing is certain: conservatives who worked and voted for less government in the Reagan years and welcomed the takeover of the U.S. Congress and the presidency in the 1990s and early 2000s were deceived. Soon they will realize that the goal of limited government has been dashed and that their views no longer matter.
The so-called conservative revolution of the past two decades has given us massive growth in government size, spending and regulations. Deficits are exploding and the national debt is now rising at greater than a half-trillion dollars per year. Taxes do not go down – even if we vote to lower them. They can't, as long as spending is increased, since all spending must be paid for one way or another. Both Presidents Reagan and the elder George Bush raised taxes directly. With this administration, so far, direct taxes have been reduced – and they certainly should have been – but it means little if spending increases and deficits rise.
When taxes are not raised to accommodate higher spending, the bills must be paid by either borrowing or “printing” new money. This is one reason why we conveniently have a generous Federal Reserve chairman who is willing to accommodate the Congress. With borrowing and inflating, the “tax” is delayed and distributed in a way that makes it difficult for those paying the tax to identify it. For instance, future generations, or those on fixed incomes who suffer from rising prices, and those who lose jobs – they certainly feel the consequences of economic dislocations that this process causes. Government spending is always a “tax” burden on the American people and is never equally or fairly distributed. The poor and low-middle income workers always suffer the most from the deceitful tax of inflation and borrowing.
Many present-day conservatives, who generally argue for less government and supported the Reagan/Gingrich/Bush takeover of the federal government, are now justifiably disillusioned. Although not a monolithic group, they wanted to shrink the size of government.
Continue reading The Truth About Neoconservatism at LewRockwell.com
Filed under Economy by
I recently held a hearing in my congressional subcommittee on the subject of competing currencies. This is an issue of enormous importance, but unfortunately few Americans understand how the Federal Reserve and Treasury Department impose a strict monopoly on money in America.
This monopoly is maintained using federal counterfeiting laws, which is a bit rich. If any organization is guilty of counterfeiting dollars, it is our own Treasury. But those who dare to challenge federal legal tender laws by circulating competing currencies– at least physical currencies– risk going to prison.
Like all government created monopolies, the federal monopoly on money results in substandard product in the form of our ever-depreciating dollars.
Yet governments have always sought to monopolize the issuance of money, either directly or through the creation of central banks. The expanding role of the Federal Reserve in the 20th century enabled our federal government to grow wildly larger than would have been possible otherwise. Our Fed, like all central banks, encourages deficits by effectively monetizing Treasury debt. But the price we pay is the terrible and ongoing debasement of our money.
Allowing individuals and business to use alternate currencies, especially currencies backed by gold and silver, would expose the whole rotten system because the marketplace would prefer such alternate currencies unless and until the Fed suddenly imposed radical discipline on its dollar inflation.
Sadly, Americans are far less free than many others around the world when it comes to protecting themselves against the rapidly depreciating US dollar. Mexican workers can set up accounts denominated in ounces of silver and take tax-free delivery of that silver whenever they want. In Singapore and other Asian countries, individuals can set up bank accounts denominated in gold and silver. Debit cards can be linked to gold and silver accounts so that customers can use gold and silver to make point of sale transactions, a service which is only available to non-Americans.
The obvious solution is to legalize monetary freedom and allow the circulation of parallel and competing currencies. There is no reason why Americans should not be able to transact, save, and invest using the currency of their choosing. They should be free to use gold, silver, or other currencies with no legal restrictions or punitive taxation standing in the way. Restoring the monetary system envisioned by the Constitution is the only way to ensure the economic security of the American people.
After all, if our monetary system is fundamentally sound– and the Federal Reserve indeed stabilizes the dollar as its apologists claim–then why fear competition? Why do we accept that centralized, monopoly control over our money is compatible with a supposedly free-market economy? In a free market, the government’s fiat dollar should compete with alternate currencies for the benefit of American consumers, savers, and investors.
As Austrian economist Ludwig von Mises explained, sound money is an instrument that protects our civil liberties against despotic government. Our current monetary system is indeed despotic, and the surest way to correct things simply is to legalize competing currencies.
The establishment neocon Republican Party has done just about everything they can to dismiss Ron Paul and to ignore his supporters.
What do they fear?
1. They fear taking responsibility for their years of policies that has contributed to the demise of America. Most Republicans are bought and paid for by the same international bankers that own the Democratic Party, and they don't want the American public to know they are really not that much different than their Democratic counterparts.
Ron Paul, on the other hand, represents a completely different approach, one that upholds and supports the Constitution of the United States. Not so with our Republican and Democratic politicians.
2. The Republican Parties efforts throughout the primary season to corrupt the voting process seems to indicate they do not want to hear the voice of the American people. They fear that if the grassroots voice of the people were to be heard, the establishment Republican Party would find themselves in the minority.
Now, with the Republican Convention coming up soon in Tampa, they are stepping up their efforts to close off the voices of American patriots:
- In Maine, where Ron Paul supporters held a clear majority at the State Convention, the establishment is attempting to unseat the state’s duly elected delegates and alternates – acting like sore losers in the process. The challenge to our delegates in Maine is so bogus that Republican Governor Paul LePage – who is one of the few delegates not being challenged by the establishment – has declared he will not attend the Republican National Convention unless Ron Paul's delegates and alternates who were duly elected are seated;
- In Louisiana, establishment “big wigs” used threats, intimidation, and force – literally smashing the bones of one gentleman – to shut out Ron Paul supporters who had a clear majority at the State Convention;
- In Oregon, the State Chairman blatantly ignored the votes of the Convention, taking it upon himself to replace the duly elected alternate delegates with an “appointed” slate chocked-full of establishment cronies;
- In Mitt Romney’s home state of Massachusetts, corrupt Party officials changed the rules after the game was over – kicking out Ron Paul’s duly elected delegates and alternates and replacing them with their hand-picked cronies.
3. Perhaps the most important thing the Republican establishment fears about Ron Paul is that he has been right for decades and if they were to accept his ideas, they would finally have to admit they were wrong.
It's clear that the Republican Party fears Ron Paul, or more importantly, they fear the voices of freedom loving American Patriots who want to return our country to it's Constitutional roots.
Filed under Campaign Trail by
Federal taxes are taxes that an individual is obliged to pay to the national government to sustain the country’s need for commodities and services. Individuals are bound to pay their contribution because it helps the national government fund its many programs. Most people find paying taxes to be very burdensome. Because of the tremendous effort that each payer has to put out in order to earn money, many demand that they know where federal taxes go.
The most challenging job of the government is probably budgeting the money collected from federal taxes. During the past year, the U.S. government spent approximately $3.5 trillion which is equivalent to 24% of the country’s GDP. About $2.2 trillion was supplied by federal taxes while the other $1.3 trillion was financed by borrowing. Taxpayers may be a bit surprised to know that the majority of the federal taxes are invested in senior programs. Senior programs that funds social security of retirees are allocated with 39% of the total federal budget.
Spending on defense generally guarantees for the nationwide safety and protection of the United States. It funds the military and pays for the Pentagon. The defense department uses around 20% of the federal taxes. An additional 17% of the federal taxes are allotted to welfare. Poor people are allotted 17% of the total federal taxes. Examples of welfare programs include Medicaid, food stamps for groceries, housing assistance and insurance payments for the unemployed.
Primary, secondary and special education services are provided by the department of education. Higher education and other training programs are also given funds to improve employment in the future. Approximately 3% of the government budget is used on education programs. Transportation spending which accounts for 3% of the budget is used to build roads and bridges. It also helps maintain airports in local areas and maintain waterways and barge canals.
The remaining budget is allocated to law enforcement, international activities, environment, homeland security, science, community development, agriculture and other miscellaneous programs. Each of these program utilizes on;y 1% of the federal taxes.
The main function of the government is figuring out priorities and making judgments. The challenge for the government is to reach agreement on a budget that serves the best interest of the nation and to make sure that federal taxes paid by the citizens are spent in the wisest possible way.
Ron Paul and Dennis Kucinich stand virtually alone in the House of Representatives in opposition to the latest round of sanctions the U.S. will impose on Iran in response to its unsubstantiated nuclear weapons program.
“When you put on sanctions on a country, it’s an act of war and that’s what this is all about,” said Paul. “I think this bill would be better named Obsession with Iran Act 2012,” he added.
Following political pressure by the American Israel Public Affairs Committee, sanctions were approved and now head to the White House for Obama’s signature. The sanctions target the Iranian oil industry and Chinese and Iraqi banks. Obama said in a statement that existing sanctions will be expanded “by making sanctionable the purchase or acquisition of Iranian petrochemical products.”
Iran is currently under six rounds of sanctions put in place by the United Nations Security Council.
“The sanctions have devastated the daily life of ordinary Iranian people by bringing the price of goods to a skyrocketing height, making the students abroad unable to get financial assistance from their parents in Iran, rendering it impossible for the private companies to do international transactions and making it extremely difficult for Iranians to get visa for traveling to foreign countries. The “smart sanctions” even include a ban on the importing of medicine and foodstuff from the other nations to Iran,” writes Kourosh Ziabari.
“This latest move by the U.S. Congress shows the extent to which Washington has become frustrated and now it is going to step up their pressure on Iranian civilians by preventing the country from importing agricultural products… Iran is a grain importer and the U.S. knows that and by creating obstacles in the way of grain exports to Iran, the U.S. is clearly committing crimes against humanity because it only affects ordinary Iranians who have got nothing to do with the country’s nuclear energy program,” Hamid Reza Emadi, an Iran-based political commentator, recently told Press TV.
The latest round of punitive measures came after presidential candidate Mitt Romney criticized the Obama administration for not moving against Iran in response to its nuclear program. “The regime in Iran is five years closer to developing nuclear weapons capability,” Romney said during a visit to Israel earlier in the week. “Preventing that outcome must be our highest national security priority.”
Paul dismissed the as of yet conclusively proven accusation that Iran is developing nuclear weapons. “The IAEA and our CIA said they are not on the verge of a nuclear weapon. It is so similar to what we went through in the early part of this last decade, when we were beating the war drums to go to war against Iraq. And it was all a façade. There was no danger from Iraq,” he said.
Article written by Kurt Nimmo
August 3, 2012
Filed under War by
Last week the House of Representatives overwhelmingly passed my legislation calling for a full and effective audit of the Federal Reserve. Well over 300 of my Congressional colleagues supported the bill, each casting a landmark vote that marks the culmination of decades of work. We have taken a big step toward bringing transparency to the most destructive financial institution in the world.
But in many ways our work is only beginning. Despite the Senate Majority Leader’s past support for similar legislation, no vote has been scheduled on my bill this year in the Senate. And only 29 Senators have cosponsored Senator Rand Paul’s version of my bill in the other body. If your Senator is not listed at the link above, please contact them and ask for their support. We need to push Senate leadership to hold a vote this year.
Understand that last week’s historic vote never would have taken place without the efforts of millions of Americans like you, ordinary citizens concerned about liberty and the integrity of our currency. Political elites respond to political pressure, pure and simple. They follow rather than lead. If all 100 Senators feel enough grassroots pressure, they will respond and force Senate leadership to hold what will be a very popular vote.
In fact, “Audit the Fed” is so popular that 75% of all Americans support it according to this Rasmussen poll. We are making progress.
Of course Fed apologists– including Mr. Bernanke– frequently insist that the Fed already is audited. But this is true only in the sense that it produces annual financial statements. It provides the public with its balance sheet as a fait accompli: we see only the net results of its financial transactions from the previous fiscal year in broad categories, and only after the fact.
We’re also told that the Dodd-Frank bill passed in 2010 mandates an audit. But it provides for only a limited audit of certain Fed credit facilities surrounding the crisis period of 2008. It is backward looking, which frankly is of limited benefit.
The Fed also claims it wants to be “independent” from Congress so that politics don’t interfere with monetary policy. This is absurd for two reasons.
First, the Fed already is inherently and unavoidably political. It made a political decision when it chose not to rescue Lehman Brothers in 2008, just as it made a political decision to provide liquidity for AIG in the same time period. These are just two obvious examples. Also Fed member banks and the Treasury Department are full of former– and future– Goldman Sachs officials. Are we really to believe that the interests of Goldman Sachs have absolutely no effect on Fed decisions? Clearly it’s naïve to think the Fed somehow is above political or financial influence.
Second, it’s important to remember that Congress created the Fed by statute. Congress therefore has the full, inherent authority to regulate the Fed in any way– up to and including abolishing it altogether.
My bill provides for an ongoing, thorough audit of what the Fed really does in secret, which is make decisions about the money supply, interest rates, and bailouts of favored banks, financial firms, and companies. In other words, I want the Government Accountability Office to examine the Fed’s actual monetary policy operations and make them public.
It is precisely this information that must be made public because it so profoundly affects everyone who holds, saves, or uses US dollars.
By U.S. Rep. Ron Paul
Monday, July 30, 2012
Later this month Congress will have an unprecedented opportunity to force the Federal Reserve to provide meaningful transparency to lawmakers and taxpayers. HR 459, my bill known as “Audit the Fed,” is scheduled for a vote before the full Congress in July. More than 270 of my colleagues cosponsored the bill, and it has the support of congressional leadership. But its passage in the House of Representatives is only the beginning of the battle, as many Senators and the President still don’t see the critical need to have a national discussion about monetary policy.
The American public now senses that the Fed’s actions, especially since 2008, are enormously inflationary and will cause great harm to the American economy in the long run. They are beginning to understand what so many economists still don’t understand, which is that inflation is a monetary phenomenon, and rising prices are merely a symptom of that phenomenon. Prices eventually rise when the supply of US dollars (paper or electronic) grows faster than the available goods and services being chased by those dollars.
This fundamental truth has been thoroughly explained by Milton Friedman and many others, so today’s Keynesian economists have no excuse for their claims that “inflation is under control.” Ordinary Americans don’t need a PhD simply to look at the Fed’s balance sheet and understand the staggering amount of money creation that has occurred in recent years. They know it will have harmful consequences for all of us eventually.
I've spoken at length about inflation, and how Fed money creation is effectively a tax. Every dollar created out of thin air dilutes the value of the dollars in your pocket and your savings in the bank. But the truth is that we are only beginning to see the results of the Fed’s dramatic increase in the money supply. As former Fed Chair Alan Greenspan himself explained last week to Larry Kudlow, most of the dollar deposits created by the Fed via successive rounds of “quantitative easing” remain on the balance sheet of Fed member banks. Because of very rational economic fears, banks are not lending, businesses are not expanding, and individuals are shedding debt. So, the trillions of dollars created by the Fed since 2008 remained largely undeployed. When those dollars eventually make their way into the world economy, prices across all sectors of the economy are likely to rise dramatically.
The true evil of inflation is that newly created money benefits politically favored financial interests, especially banks, on the front end. Over time, however, the net result of monetary inflation is always the devaluation of savings and purchasing power. This devaluation discourages saving, which is the key to capital accumulation and investment in a healthy economy. Inflation also tends to hurt seniors and those living on fixed incomes the most.
For decades the Fed has operated without any meaningful oversight whatsoever, resulting in the loss of savings, loss of purchasing power, and loss of quality of life for all Americans. It causes individuals and businesses to make bad decisions, misallocating their capital because market signals have been distorted. It causes financial ruin by engineering the inevitable boom and bust cycles that so many erroneously blame on capitalism. And it does all this in secrecy, to the benefit of the financial and political classes. It is time to Audit the Fed, as a first step toward ending its unchecked power over our money and economic fortunes.