Why should individuals now create their own personal Gold Standard?
*Texas Straight Talk, by Congressman Ron Paul, June 11, 2012:
''The CBO Sees the Economic Cliff Ahead
Last week the Congressional Budget Office (CBO) issued its annual
long-term budget outlook report, and the 2012 numbers are not
promising. In fact, the CBO estimates that federal debt will rise
to 70% of GDP by the end of the year -- the highest percentage since
World War II. The report also paints a stark picture of
entitlement spending, as retiring Baby Boomers will cause government
spending on health care, Social Security, and Medicare to explode as a
percentage of GDP in coming years.
While the mainstream media correctly characterized the CBO report as
highly pessimistic, they also ignored longstanding errors of
methodology in CBO estimates. And those errors tend to support
arguments for higher taxes and government spending, when in fact
America needs exactly the opposite.
As Paul Roderick Gregory explained in a recent Forbes column, CBO has
always applied wrongheaded assumptions inherent in Keynesian economics
when forecasting future deficits - no matter how many times both
history and economic theory have proven such assumptions
incorrect. In particular, CBO seems wedded to two enduring
Keynesian myths: First, that higher taxes necessarily increase federal
revenue and have no negative effect on the economy; and second, that
lower government spending hurts the economy. Neither is true, of
course.
CBO also fails to factor in unexpected wars and expensive foreign
entanglements, and we should not assign too much validity to predictive
models based on peace. Judging from the actions and rhetoric
coming from both parties in Washington, new military entanglements in
Syria and Iran may well spike military spending in coming years.
Despite these sobering budget realities, the CBO report suggests that a
solution is possible with merely a few minor adjustments in the way
Congress handles economic issues. But what we need are not minor
adjustments, but rather a fundamental shift in our philosophy of
government. If we could come to our senses about the proper
role of government in America, and what level of government
interference is appropriate in a free economy, we would quickly find
that there is no reason for government to spend so much, borrow so
much, and tax so much.
If we simply allowed markets to work free of governmental or Federal
Reserve interference, bad debt would be liquidated relatively quickly
and malinvestment would be curtailed. Scaled-back regulations
would encourage businesses to expand. Lower taxes would jump start
investment and spur job creation.
This is not rocket science, it is Economics 101. All it would
take is for government to get out of the way. There would be some
short term pain, of course, but only by allowing the bubble to burst
and bad debt to liquidate can we ever hope to begin building a real
economy again.
The CBO report was alarming to most simply because they know neither
party will take the steps necessary to avoid eventual fiscal
calamity. Instead, despite their rhetoric, both parties want to
maintain the fantasy that 'deficits don���t matter.' But the CBO
report, combined with what is happening in Greece and the European
Union, should finally make the undeniable case that economic realities
apply even to industrialized first world economies.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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