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Are congressional spending habits at the root of the economic problems?

*Texas Straight Talk, by Presidential Candidate Ron Paul, March 18, 2008

“House Democrats recently adopted a budget with massive tax hikes, many of which are directed at those Americans who can least afford them.  By allowing the Bush tax cuts to expire in 2010, this budget will raise income taxes not only on those in the highest income brackets, but raises the lowest bracket from 10% to 15% as well.  Estates would again be taxed at 55%.  The child tax credit would drop from $1000 to $500.  Senior citizens relying on investment income would be hurt by increases in dividend and capital gains taxes.  It’s not just that the Democrats want to raise taxes on the rich.  They want to raise taxes on everybody.

The problem is, policing the world is expensive, and if elected officials insist upon continuing to fund our current foreign policy, the money has to come from somewhere.   The wars in Iraq and Afghanistan have already cost us over $1 trillion.  The Democrats’ budget gives the President all the funding he needs for his foreign policy, so one wonders how serious they ever were about ending the war.  While Democrats propose to tax and spend, many Republicans aim to borrow and spend, which hurts the taxpayer just as much in the long run.

Supporting a welfare state is expensive as well.  Over half of our budget goes to mandatory entitlements.  The total cost of government now eats up over half of our national income, as calculated by Americans for Tax Reform, and government is growing at an unprecedented rate.  Our current financial situation is completely untenable, and the worst part is, as government is becoming more and more voracious, the economy is shrinking.

The bottom line is that Washington has a serious spending addiction.  While both parties debate how to raise the revenue, both parties seem happy to spend over $3 trillion of your money in various ways. While some in Washington criticize the war in Iraq, very few are criticizing the interventionist mindset that got us into the war in the first place.  Many so-called ‘Iraq War critics,’ criticize this administration rather than truly opposing the decades old policies that led to war.  They claim they will eventually get the troops out of Iraq, but the danger is that they simply plan to move them around to other countries, not bring them home.  The American people want peace.  Minding our own business is the best way to achieve it.  Not only is it also a whole lot cheaper, but free trade and friendship with other countries benefits all involved.

This spending spree is exactly the wrong policy for an economy on the brink of recession.”

*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.