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Why will the government do nothing but guarantee large deficits?

*Texas Straight Talk, by Congressman Ron Paul, February 1, 2010

‘Last week politicians in Washington made a few things clear about how they really feel about the state of the union.  First, they are beginning to hear the growing discontent with the size and scope of government and the broken promises that keep piling up.  Certain events in Massachusetts recently made that statement loud, clear and unavoidable.  In the face of those events, the powers that be made the determination that some populist rhetoric was in order, and the idea of a spending freeze in Washington was proposed, albeit with several caveats.  These caveats to the proposed spending freeze ensure that we are not at any real risk of actually doing anything about spending.

First of all is timing.  It wouldn’t go into effect until 2011, which allows plenty of time to increase spending levels quite a bit before they are frozen.  If the administration really understood and cared about our spending problems they would not freeze spending a year from now, but cut spending immediately and significantly.  But, spending cuts almost never happen in Washington, and they are not likely now or a year from now – if the politicians have anything to say about it.

The second caveat is the huge areas of the budget that are shielded from this freeze.  The entire State Department budget is exempt, as are all entitlements, all military industrial spending and almost all foreign aid.  Fully 7/8 of federal spending is excluded from this freeze, and some areas to be frozen were actually set to decrease, which means a freeze actually guarantees a higher level of spending.”


*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.

Monex Bullion Investor