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Will politicians continue, or even increase, deficit spending?

*Texas Straight Talk, by Congressman Ron Paul, April 14, 2014

”Anyone watching last week’s debate over the Republican budget resolution would have experienced  deja vu, as the debate bore a depressing similarity to those of previous years.  Once again, the Republicans claimed their budget would cut spending in a responsible manner, while Democratic opponents claimed the plan’s spending cuts would shred the safety net and leave vital programs unfunded.  Of course, neither claim is true.

The budget does not cut spending at all, and in fact actually increases spending by $1.5 trillion over ten years.  The Republicans are using the old DC trick of spending less than originally planned and calling that reduced spending increase a $5.1 trillion cut in spending.  Only in DC could a budget that increases spending by 3.5 percent per year instead of by 5.2 percent per year be attacked as a ‘slash-and-burn’ plan.

The budget also relies on ‘dynamic scoring.’  This trick is where the budget numbers account for increased government revenue generated by economic growth the budget will supposedly unleash.  The claims are dubious at best.  Of course, reducing government spending will lead to economic growth.  But real growth requires real cuts, not this budget’s phony cuts.”


*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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