It looks like Congress managed cobble together a budget deal that will fund government for the rest of the fiscal year.

At the last minute, lawmakers passed a short-term spending measure to fund the behemoth for another week, after substantively agreeing on a budget bill for the rest of the year.

Good work! That only took half of the year.

The proposed budget snips off about $38 billion in spending.

Lawmakers patted themselves on the back, calling themselves “courageous” for agreeing to the “biggest cuts in history.”

“Both sides have had to make tough choices.  But tough choices is what this job’s all about,” Sen. Harry Reid said.

Truth is, Congress just kicked the can down the road a little further and put off making any actual tough decisions until the next time around. They couldn’t even agree to defund Planned Parenthood, a no-brainer when you’re functionally broke.

And herein lies the problem – our so-called leaders can’t bring themselves to behave as if a problem actually exists. Few politicians have the guts to take the kind of action any half-witted family takes when faced with the prospect of spending more money that it takes in.

Here’s a little perspective.

According to the Treasury Department, the federal government spent $1.0528 trillion during the month of March – that’s trillion with a T – a staggering eight times more than it took in.

That’s like a family netting $2,000 per month spending $16, 000. It doesn’t take an accountant to figure out that kind of overspending represents a significant problem. Heck, you don’t even need to stay at a Holiday Inn Express to comprehend the looming fiscal disaster.

Clearly, that kind of deficit requires a significant change in spending; the kind of change in spending that hurts. The family can’t just switch from ordering steak to ordering salad at the nice restaurant. It must quit going to restaurants. Any restaurants. Period.

But lawmakers – indeed many Americans – can’t even bring themselves to make superfluous cuts in spending.

That’s because when it comes time to actually wield the budget axe, everybody suddenly believes their program “vital.”

Take the press release issued on behalf of the Wolf Creek National Fish Hatchery in Kentucky. The president’s budget planned proposed eliminating funding for the National Fish Hatcheries. The Wolf Creek hatchery operates on an annual budget of about $907,000 of federal tax dollars every year.

“This would be a needless monumental loss to the county and state,” Jeanie Schureman said in the release.

She goes on to justify the existence of the fish hatchery program, pointing out its income generation.

“A return of more than $53 for every tax dollar spent to operate the hatchery,” Schureman said.

She needs an economics lesson.

The fact that fish hatcheries need a tax subsidy to operate proves them an inefficient allocation of resources. If fish hatcheries really constituted a money-making opportunity, an enterprising private individual or entity would undoubtedly step in. That $907,000 dollars actually represents capital diverted from more economically viable activities to hatching fish. While it may create $53 for every dollar spent, that dollar spent in a market driven activity would undoubtedly yield far more.

Not to say fish hatching doesn’t benefit somebody. Perhaps many somebodies. But all too often, we only look at the visible benefits and fail to consider the less easily recognizable costs of government programs. While certain segments of the population reap the rewards, the nation as a whole loses out.

The reapers call the programs “vital.” The general public buys into the sob story. And the government keeps on spending. And spending. And spending.

Economic realities aside, a bigger issue exists.

Vital or not, the federal government lacks the constitutional authority to fund fish hatcheries.

In fact, the federal government lacks the constitutional authority to fund a vast majority of the things it funds. The framers intended the states to retain authority on such internal policies.

James Madison wrote, “The powers reserved to the several States will extend to all objects which, in the ordinary course of affairs, concern the lives, liberties and properties of the people, and the internal order, improvement and prosperity of the State.”

If Kentuckians really believe fish hatcheries vital, the state can set that priority and fund them. And some poor schmuck in Texas doesn’t have to bear the cost.

The federal government dug its fiscal hole with a backhoe powered by constitutional usurpation. The path back lies in limiting the fed to its constitutionally prescribed role.

This will require pain, sacrifice and time. We didn’t dig the hole in a day. It took over 75 years of ever-expanding government. It will require that Americans reject the notion that federal spending is “vital.” And it will require us to shed the notion that the solution to every problem lies among the marbled monuments in Washington D.C.

The stark reality is that the United States is functionally bankrupt. While we may like our various federally funded programs, and we may even personally reap the benefits, we can’t afford them.

We never could.

That’s why the framers sought to limit the power of the federal government. They understood bigger is generally badder.

It’s time to shrink the behemoth.

Tem·po·rar·y – an adjective meaning lasting, used, serving, or enjoyed for a limited time. Derived from the Latin tempora rius, from tempus, tempor-, time.  Synonyms include temporary, acting, ad interim, interim, provisional. Antonym is permanent.

Governor Rendell continues to press for a temporary, 16 percent increase in the Personal Income Tax (PIT), which he argues is the state’s “best option” to balance the state budget.

He says a PIT increase wouldn’t be as bad since roughly half of Pennsylvania households would not pay it. For the half that would end up footing the tax bill, the Governor says the increase would be “less than $5 per week.”

Milton Friedman said:  “Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay.”

Although $5 may not seem a lot to the Governor, this “temporary tax” adds up to $20 a month, or $240 a year – money I am sure individuals would rather spend elsewhere.

From a look at the definition, “permanent” is an antonym of “temporary;” that is exactly what has become of other “temporary” tax increases throughout Pennsylvania history.

The most famous (or infamous) temporary tax is the 1936 Johnstown Flood Tax.  Enacted as a 10 percent tax on liquor, the toll was set to expire May 31, 1937.  Over the years, the sunset date was extended numerous times until the tax was made permanent in 1951.  The current rate is 18 percent.

A year prior to the Johnstown Flood Tax, the Cigarette Tax was enacted as another emergency tax of 0.1 cent per cigarette. It became permanent in 1951, and the current rate is 6.75 cents per cigarette.

Other “temporary” taxes include the Realty Transfer Tax – enacted in 1951 as a 1 percent temporary tax. The tax was made permanent in 1961 and the rate remains at 1 percent.

The Corporate Net Income Tax (CNI) was first imposed in 1935 at a rate of 6 percent.  The rate “temporarily” was raised in 1977 to 10.5 percent, which was made permanent in 1982.  In 1991, the rate reached a high of 12.25 percent, and in 1995, lowered to its current rate of 9.9 percent.

The Sales and Use Tax was enacted in 1953, and eventually evolved into support for public education.  The tax started at 1 percent and currently is at 6 percent. The initial 6 percent imposition was also to be temporary until 1969, however, later that year the 6 percent was made permanent. Philadelphia and Allegheny County impose another 1 percent on purchases in their jurisdictions.

The Personal Income Tax (PIT) was imposed in 1971 at 2.3 percent.  Throughout the years, the rate has varied and some increases automatically sunsetted.  The PIT reached its current high in 2003 when Governor Rendell raised the rate to its current 3.07 percent.

As you can see, temporary taxes are rarely temporary and higher taxes are simply no good for Pennsylvania’s future or economic recovery. We must get government spending under control and have additional choices other than raising taxes – even if only “temporary.”

Mike Folmer [send him email] of Lebanon, Pennsylvania is a Pennsylvania State Senator who represents the 48th Senate district, which includes all of Lebanon County and portions of Berks, Chester, Dauphin and Lancaster Counties.

In 1819 U.S. Supreme Court decision “McCullough v. Maryland,” Chief Justice John Marshall wrote, “An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation.”

Today, 190 years later, Pennsylvania Governor Ed Rendell has called for a 16 percent increase in the Personal Income Tax, saying, “The simple truth is we have no good choices. There are no shortcuts out of this crisis, no magic bullets, no painless path out of this morass. We can do the easy thing for the moment or the right thing for Pennsylvania’s future. The fairest plan is to spread the pain across the board, and let our economic recovery begin.”

I disagree higher taxes are good for Pennsylvania’s future or economic recovery and believe we have additional choices other than raising taxes.

Our nation was founded because Americans were upset about taxes.  The colonists were angry their government spent their money without giving them a say.  Patrick Henry gave the rallying cry, “no taxation without representation.”

What would our Founding Fathers feel about our nation today?   While we have taxation with representation, we certainly are taxed…a lot. The federal government spends trillions (and incurs trillions in additional debt) and states spend billions; despite which level of government (federal, state, county, municipal, or school district) spending you refer to, it is all taxpayer money – your money.

Regardless if you advocate for larger government or smaller government, one thing is certain – government is getting bigger and the private sector is getting smaller, particularly in Pennsylvania.  This certainly was not the vision of Founding Fathers like Thomas Paine, who said, “that government is best which governs least.”

Governor Rendell said his proposed tax increase will “only” cost taxpayers a few dollars each week.  He also said the burden will not fall upon those least able to pay, and insists the increase will be “temporary” (hopefully, more temporary than the Johnstown Flood Tax of 1936).

How we spend the people’s money – your money – does matter.  Taxes should always be the last resort – especially during troubled economic times. People are hurting, jobs are being lost, and the future is uncertain.  Government is the only entity that seems to grow and ask for more when money is tight.

We should not – and we cannot – forget the principles on which our nation was founded:  fair taxes, transparency in the expenditure of those dollars, and recognition that those who pay the bills should not be expected to pay more.  It’s your money.  Government needs to live within its means and not expect any more from you when they don’t.

Mike Folmer [send him email] of Lebanon, Pennsylvania is a Pennsylvania State Senator who represents the 48th Senate district, which includes all of Lebanon County and portions of Berks, Chester, Dauphin and Lancaster Counties.

“Live Free or Die” is the title of author and columnist Mark Steyn’s speech at Hillsdale College, reproduced in Imprimis (April 2009), a Hillsdale publication that’s free for the asking. Canadian born, now living in New Hampshire, Steyn has had firsthand experience with socialist tyranny in his home country that is rapidly becoming a part of America.

Commenting on one of his run-ins with Canada’s human rights commissions, Steyn points how it might seem bizarre to find the progressive left making common cause with radical Islam. One half of that alliance is pro-gay, pro-feminist secularists and the other half is homophobic, misogynist theocrats.

Steyn argues what they have in common overrides their differences, namely, “Both the secular Big Government progressives and the political Islam recoil from the concept of the citizen, of the free individual entrusted to operate within his own societal space, assume his responsibilities, and exploit his potential.”

I doubt whether there are many Americans who think Congress has either the right or competency to choose where they live, what clothes they wear or what cars they drive. Yet many Americans stand ready to allow Congress to decide what doctors they go to and what treatments they receive. We forget that once we have government-sponsored health care, it can be used to justify almost any restraint on liberty. That’s the justification behind helmet and seatbelt laws.

Britain is well along the road toward totally controlling health care. Steyn says, “Under Britain’s National Health Service, for example, smokers in Manchester have been denied treatment for heart disease, and the obese in Suffolk are refused hip and knee replacements. Patricia Hewitt, the British Health Secretary, says that it’s appropriate to decline treatment on the basis of ‘lifestyle choices.’” Steyn adds, “Smokers and the obese may look at their gay neighbor having unprotected sex with multiple partners, and wonder why his ‘lifestyle choices’ get a pass while theirs don’t. But that’s the point: Tyranny is always whimsical.”

In most of the developed world, the government has gradually taken over many of the responsibilities of adulthood from health care, childcare, care of the elderly and other responsibilities formerly seen as individual or family.

Nobel Laureate economist Paul Krugman suggests that American conservatives preaching “family values” is hypocrisy while Europeans live it. On the continent, Krugman says, “Government regulations actually allow people to make a desirable tradeoff — to modestly lower income in return for more time with friends and family.” Steyn insightfully observes, “As befits a distinguished economist, Professor Krugman failed to notice that for a continent of ‘family friendly’ policies, Europe is remarkably short of families. While America’s fertility rate is more or less at replacement level — 2.1 — seventeen European nations are at what demographers call ‘lowest-low’ fertility — 1.3 or less — a rate from which no society in human history has ever recovered. Germans, Spaniards, Italians and Greeks have upside-down family trees: four grandparents have two children and one grandchild.”

Steyn asks, “How can an economist analyze ‘family friendly’ policies without noticing that the upshot of these policies is that nobody has any families?” My answer to Steyn’s questions is: the kind of economist that looks at the seen and ignores the unseen.

Mark Steyn provides us with a historical tidbit. “Live Free or Die,” which graces New Hampshire’s license plate, are the words of John Stark, New Hampshire’s Revolutionary War hero. He uttered those words decades after the War when he was 81 years old, the complete sentence being: “Live free or die: Death is not the worst of evils.”

Steyn says these words should not be interpreted “as a battle cry: We’ll win this thing or die trying, die an honorable death. But in fact it’s something far less dramatic: It’s a bald statement of the reality of our lives in the prosperous West. You can live as free men, but, if you choose not to, your society will die.”

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2009 CREATORS SYNDICATE, INC.

Last week, General Motors finally declared bankruptcy.  Many in government thought $20 billion in taxpayer dollars would save the company, but as predicted, it only postponed the inevitable.  The government will dump another $30 billion into GM and take a 60 percent controlling interest for it.

Public officials are now involving themselves in tactical business decisions such as where GM’s headquarters should move and what kind of cars it will build.

The promise that this is temporary and will eventually be profitable is supposed to ease the American people into accepting this arrangement, but it is of little comfort to those who remember similar promises when the American taxpayers bought Amtrak.  After three years, government was supposed to be out of the passenger rail business.

40 years and billions of dollars later, the government is still operating Amtrak at a loss, despite the fact that they have created a monopoly by making it illegal to compete with Amtrak.  Imagine what they can now do to what is left of the great American auto industry!

In a truly free market, GM would get your money one way and one way only – by selling you a car you want, at a price you are willing to pay.  Instead, the government is giving public money to a private company in spite of the market signals it has been sending.

Throwing money at GM does not stop it from being an engine of wealth destruction; on the contrary, it simply gives it more wealth to destroy.

Had it been allowed to fail naturally, the profitable pieces of GM would have been bought up and put to good use by now.  The laid off employees would likely have found new jobs and all that capital would be in private hands, reinvested in companies that produce products demanded by consumers.  Instead, we are all poorer now.

Political pressure, rather than the rule of law, is deciding how to divide up the remains of GM.  The bondholders had billions in retirement savings invested in the company, and though they were entitled to nearly three times as much as the United Auto Workers, the bondholders were left with just a 10 percent stake compared to the union’s 17.5 percent stake.   For their 60 percent stake, taxpayers have a future of constant bailouts to look forward to.

Comingling public control of private business is known as fascism.  While today’s politicians may feel emboldened with all their new power, history will only repeat itself as all this collapses on itself.

It is the height of hubris for bureaucrats and politicians to attempt to control the market and the freewill of the American people.  In the end, the market always wins out.

Maybe one day future generations will wise up and allow free markets to function and thrive without the albatross of government around its neck.  For now, it looks like those in charge have not learned the lessons of the past, and have doomed us to repeat those mistakes once again.

Ron Paul is a republican member of Congress from Texas.

The “federal” government, particularly the executive branch, can do almost anything it wants. The limits are few, and those that survive can often be gotten around through chicanery. Much of what government does is out of public view, thanks to off-budget accounting and other dubious methods that would get the rest of us prosecuted.

Even if the average person had the time to monitor what government is up to — a tall order for sure — much of it is so esoteric for a layman as to be nearly incomprehensible. He’d have to give up his job and master several disciplines in order to do a proper job. That puts a new light on the term “educated voter.”

On the other hand, trusting one’s representatives — “misrepresentatives” is a more precise term — to watch over things is pointless: They don’t read the bills they vote on; deal-cutting is a higher priority anyway.

In recent years they’ve voted to bail out Wall Street banks, “stimulate” the economy, invade countries, and inflate the power of government to violate civil liberties—all without reading the relevant materials. (Not that the executive always waited until Congress blindly passed the requested authorization.)

By what criterion are we entitled to call this “representative government”? Periodic elections are a necessary condition for that label to apply, but they are hardly a sufficient condition.

A government of self-defined powers is  hardly new in the United States; nor is it the monopoly of any one party. But it has accelerated in the last decade through the exploitation of fear: fear of economic calamity, fear of terrorism, fear of the unfettered market.

From the beginning, fear has propelled the growth of the state. H. L. Mencken saw this more clearly than most –“The whole aim of practical politics is to keep the populace in a continual state of alarm (and hence clamorous to be led to safety) by menacing them with an endless series of hobgoblins, all of them imaginary.” — and Robert Higgs has spent a career explaining it.

Using powers the origins of which predate the New Deal, government has now extended its tentacles to encircle the entire economy. Bureaucrats exercise wide-ranging discretion with, at best, murky authority.

The unaccountable Federal Reserve System creates money in order to buy not only government securities, but also “troubled” assets from investment banks and other favored firms. The FDIC now insures all bank debt, not just deposits, and guarantees government loans to hedge funds that buy the kinds of securities Treasury Secretary Timothy Geithner prefers.

The Treasury last fall asked for $700 billion for one purpose (buying worthless mortgage-backed securities) but uses it for other things instead, such as buying stock in banks and bailing out insurance and auto companies that have earned the right to fail.

As George Will writes, “TARP’s $700 billion, like much of the supposed ‘stimulus’ money, is a slush fund the executive branch can use as it pleases.” This points to another unsettling practice: congressional blank-check authorizations to the executive branch: “Here’s some money; do something good with it.” (Of couse it is not only in domestic policy that blank checks are handed out.)

All told, such government-run-amok financial undertakings have the hapless taxpayers on the hook for an amount of money rivaling the gross domestic product. The Fed has created trillions in funny money—portending a horrendous price inflation—and the current deficit is nearly half the entire budget.

When Congress is asked to rubberstamp executive activities — as occasionally it is — most of our misrepresentatives faithfully comply. The news media call this being “responsible.” Dissenters, such as those in the House last fall who voted down the first TARP bill, are stigmatized as fringe characters unworthy of serious attention, and quite possibly nihilists.

The Chrysler Intervention

The latest example of government run amok is the Obama administration’s interference with the bankruptcy of Chrysler. Under the administration’s plan the UAW will get 43 cents on the dollar and a majority of the stock shares, while secured nonbank bondholders are offered about 30 cents and have their contractual rights nullified.

When they balked in an attempt to fulfill their legal responsibilities to their investor clients, Barack Obama denounced them as greedy speculators. Where does the White House occupant get this authority? Does he know or care that he is engaged in the destruction of wealth? Does the public even wonder about these questions?

It is taken for granted that government can do whatever it wants so long as those doing it seem to be acting in good faith and aren’t benefitting too overtly. This trusting attitude is a far cry from the “jealousy” toward government that Thomas Jefferson prescribed for a free people.

Government has been exercising such power so long that people are accustomed to it. It’s normal. They don’t expect modest government in either domestic or foreign matters. If we think government runs amok in the economy, look at what it’s doing in Central Asia and the Middle East.

Foreign policy not only gives government great scope for unmonitored mischief, it also efficiently drains the taxpayers. Like domestic intervention, foreign intervention is madly expensive—not to mention dangerous to innocents and those only suspected of crime but not yet proved guilty. Yet many people  who are distrustful of carte-blanche power over domestic affairs apply a different standard to government’s powers in foreign matters.

It’s as though Foggy Bottom the Pentagon, and the CIA weren’t departments of the government — as though war,  intervention, and the resource-eating military budget had no effect on the marketplace. Freedom’s greatest advocates, including Adam Smith, Richard Cobden, and Frederic Bastiat, knew better. There could be no laissez faire at home and continuous war-making abroad.

Thus Rep. Ron Paul wisely writes, “We need to rein in our overseas empire, as quickly as possible. We need to bring our troops home, and get our economy back into the business of production, not destruction. The smartest thing we could do is admit we don’t know all the answers to all the world’s problems. If the new administration can take a closer look at real free trade and no entangling alliances, we would be much better off for it…. But unfortunately, it is not likely to happen.”

So those who understand had better get to work.

Sheldon Richman is the editor of The Freeman and “In brief.” He is a contributor to The Concise Encyclopedia of Economics (“Fascism”).

Recently I have grown deeply concerned with the potential power grab by the central government over credit card interest rates. In a time of weak economic conditions in many industries and the overall economy in general, the White House and Congress assume they have the power and responsibility to lower credit card rates and greatly increase regulation over the industry, in order to protect the consumer.

Prior to 1937, Congress’s role in the regulation of commerce was quite simply defined as the “movement of goods” between states, and put most production and manufacturing outside of the regulatory power of Congress. This definition has essentially been abandoned ever since the Supreme Court, in 1937, upheld an act allowing Congress to regulate many aspects of labor through the National Labor Relations Board.

Before this case, activities within the states were left strictly to the states to regulate and it was out of the boundaries of the federal government to intervene. Today, this description of regulation would be laughed at by the bureaucrats in Washington arguing to regulate practically anything that the government doesn’t already have its hands on.

The issue of whether credit card rates and businesses should be regulated is a viable discussion. Traditionally, and constitutionally, this is an issue that should absolutely be left to the states. It is a local issue and not an interstate issue, thus taking it out of Congress’s regulation jurisdiction. At least, this is what the case would have been before 1937 when a more clear interpretation was used to define the Commerce Clause in the Constitution.

The troubling aspect of the new potential regulations of credit cards is that it is the Federal Reserve Board who is making many of the new decisions and regulations limiting credit-rate increases, set to take effect in 2010. Now, think for a moment.

If it used to be out of the constitutional boundaries of Congress to regulate local and state matters like credit card rates, where on earth does the Federal Reserve get the constitutional authority to set and carry out these regulations? It is troubling that the Constitution can be trampled on this much without so much as a peep asking where the constitutional authority for these powers is derived from.

The issue of whether these regulations are needed or worthwhile is one thing. But rough problems today will easily turn into a disaster tomorrow if there is no check on government. Today we are seeing a federal government with few boundaries or concern for following the Constitution. Our government was created under the Constitution, and the federal government and Congress specifically were given very specific and limited powers. This was generally respected for the first 150 years of our nation’s history.

Credit card regulation may certainly be beneficial on a state level. If the regulation is needed, constitutionally it is clearly and definitively a decision to be debated and made by the states, not the federal government or Federal Reserve. Currently not only is state power being trampled on, but Congress has turned and continues to turn the responsibility of the states over to a closed-off, powerful, independent agency whose very constitutionality itself is questionable.

In today’s time of calls for more federal regulation, intervention, and control over finance, it is hard to imagine a time when Congress’s role in commerce was so narrowed down to regulating the movement of goods between states. It isn’t too unlikely that the Federal Reserve will gain even more regulatory powers over the financial industry over the next several years. What’s ironic is that it is all being carried out in the name of protecting the consumer.

It is absurd to think that allowing the Federal Reserve to carry more regulatory responsibility will help consumers. They have no constitutional authority to regulate, the operators of the Fed are not elected by the people, and the primary operations of the Fed are off-limits to audits. You cannot tell me that this group can adequately protect consumers and not pander to the banking interests who run the agency.

True regulatory representation of the consumer can only be achieved through the states. If it isn’t the individuals who decide the regulations, it isn’t right to call it consumer protection, is it? It’s a head scratcher to think that the same organization who has destroyed the value of our currency (which hits the lower and middle class hardest) can stand up for consumers with a straight face.

It is largely a lack of understanding and respect for the Constitution that got us into this mess in the first place. Many in government either do not understand, or simply ignore, the restraints placed on Congress’s regulatory power and the 10th Amendment’s clear language bringing issues not given to the federal government back to the states and the people.

If it is consumers who you want to protect, all you have to do is follow, respect, and protect the Constitution. Through their local, state, and own regulatory power, the free individuals of this country can do the rest.

“If the provisions of the constitution be not upheld when they pinch as well as when they comfort, they may as well be abandoned.” — Former Associate Justice of the Supreme Court George Sutherland

David Kretzmann is a remarkably precocious and insightful teenage investor who has been investing in individual stocks since July 2005. His latest commentary on finance, the economy, government and more can be found on his website, http://davidkretzmann.com

This week the House is expected to pass an $825 billion economic stimulus package.  In reality, this bill is just an escalation of a government-created economic mess.   As before, a sense of urgency and impending doom is being used to extract mountains of money from Congress with minimal debate.  So much for change.  This is déjà vu.  We are again being promised that its passage will help employment, help homeowners, help the environment, etc.

These promises are worthless. 

This time around especially, Congress should know better than to pass anything of this magnitude without first reading the fine print.  There a many red flags that I have found in this bill.

At least $4 billion is allocated to expanding the police state and the war on drugs through Byrne grants, which even the Bush administration opposed, and the COPS program, both of which are corrupt and largely ineffective programs.

To help Big Brother keep a better eye on us and our children, $20 billion would go towards health information technology, which would create a national system of electronic medical records without adequate privacy protection.  These records would instead be subject to the misnamed federal “medical privacy” rule, which allows government and state-favored special interests to see medical records at will.  An additional $250 million is allocated for states to nationalize individual student data, expanding Federal control of education and eroding privacy.

$79 billion bails out states that haphazardly expanded their budgets during the bubble years, but refuse to retrench and cut back, as their taxpayers have had to, during recession years.

$200 million expands Americorps.  $100 million goes to “faith-and-community” based organizations for social services, which will further insinuate the government into charity and community service.  Private charities are much more efficient and effective because they are directly accountable to donors, while public programs tend to get rewarded for failure. With its money, the Federal Government brings its incompetence and its whims, while creating foolish dependence.  This is sad to see.

Of course the bill is rife with central planning projects.  $4 billion for job training, much of which will be used to direct workers into “green jobs”.  $200 million to “encourage” electric cars, $2 billion to support US manufacturers of advanced batteries and battery systems, which is yet another function of government I can’t find in the Constitution. Not to mention $500 million for energy efficient manufacturing demonstration projects, $70 million for a Technology Innovation Program for “research in potentially revolutionary technologies” in which government, not supply and demand, will pick winners and losers.  $746 million for afterschool snacks, $6.75 billion for the Department of Commerce, including $1 billion for a census.

This bill delivers an additional debt burden of $6,700 to every American man, woman and child.

There is a lot of stimulus and growth in this bill – that is, of government.  Nothing in this bill stimulates the freedom and prosperity of the American people.  Politician-directed spending is never as successful as market-driven investment.  Instead of passing this bill, Congress should get out of the way by cutting taxes, cutting spending, and reining in the reckless monetary policy of the Federal Reserve.

Ron Paul is a republican member of congress from Texas.

The stock market rises and then crashes. Housing prices soar and then plummet. The Federal Reserve causes these booms and busts by constantly expanding and contracting the supply of money and credit.

Credit expansion by the Federal Reserve increases the demand for producer assets and investment instruments. This causes bubbles in things like stocks and housing. When the Fed then contracts credit to avoid systemic price inflation the asset bubbles burst.

This is the history of the Federal Reserve — booms and busts, mixed with episodes of economic stagnation and high inflation like the 1970s.

Even before the Fed was created in 1913 government manipulation of money and credit caused repeated bubbles and contractions. One big source of this mischief was government imposed exchange ratios between gold, silver, and the U.S. dollar. When these hardwired exchange ratios didn’t match reality, problems ensued.

It’s important to recognize that economic perfection isn’t possible. Investors will always make mistakes. But we would expect these mistakes to be randomly distributed throughout the economy, and occur at different times. What causes a bunch of investment mistakes to cluster in particular sectors at a specific time, causing systemic problems?

Only government has the power to impose universal conditions on the economy, from the top down, causing investment mistakes to cluster, like they have in the housing market. The government can do this by passing laws and creating programs that favor one type of investment over others, causing a boom in those sectors.

But the Federal Reserve, with its monopoly control over the supply of money and credit, is an even more powerful mechanism for causing investment errors to cluster.

We need to get off the Federal Reserve roller coaster. We need to end centralized top-down control of the money supply and interest rates. We need a true free market in money and banking. We must abolish the Federal Reserve.

Congressman Ron Paul has a bill to accomplish this. It’s called the “Federal Reserve Board Abolition Act,” and a national coalition called “End the Fed” is working to bring attention to this bill.

Please use our quick and easy Educate the Powerful System to ask your elected representatives to co-sponsor the “Federal Reserve Abolition Act” when Congressman Paul re-introduces it in this Congress.

The economic situation continues to deteriorate this week as past and future bailouts were discussed on Capitol Hill.  The debate was over the accountability of already disbursed TARP money, and on whether or not to release remaining funds.   Banks that had already been bailed out before are looking for more money to fill the black holes that are their balance sheets, warning that they are simply too big to fail.

However, whatever ‘devastating’ consequences these banks are dreaming up and pushing on Capitol Hill regarding their own collapse will be nothing compared to the collapse of our currency if we keep debasing it through these foolish bailouts.  It should be that they are too big to bailout.  The world will not come to an end without this or that bank.  The most troubling thing to me is this rhetoric that only government can save the economy, and must act.  This is so counter-productive.

We must ask ourselves what strengthens this country, and what weakens it.

Government is a monumental drag on this economy.  Government at all levels currently absorbs about 35-40 percent of GDP, which is still not enough for its voracious appetite. While productivity is already overtaxed, the government routinely spends more than it takes in and makes up for the shortfall by constantly borrowing or debasing our dollars through inflation.

It pains me to think of all the opportunities for productive economic growth we have given up simply because our government is super-sized instead of Constitution-sized.  There are just a few constitutionally sanctioned activities for government to engage in, but it is so overstretched with unconstitutional encroachments that what it is legitimately supposed to do, it does very badly.  And yet we are to believe the solution to our problems is to make government bigger.

On the contrary, government makes our problems bigger.  The central bank’s meddling with monetary policy led to overheated lending, and now massive defaults.  The government used manipulative tax policy to distort the housing market which has had many unintended consequences, and here we are.  Government is quick to enact and slow to correct bad policy.  Yet in spite of government’s failures, it flourishes and grows, thanks to the continual bailouts from the unwitting taxpayer.

Big government has been tried and has failed miserably.  What we need now is small government, and freedom.  We need the freedom to pull ourselves up by our own bootstraps again, as we traditionally do in this country.  But try to start a business or charity today, and you will understand how little economic freedom we really have left.

Freedom, not government, made this the land of opportunity.  Freedom laid the foundation that catapulted us to becoming the strongest economic power in the world.  The American people are strong and capable.  We can pull ourselves out of this mess.  All we need is for the nanny-state to get out of the way and allow us to do it.

Freedom is our strength, government is our weakness.  Only by recognizing this and unleashing our strengths will we solve the problems we face today.

Ron Paul is a republican member of congress from Texas.