A speech before the US House of Representatives on January 19, 2011.

Mr. Speaker, I am pleased that the Constitution has received a lot of attention in recent weeks, thanks to the tea party movement. It goes without saying that Members of Congress should have read the Constitution many times, and we should continue to study it.

Citing the particular clause of the Constitution that authorizes newly introduced legislation is a reasonable suggestion, yet in reality it will do little to restrain unconstitutional growth of Federal Government. We have had such rules in the past and no benefit came of it.

The laws that are passed reflect the preferences of those in charge, who promote their personal agenda. For too long that agenda has expanded government at the expense of personal liberty, regardless of which political party was in charge. Generally this trend was supported by voters, who rewarded most Members of Congress with reelection.

For many of us, this expansion of government clearly violated the Constitution, yet it was always argued that the program somehow conformed to that “living” document.

By misinterpreting the general welfare clause, the interstate commerce clause, and the “necessary and proper” clause, Congress has justified every conceivable expansion of the Federal Government. Congress also has misinterpreted the 14th Amendment and legislated as though it had repealed the 10th Amendment. Sadly, Congress has also systematically abdicated its prerogatives and responsibilities to the executive branch over many decades.

Too many people, in and out of Congress, grew up being taught that the Constitution was malleable. This has allowed judicial, legislative, and executive flexibility to make the Constitution “a modern living document.” Though the authors allowed for “flexibility” through the amendment process, this process has been ignored for the sake of speed and convenience.

As a result, the Constitution now has little meaning since most Members pay only lip service when taking their oath to obey it. But I am encouraged by our growing grassroots interest in the Constitution, especially among the younger generation. I am glad Congress is becoming aware of it.

Our Constitution should be viewed as law, and Members of Congress should be expected to follow the rule of law. But a document is just that, and it is only as good as the character of those who represent us and promise to obey it. Distorted interpretations come easily when the goal is opposite of what the original authors intended and what the plain text provides.

If true liberty is not our goal, persistent efforts to rationalize misinterpretations and circumvent the Constitution will continue. Without men and women of character in Congress, respect for the rule of law and a love of liberty, the Constitution becomes but a worthless piece of paper.

Celebrating the Constitution without this understanding will do nothing to restore the greatness of America. Simply praising the document distracts from the need for Members to gain the courage to resist special interests; political self-interests; emergency needs in times of crisis; fear-based economic myths; and the persistent temptation to seek security over liberty while ignoring personal responsibility and self-reliance.

Providing instruction in the Constitution for staff and/or Members begs the question: Who will be the teacher?

I wonder, will this welcomed renewed interest in the Constitution lead to a healthy reassessment of all of our policies? Will there be no more wars without an actual congressional declaration? Will the Federal Reserve Act be repealed? Will only gold and silver be called legal tender? Will we end all of the unconstitutional Federal departments, including the Department of Energy, Education, Agriculture, Commerce, Health and Human Services, Homeland Security, and Labor? Will the Patriot Act be repealed and all of the warrantless searches stopped? Will TSA be restrained or abolished?

Will the IRS’s unconstitutional collection powers end? Will executive and judicial quasi-legislative powers be ended? Will we end the Federal war on drugs? Will we end the Federal Government’s involvement in medical care? Will we end all of the Federal Government’s illusionary insurance programs? Will we ban secret prisons, trials without due process, and assassinations? Will we end our foreign policy of invasion and occupation?

For America to once again become the standard for a free society, our love of liberty and desire for peace must far surpass any public display of fidelity to the Constitution. We must first look to strong moral character, respect for the rule of law, and an understanding of the proper role of government in a free society.

Ron Paul is a republican member of congress from Texas. He is the author of many books, including End the Fed, The Revolution: A Manifesto, and the upcoming Liberty Defined: 50 Essential Issues That Affect Our Freedom

The following article, “Ending the Fed from the Bottom Up,” by Dr. William Greene, was originally published here at the Tenth Amendment Center on 04-11-10. We’re proud to present it here again on this sad, but historic anniversary – with hopes that you will take action today to push your state to consider the Constitutional Tender Act, and start the process of bringing the Federal Reserve System to it’s much-needed demise.

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Ending the Fed From the Bottom Up
by William Greene

Since its inception, the U.S. Federal Reserve’s monetary policies have led to a decline of over 95% in the purchasing power of the U.S. dollar. As a result, there have been several attempts to curtail or eliminate the Federal Reserve’s powers (for example, the efforts of Rep. Louis T. McFadden in the 1930s; the efforts of Rep. Wright Patman in the 1970s; the efforts of Rep. Henry Gonzalez in the 1990s; and the efforts of Rep. Ron Paul since the 1990s); however, none have proven successful to date, due mainly to the constraints of strong political opposition at the national level.

In contrast to these attempts at the national level, a paper I recently presented at the Mises Institute’s “Austrian Scholars Conference” proposes an alternative approach to ending the Federal Reserve’s monopoly on money: the “Constitutional Tender Act,” a bill template (first introduced by Georgia State Rep. Bobby Franklin) that can be introduced in every State legislature in the nation, returning each of them to adherence to the U.S. Constitution’s “legal tender” provisions of Article I, Section 10.

Such a new tactic could achieve the desired goal of abolishing the Federal Reserve system by attacking it from the “bottom up” – “pulling the rug out from under it,” by working to make its functions irrelevant at the State and local level. Under this Act, the State would be required to only use gold and silver coins (or their equivalents, such as checks or electronic transfers) for payments of any debt owed by or to the State (e.g., taxes, fees, contract payments, etc.).

All contracts, tax bills, etc. would be required to be denominated in legal tender gold and silver U.S. coins, including Gold Eagles, Silver Eagles, and pre-1965 90% silver coins. All State-chartered banks, as well as any other bank that is a depository for State funds, would be required to offer accounts denominated in those types of gold and silver coins, and to keep such accounts segregated from other types of accounts such as Federal Reserve Notes.

Upon going into effect, the Constitutional Tender Act would introduce currency competition with Federal Reserve Notes, by outlawing their use in transactions with the State. Ordinary citizens of the State, being required to pay their State taxes in gold and silver coins, would find it necessary to open bank accounts in those denominations.

Businesses operating within the State, being required to pay their State sales taxes and license fees in gold and silver coins, would need to do the same; and in order to acquire such coins, they would begin to offer their goods and services in “dual currency” denominations, where customers could choose to pay in Federal Reserve Notes (which would still be necessary to pay Federal fees and taxes) or gold and silver coins (including checks and debit cards based on bank accounts denominated in such coins). Customers, having found the need to open such accounts in order to deal with the State, would be able to engage in commerce using those accounts.

Over time, as residents of the State use both Federal Reserve Notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve Notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve Notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the State’s treasury, an influx of banking business from outside of the State (as citizens residing in other States carry out their desire to bank with sound money), and an eventual outcry against the use of Federal Reserve Notes for any transactions.

At that point, the Federal Reserve system will have become unwanted and irrelevant, and can be easily abolished by the people’s elected Representatives in Washington, D.C.

I believe this “bottom up” approach to ending the Fed would have a greater likelihood of success than a “top-down” approach for a number of reasons. First, it is decentralized: rather than facing concerted political opposition at a single Federal level, it attacks the issue at the State level, where strategies and tactics can be adapted to the types and amount of political opposition they encounter.

Second, it is diffused: it can be attempted in any number of States, which can cause the opposition to spread its resources much more thinly than would be necessary at the Federal level. Finally, it is legally sound: it relies on the U.S. Constitution’s negative mandate in Article I, Section 10, that “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts.”

Under this Act, not only would the use of FRNs by the State be made illegal; the use of legal tender U.S. gold and silver coins would be encouraged amongst the general population as well, along with any other currency that parties mutually consent to using.

This will have three immediate effects: the elimination of Federal Reserve Notes from State transactions; the requirement of individuals and businesses to cease using FRNs in their transactions with the State; and the introduction of competition in currencies amongst the general population.

With all three effects working in tandem, the use of low-value pieces of paper issued by the Federal Reserve will become irrelevant, and an emaciated Federal Reserve system can be brought to a welcome, if inglorious, end.

You can download the full paper at this link (.pdf)

You can download the Constitutional Tender Act template here:
http://www.tenthamendmentcenter.com/legislation/constitutional-tender/

Track Constitutional Tender legislation in the states at this link:
http://www.tenthamendmentcenter.com/nullification/constitutional-tender/

Bill Greene is a Professor of Theology at Miami Christian University, teaches Social Sciences at the Verity Institute, and is the founder of ConstitutionalTender.com.

Since my 2008 campaign for the presidency I have often been asked, “How would a constitutionalist president go about dismantling the welfare-warfare state and restoring a constitutional republic?” This is a very important question, because without a clear road map and set of priorities, such a president runs the risk of having his pro-freedom agenda stymied by the various vested interests that benefit from big government.

Of course, just as the welfare-warfare state was not constructed in 100 days, it could not be dismantled in the first 100 days of any presidency. While our goal is to reduce the size of the state as quickly as possible, we should always make sure our immediate proposals minimize social disruption and human suffering. Thus, we should not seek to abolish the social safety net overnight because that would harm those who have grown dependent on government-provided welfare. Instead, we would want to give individuals who have come to rely on the state time to prepare for the day when responsibility for providing aide is returned to those organizations best able to administer compassionate and effective help – churches and private charities.

Now, this need for a transition period does not apply to all types of welfare. For example, I would have no problem defunding corporate welfare programs, such as the Export-Import Bank or the TARP bank bailouts, right away. I find it difficult to muster much sympathy for the CEO’s of Lockheed Martin and Goldman Sachs.

No matter what the president wants to do, most major changes in government programs would require legislation to be passed by Congress. Obviously, the election of a constitutionalist president would signal that our ideas had been accepted by a majority of the American public and would probably lead to the election of several pro-freedom congressmen and senators. Furthermore, some senators and representatives would become “born again” constitutionalists out of a sense of self-preservation. Yet there would still be a fair number of politicians who would try to obstruct our freedom agenda. Thus, even if a president wanted to eliminate every unconstitutional program in one fell swoop, he would be very unlikely to obtain the necessary support in Congress.

Yet a pro-freedom president and his legislative allies could make tremendous progress simply by changing the terms of the negotiations that go on in Washington regarding the size and scope of government. Today, negotiations over legislation tend to occur between those who want a 100 percent increase in federal spending and those who want a 50 percent increase. Their compromise is a 75 percent increase. With a president serious about following the Constitution, backed by a substantial block of sympathetic representatives in Congress, negotiations on outlays would be between those who want to keep funding the government programs and those who want to eliminate them outright – thus a compromise would be a 50 percent decrease in spending!

While a president who strictly adheres to the Constitution would need the consent of Congress for very large changes in the size of government, such as shutting down cabinet departments, he could use his constitutional authority as head of the executive branch and as commander in chief to take several significant steps toward liberty on his own. The area where the modern chief executive has greatest ability to act unilaterally is in foreign affairs. Unfortunately, Congress has abdicated its constitutional authority to declare wars, instead passing vague “authorization of force” bills that allow the president to send any number of troops to almost any part of the world. The legislature does not even effectively use its power of the purse to rein in the executive. Instead, Congress serves as little more than a rubber stamp for the president’s requests.

If the president has the power to order U.S. forces into combat on nothing more than his own say-so, then it stands to reason he can order troops home. Therefore, on the first day in office, a constitutionalist can begin the orderly withdrawal of U.S. forces from Iraq and Afghanistan. He can also begin withdrawing troops from other areas of the world. The United States has over 300,000 troops stationed in more than 146 countries. Most if not all of these deployments bear little or no relationship to preserving the safety of the American people. For example, over 20 years after the fall of the Berlin Wall, the U.S. still maintains troops in Germany.

Domestically, the president can use his authority to set policies and procedures for the federal bureaucracy to restore respect for the Constitution and individual liberty. For example, today manufacturers of dietary supplements are subject to prosecution by the Food and Drug Administration (FDA) or Federal Trade Commission (FTC) if they make even truthful statements about the health benefits of their products without going through the costly and time-consuming procedures required to gain government approval for their claims. A president can put an end to this simply by ordering the FDA and FTC not to pursue these types of cases unless they have clear evidence that the manufacturer’s clams are not true. Similarly, the president could order the bureaucracy to stop prosecuting consumers who wish to sell raw milk across state lines.

A crucial policy that a president could enact to bring speedy improvements to government is ordering the bureaucracy to respect the 10th Amendment and refrain from undermining state laws. We have already seen a little renewed federalism with the current administration’s policy of not prosecuting marijuana users when their use of the drug is consistent with state medical-marijuana laws. A constitutionalist administration would also defer to state laws refusing compliance with the REAL ID act and denying federal authority over interstate gun transactions. None of these actions repeals a federal law; they all simply recognize a state’s primary authority, as protected by the 10th amendment, to set policy in these areas.

In fact, none of the measures I have discussed so far involves repealing any written law. They can be accomplished simply by a president exercising his legitimate authority to set priorities for the executive branch. And another important step he can take toward restoring the balance of powers the Founders intended is repealing unconstitutional executive orders issued by his predecessors.

Executive orders are a useful management tool for the president, who must exercise control over the enormous federal bureaucracy. However, in recent years executive orders have been used by presidents to create new federal laws without the consent of Congress. As President Clinton’s adviser Paul Begala infamously said, “stroke of the pen, law of the land, pretty cool.” No, it is not “pretty cool,” and a conscientious president could go a long way toward getting us back to the Constitution’s division of powers by ordering his counsel or attorney general to comb through recent executive orders so the president can annul those that exceed the authority of his office. If the President believed a particular Executive Order made a valid change in the law, then he should work with Congress to pass legislation making that change.

Only Congress can directly abolish government departments, but the president could use his managerial powers to shrink the federal bureaucracy by refusing to fill vacancies created by retirements or resignations. This would dramatically reduce the number of federal officials wasting our money and taking our liberties. One test to determine if a vacant job needs to be filled is the “essential employees test.” Whenever D.C. has a severe snowstorm, the federal government orders all “non-essential” federal personal to stay home. If someone is classified as non-essential for snow-day purposes, the country can probably survive if that position is not filled when the jobholder quits or retires. A constitutionalist president should make every day in D.C. like a snow day!

A president could also enhance the liberties and security of the American people by ordering federal agencies to stop snooping on citizens when there is no evidence that those who are being spied on have committed a crime. Instead, the president should order agencies to refocus on the legitimate responsibilities of the federal government, such as border security. He should also order the Transportation Security Administration to stop strip-searching grandmothers and putting toddlers on the no-fly list. The way to keep Americans safe is to focus on real threats and ensure that someone whose own father warns U.S. officials he’s a potential terrorist is not allowed to board a Christmas Eve flight to Detroit with a one-way ticket.

Perhaps the most efficient step a president could take to enhance travel security is to remove the federal roadblocks that have frustrated attempts to arm pilots. Congress created provisions to do just that in response to the attacks of September 11, 2001. However, the processes for getting a federal firearms license are extremely cumbersome, and as a result very few pilots have gotten their licenses. A constitutionalist in the Oval Office would want to revise those regulations to make it as easy as possible for pilots to get approval to carry firearms on their planes.

While the president can do a great deal on his own, to really restore the Constitution and cut back on the vast unconstitutional programs that have sunk roots in Washington over 60 years, he will have to work with Congress. The first step in enacting a pro-freedom legislative agenda is the submission of a budget that outlines the priorities of the administration. While it has no legal effect, the budget serves as a guideline for the congressional appropriations process. A constitutionalist president’s budget should do the following:

1. Reduce overall federal spending
2. Prioritize cuts in oversize expenditures, especially the military
3. Prioritize cuts in corporate welfare
4. Use 50 percent of the savings from cuts in overseas spending to shore up entitlement programs for those who are dependent on them and the other 50 percent to pay down the debt
5. Provide for reduction in federal bureaucracy and lay out a plan to return responsibility for education to the states
6. Begin transitioning entitlement programs from a system where all Americans are forced to participate into one where taxpayers can opt out of the programs and make their own provisions for retirement and medical care

If Congress failed to produce a budget that was balanced and moved the country in a pro-liberty direction, a constitutionalist president should veto the bill. Of course, vetoing the budget risks a government shutdown. But a serious constitutionalist cannot be deterred by cries of “it’s irresponsible to shut down the government!” Instead, he should simply say, “I offered a reasonable compromise, which was to gradually reduce spending, and Congress rejected it, instead choosing the extreme path of continuing to jeopardize America’s freedom and prosperity by refusing to tame the welfare-warfare state. I am the moderate; those who believe that America can afford this bloated government are the extremists.”

Unconstitutional government spending, after all, is doubly an evil: it not only means picking the taxpayer’s pocket, it also means subverting the system of limited and divided government that the Founders created. Just look at how federal spending has corrupted American education.

Eliminating federal involvement in K–12 education should be among a constitutionalist president’s top domestic priorities. The Constitution makes no provision for federal meddling in education. It is hard to think of a function less suited to a centralized, bureaucratic approach than education. The very idea that a group of legislators and bureaucrats in D.C. can design a curriculum capable of meeting the needs of every American schoolchild is ludicrous. The deteriorating performance of our schools as federal control over the classroom has grown shows the folly of giving Washington more power over American education. President Bush’s No Child Left Behind law claimed it would fix education by making public schools “accountable.” However, supporters of the law failed to realize that making schools more accountable to federal agencies, instead of to parents, was just perpetuating the problem.

In the years since No Child Left Behind was passed, I don’t think I have talked to any parent or teacher who is happy with the law. Therefore, a constitutionalist president looking for ways to improve the lives of children should demand that Congress cut the federal education bureaucracy as a down payment on eventually returning 100 percent of the education dollar to parents.

Traditionally, the battle to reduce the federal role in education has been the toughest one faced by limited-government advocates, as supporters of centralized education have managed to paint constitutionalists as “anti-education.” But who is really anti-education? Those who wish to continue to waste taxpayer money on failed national schemes, or those who want to restore control over education to the local level? When the debate is framed this way, I have no doubt the side of liberty will win. When you think about it, the argument that the federal government needs to control education is incredibly insulting to the American people, for it implies that the people are too stupid or uncaring to educate their children properly. Contrary to those who believe that only the federal government can ensure children’s education, I predict a renaissance in education when parents are put back in charge.

The classroom is not the only place the federal government does not belong. We also need to reverse the nationalization of local police. Federal grants have encouraged the militarization of law enforcement, which has led to great damage to civil liberties. Like education, law enforcement is inherently a local function, and ending programs such as the Byrne Grants is essential not just to reducing federal spending but also to restoring Americans’ rights.

Obviously, a president concerned with restoring constitutional government and fiscal responsibility would need to address the unstable entitlement situation, possibly the one area of government activity even more difficult to address than education. Yet it is simply unfair to continue to force young people to participate in a compulsory retirement program when they could do a much better job of preparing for their own retirements. What is more, the government cannot afford the long-term expenses of entitlements, even if we were to reduce all other unconstitutional foreign and domestic programs.

As I mentioned in the introduction to this article, it would be wrong simply to cut these programs and throw those who are dependent on them “into the streets.” After all, the current recipients of these programs have come to rely on them, and many are in a situation where they cannot provide for themselves without government assistance. The thought of people losing the ability to obtain necessities for them because they were misled into depending on a government safety net that has been yanked away from them should trouble all of us. However, the simple fact is that if the government does not stop spending money on welfare and warfare, America may soon face an economic crisis that could lead to people being thrown into the street.

Therefore, a transition away from the existing entitlement scheme is needed. This is why a constitutionalist president should propose devoting half of the savings from the cuts in wars and other foreign spending, corporate welfare, and unnecessary and unconstitutional bureaucracies to shoring up Social Security, Medicare, and Medicaid and providing enough money to finance government’s obligations to those who are already stuck in the system and cannot make alternative provisions. This re-routing of spending would allow payroll taxes to be slashed. The eventual goal would be to move to a completely voluntary system where people only pay payroll taxes into Social Security and Medicare if they choose to participate in those programs. Americans who do not want to participate would be free not to do so, but they would forgo any claim to Social Security or Medicare benefits after retirement.

Some people raise concerns that talk of transitions is an excuse for indefinitely putting off the end of the welfare state. I understand those concerns, which is why a transition plan must lay out a clear timetable for paying down the debt, eliminating unconstitutional bureaucracies, and setting a firm date for when young people can at last opt out of the entitlement programs.

A final area that should be front and center in a constitutionalist’s agenda is monetary policy. The Founders obviously did not intend for the president to have much influence over the nation’s money – in fact, they never intended any part of the federal government to operate monetary policy as it defined now. However, today a president could play an important role in restoring stability to monetary policy and the value of the dollar. To start, by fighting for serious reductions in spending, a constitutionalist administration would remove one of the major justifications for the Federal Reserve’s inflationary policies, the need to monetize government debt.

There are additional steps a pro-freedom president should pursue in his first term to restore sound monetary policy. He should ask Congress to pass two pieces of legislation I have introduced in the 110th Congress. The first is the Audit the Fed bill, which would allow the American people to learn just how the Federal Reserve has been conducting monetary policy. The other is the Free Competition in Currency Act, which repeals legal tender laws and all taxes on gold and silver. This would introduce competition in currency and put a check on the Federal Reserve by ensuring that people have alternatives to government-produced fiat money.

All of these measures will take a lot of work – a lot more than any one person, even the president of the United States, can accomplish by himself. In order to restore the country to the kind of government the Founders meant for us to have, a constitutionalist president would need the support of an active liberty movement. Freedom activists must be ready to pressure wavering legislators to stand up to the special interests and stay the course toward freedom. Thus, when the day comes when someone who shares our beliefs sits in the Oval Office, groups like Young Americans for Liberty and Campaign for Liberty will still have a vital role to play. No matter how many pro-freedom politicians we elect to office, the only way to guarantee constitutional government is through an educated and activist public devoted to the ideals of the liberty.

For that reason, the work of Young Americans for Liberty in introducing young people to the freedom philosophy and getting them involved in the freedom movement is vital to the future of our country. I thank all the members and supporters of YAL for their dedication to changing the political debate in this country, so that in the not-too-distant future we actually will have a president and a Congress debating the best ways to shrink the welfare-warfare state and restore the republic.

This essay originally appeared in Young American Revolution, the magazine of Young Americans for Liberty.

Dr. Ron Paul is a Republican member of Congress from Texas.

© 2010 Young Americans for Liberty

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.

Especially insulting is the idea that in spite of our own fiscal problems at home, taxpayer dollars will continue to be sent overseas in the form of foreign aid where it often does more harm than good. When need is demonstrated to Americans and they can afford it, they can be counted on for a tremendous outpouring of private, voluntary charity to worthy aid organizations, as we recently saw in Haiti.

By contrast, government-to-government aid is taken from the poor by force and too often enriches the corrupt. It is counterproductive and wasteful. But the idea of eliminating, freezing, or reducing foreign aid is not up for serious debate any time soon.

The third caveat is what is included in the freeze that would make it politically impossible to pass Congress, for example air traffic controllers salaries, education, farm subsidies and national parks.

I do not necessarily want a cut in spending in this country – I just want to change who does the spending. The spending should be done by the people who earn the money, if they choose, and on what they choose, without any government interference. That is what makes the economy work.

Politicians should stick to the very limited roles given them by the constitution instead of allocating such a sizeable portion of our capital and intervening through regulations and tax policy. But because politicians have disregarded the constitution, and the people have no idea what rule they will break next, there is already a very real spending freeze underway in this economy, by the people.

If government would stick only to what it was authorized to do, and leave the rest to the people, most of these problems would resolve themselves.

Ron Paul is a Republican member of Congress from Texas

Much has been made recently about the supposed economic recovery. A few blips in a few statistics and many believe our troubles are all over. Of course, they have to redefine recovery as “jobless” to account for the lack of improvement on Main Street. But the banks have money, Wall Street is chugging along, and the administration would like to get on with other agendae.

They have even set up a commission to investigate the crisis as if it were all in the past.

The truth is that Americans are still losing jobs, the Fed is still inflating, and more regulations are in the works that will prevent jobs and productivity from coming back. We are on this trajectory for the long haul. The claim has been made many times that this administration has only had a year to clean up the mess of the last administration. I wish they would at least get started!

Instead of reversing course, they are maintaining Bush’s policies full speed ahead. They are even keeping the Bush-appointee in charge of the Federal Reserve! They are not even making token efforts at change in economic policy. And for all the talk of transparency, we hear that some powerful senators will do all they can to block a simple audit of the powerful and secretive Federal Reserve.

We have been on a disastrous course for a long time. The money supply has doubled in the last year, our debt is unsustainable, the value of the dollar is going to continue its drop, and those Americans who understand where we are headed feel helpless and held hostage by foolish policy makers in Washington.

When the bills finally come due and the dollar stops working we are in for some real social, economic and political chaos. That is, unless we take some major steps now to allow for a peaceful transition in the future. These steps are laid out in my legislation to legalize competing currencies.

First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes.

Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money.

The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power.

Ron Paul is a Republican member of Congress from Texas.

Editor’s Note: CLICK HERE to view the Tenth Amendment Center’s Constitutional Tender Legislation Tracking Page

Last week it was revealed that when Treasury Secretary Tim Geithner was Chairman of the New York Federal Reserve, he urged AIG officials not to disclose to the Securities Exchange Commission relevant details of agreements with banks to bail out Goldman Sachs.

Apparently he felt at the time that regulators and the public would be angry that taxpayer money was used to fully compensate bankers who made some horrifically bad investment decisions. These banks should have suffered the consequences of the huge risks they were taking. After all, they kept plenty of rewards when times were good. Instead, the Fed found a way to socialize these major losses so these banks could survive and continue making more bad decisions, at the expense of the American people and the value of the dollar.

Geithner claims that they had to take politically unpopular actions to save the economy from collapse. Half of that is right – it was politically unpopular, but it is extremely premature at best, to claim the economy has been saved.

It was just reported that the economy shed 85,000 more jobs in December. Unemployment stands at 10 percent officially, and 22 percent according to more traditional calculations. It is hard to argue that this sort of government waste has done anything but harm to our economy.

Raiding Main Street to bail out Wall Street is a foolish idea. Main Street productivity and the strength of the dollar is the bedrock of the economy. You cannot gut this foundation without eventually toppling everything else.

This is what too many policy makers either don’t understand or refuse to face. Or even worse, perhaps they do understand, but don’t care!

In any case, this revelation makes precisely my point about the need for Fed transparency. This claim that the Fed should have “independence” is a canard. They very much enjoy their comfortable pattern of bailing out friends and devaluing the currency with no oversight and no accountability.

Geithner specifically asked officials at AIG not to disclose to the SEC or to the public particulars about this special deal for his friends. We only know these details now because AIG was eventually forthcoming when Congress demanded some answers.

We should be getting this information, and information on all such dealings, straight from the Fed. The Fed should be accountable to Congress because it is a creature of Congress.

The Constitution gives Congress the authority to oversee the integrity of the monetary unit. We have unwisely and unconstitutionally delegated this authority to the Federal Reserve, which has in turn devalued our dollar by 95 percent and counting.

When the Federal Reserve engages in harmful policies, Congress is still ultimately responsible. If the Fed is not made accountable through a GAO audit at least, it will continue to be accountable to no one, and that is unacceptable.

Geithner expects to be praised and thanked for his actions instead of rebuked and fired. He expects to be given more power to engage in “experimental” monetary policy in the future. But he has just given us a very good idea of what the Fed and Treasury would do with more power, what they consider good monetary policy, and why they like their so-called independence.

Ron Paul is a republican member of Congress from Texas.

The U.S. Preventive Task Force caused quite a stir recently when they revised their recommendations on the frequency and age for women to get mammograms. Many have speculated on the timing for this government-funded report, with the Senate vote on health care looming, and cost estimates being watched closely. Just the hint that the government would risk women’s health to cut costs is causing outrage on both sides of the aisle.

Even the administration is alarmed at its own panel’s recommendation. One official, the Secretary of Health and Human Services, Kathleen Sebelius told women to ignore the new guidelines, keep doing what they are doing and make the best decisions for themselves after consulting with their doctors.

This sounds like an excellent idea to me. As a physician myself, I understand the importance of ensuring that patients are able to consult their doctors and make their own decisions without interference from government bureaucrats or government-favored corporations.

However, I am confused by the administration’s reasoning and apparent change of heart. Have they reversed their position on healthcare reform and now decided that patients and doctors should be in control of individual healthcare decisions? Or are they still in the healthcare central planning business?

The healthcare reform plans currently aim to empower Congress to dictate to insurers minimal standards of coverage. Those government standards will ultimately be determined by politicians and bureaucrats, not individual patients and doctors.

It is naive to think that recommendations by an authoritative government panel will never be used to deny services to people that want them. It is sad to think that people will be forced to spend their hard-earned money for a one-size fits all, government mandated healthcare delivery model, but then have to scrape together additional funds to pay out of pocket for healthcare they really want or need – that is, if the government allows them to at all.

After all, the federal government currently forbids Medicare beneficiaries from spending their own money on services covered by Medicare, if for whatever reason they need to. Why wouldn’t the government eventually apply these kinds of restrictions to everyone, if they are successful with this takeover? Beware of the supposed gifts offered to you by government, for when it gives you things with one hand, the other hand takes away your liberty and independence.

It remains to be seen what provisions will be in the final bill. We do know we have no funds to pay for it except for debt and money printed out of thin air. We know that the nation’s creditors are getting very nervous about the government’s continuous spending sprees and bailouts. We know this healthcare bill, like all government programs, will be expensive.

There will be a day of reckoning when the credit stops and the bills for all this spending come due. When that day comes and politicians and bureaucrats have to deal with reality, it will be very uncomfortable to find yourself in their liability column, which is where healthcare reform will put many more Americans.

With a faltering economy, multiple wars, and the approaching demise of the dollar’s reserve status, there are more than enough problems to keep politicians in Washington working day and night. In between handing out cash for clunkers and nationalizing healthcare, the administration is busy sending more troops overseas, escalating existing wars, and seeking out excuses to start new wars. Congress is working on “urgent” legislation to address crises like healthcare reform and climate change.

The reforms are so very urgent that legislation must pass swiftly with no time to read the bills even though the new laws wouldn’t take effect for several years! Meanwhile, the Federal Reserve is busy dealing with our dollar crisis by printing up more dollars.

Yes, there certainly is a lot for Washington to do these days. Most, if not all, of what Washington is doing however, is more of what created the problems in the first place. Capitol Hill is filled with politicians running around putting out fires – but with gasoline. The truth is that all these fires keep so many powerful people employed and wealthy that it is not truly in many decision makers’ interests to be very effective problem-solvers.

If Washington ran out of problems, think how many lobbyists would be out of a job, and how many special interest groups would just disband? Sadly, whatever is bad for the greater economy is good for the economy and job market in DC.

Of course, no form of government, not even one that respected its Constitutional restraints, would magically create a problem-free society. The question is: how should a society deal with its problems? The form of government that our founders envisioned, in which the federal government was strictly constrained by the Constitution, allows private citizens and communities to solve their own problems.

The role of the government should be to protect contracts, punish fraud and violence through appropriate laws, law enforcement and the courts. Not a whole lot of laws or bureaucrats are really necessary to work on just that. Instead, new laws are constantly needed to fix the problems that previous unconstitutional laws created.

We have ended up with an incomprehensible maze of laws and regulations that severely constrains the people and expands the government – the exact opposite of what our founders intended.

This is all because the Constitution is treated like a suggestion manual instead of the supreme law of the land. Under the Constitution, politicians’ hands are supposed to be tied in most of the areas they involve themselves in today. But somewhere along the line, politicians stepped out of Constitutional bounds and started pretending to solve our problems for us.

All we have to show for it is more problems.

Today, Washington politicians can busily “solve” one problem, knowing that unintended consequences from that “solution” will keep them and their friends all very busy tomorrow. The people are ultimately left suffocating under the burden of Washington’s helping hands. It is coming to a point where our economy, our dollar, and indeed, the rest of the world have had about all the help from Washington that they can stand.

The United States is headed the way of Rome and the Soviet Union, for the same reasons, unless we reverse the trend.

I continue to hope that enough Americans will realize that the true strength of our country doesn’t come from Washington, but rather the limitations placed on government in the Constitution. We must resolve to reverse the destructive course that we are on and then never again let big government problem-solving take over our lives and our country.

Ron Paul is a Republican member of Congress from Texas

Last week I was very pleased that hearings were held on the independence of the Federal Reserve system.  My bill HR 1207, known as the Federal Reserve Transparency Act, was discussed at length, as well as the general question of whether or not the Federal Reserve should continue to operate independently.

The public is demanding transparency in government like never before.  A majority of the House has cosponsored HR 1207.  Yet, Senator Jim DeMint’s heroic efforts to attach it to another piece of legislation elicited intense opposition by the Senate leadership.

The hearings on Capitol Hill provided us with a great deal of information about the types of arguments that will be levied against meaningful transparency and how the secretive central bankers will defend the status quo that is so beneficial to them.

Claims are made that auditing the Fed would compromise its independence.  However, by independence, they really mean secrecy.  The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves.  I am happy to challenge this type of “independence”.

They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs.  We should just trust them.  This is patently ridiculous.  The market is a complex and intricate thing.

No one knows what the market needs other than the market itself.  It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled.  Bankers are not all-knowing and cannot ignore the rules of supply and demand.  They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.

They claim the Fed must remain apolitical.  No organization is apolitical that relies on the President to appoint the Chairman.  In fact, it is subject to the worst sort of politics – power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight!

The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long term considerations.  They do this partly because of the political appointee process for the Chairmanship.

The only accountability the Federal Reserve has is ultimately to Congress, which granted its charter and can revoke it at any time.  It is Congress’s constitutional duty to protect the value of the money, and they have abdicated this responsibility for far too long.

This was the issue that got me involved in politics 35 years ago.  It is very encouraging to finally see the issue getting some needed exposure and traction.  It is regrettable that it took a crisis of this magnitude to get a serious debate on this issue.

Ron Paul is a republican member of Congress from Texas.

I have been very pleased with the progress of my legislation, HR 1207, which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system. This bill now has nearly 170 cosponsors, with support from both Republicans and Democrats.

Senator Bernie Sanders has introduced a companion bill in the Senate S 604, which will hopefully begin to gain momentum as well. I am very encouraged to see so many of my colleagues in Congress stand with me for greater transparency in government.

Some have begun to push back against this bill, and I am very happy to address their concerns.

The main argument seems to be that Congressional oversight over the Fed is government interference in the free market. This argument shows a misunderstanding of what a free market really is. Fundamentally, you cannot defend the Federal Reserve and the free market at the same time.

The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money – the lifeblood of the economy. In a free market, interest rates, like the price of any other consumer good, are decentralized and set by the market.

The only legitimate, Constitutional role of government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters.

Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who, instead of stabilizing the economy, have destabilized it. It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930’s. It has also inflated away the value of our currency by over 96 percent since its inception. It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts. It has predictably exacerbated the very problems it was meant to solve.

Detractors have also argued that the Fed must remain immune from the political process, and that that more congressional oversight would distort their very important decisions. On the contrary, the Federal Reserve is already heavily entrenched in the political process, as the Fed chairman is a political appointee. High-level officials routinely make the rounds between positions at the Fed, member banks, Treasury and back again, taking care of friends and each other along the way.

As far as the foolishness of placing complex monetary policy decisions in the hands of politicians – I couldn’t agree more. No politician or central banker, no matter how brilliant, is smart enough to know more than the market itself. The failure of central economic planning has been witnessed over and over. It is frankly beyond me why we ever agreed to try it again.

To understand how unwise it is to have the Federal Reserve, one must first understand the magnitude of the privileges they have. They have been given the power to create money, by the trillions, and to give it to their friends, under any terms they wish, with little or no meaningful oversight or accountability. Thus the loudest arguments against greater transparency are likely to come from those friends, and understandably so.

However, it is the responsibility of every member of Congress to represent the interests of the people that sent them to Washington and find out what has been happening with our money. As the branch of government with the power of the purse, we really have no other reasonable choice when the economy is in the shape it is in.

Ron Paul is a republican member of Congress from Texas.