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"Ron Paul's Plans are Too Extreme"

An argument I encounter time and again is that Ron Paul’s fiscal plan is just too extreme to accept. To those who subscribe to such a notion I offer the burden of knowledge, because without question you don’t understand the urgency of the matter. Not unlike the frog who boils himself to death when the water in the pot is gradually brought to a boil. We have long been blind to the subtle changes around us which, like the frog, will ensure our own doom. Economically, we are nearing the boiling point; a precipice.

The Road to Hyper-Inflation

It began upon the installation of the Federal Reserve central bank in 1913, which introduced government micromanipulation of our money supply; or Keynesian economics. This greatly accelerated in 1971 when America unceremoniously departed from the gold standard at the behest of then Chairmen of the Federal Reserve Arthur Burns in an effort to introduce elasticity to the money supply. This gave the private Federal Reserve an unlimited ability to expand our money supply along with unlimited secrecy.

Furthermore it allowed the Fed to interject the business cycle to make economic booms last longer, which in turn caused the recessions last longer. The Federal Reserve does this by way of inflation (inflation is the act of injecting money into the money supply resulting in the depreciation of the dollar). Despite the Fed’s efforts to prop the boom, the presence of the real market restricts the boom from perpetuity, that is, every period of economic euphoria must be respected by an equal period of economic misery.

The great bubble was largely attributed to the bad policies of Alan Greenspan who was the chairman of the Federal Reserve from 1987 until 2006. Greenspan intervened in the recession that should’ve followed the dot-com bubble. Instead of accepting the natural recession that should have occurred in 2001, the Fed began expanding the Housing Market. This didn’t negate the previous bubble; it merely stalled it by creating a bigger bubble. The Fed arrogantly continued its efforts to stop recession through low interest rates and actual interest rates fell below historical averages. At that point the Fed had abandoned all monetary rules in attempts to prop the market.

The housing market collapsed as a direct result of government intervening in the business cycle. In January of 2001, Alan Greenspan slashed the federal fund targets from 6.5% all the way down to 1% by June 2003. He fixed the rates at an artificial low of 1% for a full year, which encouraged tremendous bad investments and caused a massive expansion of the bubble. Then, by June of 2006, Greenspan had raised it back to 5.25%, a move that popped the bubble and unleashed the havoc of three overdue recessions.


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samsmart

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And yet none of that has to do with the abolition of the Department of Energy, or abolition of the Department of Education, or the abolition of the Environmental Protection Agency, or the closing of U.S. military bases all over the world, or the elimination of government flood insurance programs, or the elimination of federal disaster relief programs, or the legalization of recreational drugs, or the elimination of the Federal Reserve, or the return to the gold standard, or any of a number of Ron Paul's other policies that most Americans don't agree with.
 
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