Ron Paul - Debt, Deficit, Spending, and the Size of Government

Last Updated: Jan 16, 2012

Summary

Congressman Paul is a supremely strong and ardent supporter of balanced budgets, paying off the national debt, and returning the size of the federal government to it's constitutionally mandated roles. He supports ending federal programs not authorized in the Constitution - such as Education, OSHA, and the EPA - and only funding items which the federal government is constitutionally mandated to do - such as border protection.

As early as 1988, Congressman Paul was warning about the size of the yearly deficits while he campaigned for the Libertarian Party's nomination to the Presidency. Congressman Paul noted that President Reagan campaigned on reduced spending and balanced budgets, but once in office he did not abide by those principles.

In 2005, Congressman Paul noted that what the Bush administration was referring to as "balanced budgets" were nothing more than small decreases from desired spending levels, coupled with unrealistic expectations on the growth of the economy. That same year, Congressman Paul noted that no amount of spending will ever satisfy those who believe government should address every human problem and involve itself in every aspect of our lives. As proof, he cited those who thought that the $2.4 trillion dollar budget was inadequate and notes that by 2015 they would be saying the same thing about a $5 trillion dollar budget.

Congressman Paul's desire to reduce the size of government covers all facets. He has stated that republicans that supported the Medicare Part D drug prescription plan can no longer claim to support small government or balanced budgets, and neither can those who support military intervention overseas while funding the items off budget. He has stated that he would find it difficult to vote for any budget that did not cut the size of government by at least %25, noting that the government in 2006 was twice as large as it was in 1990.

In 2008, Congressman Paul spoke about the budget for 2008 and called it a monument to irresponsibility and profligacy. He noted that each party sought to increase spending with the only variance being on the direction of spending.

Congressman Paul has consistently opposed raising the debt ceiling. In recent years as the pace of the debt increase gains speed, he has spoken out consistently about the need for those who are serious about reduced spending to make a stand and refuse to authorize further debt limit increases.

Congressman Paul's opposition to deficit spending and increasing debt is based on the inevitable repercussions of those actions. He notes that the solution to paying off large debts is always to print more money and lessen the value of the currency to make paying off those debt easier. Eventually, all governments that attempt this fail due to their inability to control the inflationary results of too much monetary devaluation. In the short term, this inflation is little more than a tax imposed on middle class Americans as the value of their savings is lessened.

Consistent with his voting record and numerous statements, Congressman Paul has cosponsored legislation to require a 2/3 majority vote to raise the national debt limit as opposed to the nominal 50% majority vote.

As part of his 2012 presidential campaign, Congressman Paul has stated that he would reduce spending by $1 trillion in the first year. This would be accomplished by reducing the size of government by closing the departments of Energy, HUD, Commerce, Interior, and Education, as well as abolishing the Transportation Security Administration.

Libertarian Campaign Interview

In 1988, Congressman Paul appeared on CSPAN and discussed his views on government and his run for the Presidency within the Libertarian party.

Deficits Make You Poorer

In March of 2005, Congressman Paul used his "Texas Talk" to address the deficits amassed in recent years and what it means for borrowing.

Deficits Make You Poorer
March 14, 2005
Most Americans are vaguely aware that Congress has run up huge deficits in recent years, but the numbers involved are so large that it’s hard to grasp what our government’s indebtedness really means to us as individuals. The total federal debt is quickly approaching $8 trillion, courtesy of an administration that borrows roughly one billion dollars every day to pay its bills. Ultimately, the U.S. government will either repay its debts or default on them.
We need only look at the Argentine debt crisis of 2001 for an example of what happens when a government fails to make even minimum payments to creditors. The Argentine economy virtually collapsed, and the value of her money tumbled. This is something most Americans cannot fathom, especially a political class that mistakenly thinks it can’t happen here.
Repaying trillions of dollars will not be easy, however. Interest payments alone already consume nearly 10% of the annual federal budget, and Congress shows no sign of abating its spending appetite anytime soon. In fact, present spending rates will produce single-year deficits of $1 trillion in coming years unless the public finally gets fed up and demands an end to it. When the federal government spends more each year than it collects in tax revenues, it has three choices: It can raise taxes, print money, or borrow money. While these actions may benefit politicians, all three options are bad for average Americans.
Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers. The federal government still consumes more of the private economy than it ever has except during World War II, despite the administration’s anti-tax rhetoric. Deficits mean more monetary inflation. Deficit spending necessitates the creation of more fiat dollars by the Federal Reserve to keep the government afloat. Congress knows it can always fall back on the Fed money machine, which of course encourages more deficit spending. It’s a vicious cycle that ultimately makes every dollar you have worth less. Deficits mean more borrowing overseas, which threatens U.S. sovereignty. Never before has the American economy depended so much on the actions of foreign governments and central banks. China and other foreign creditors could in essence wage economic war against us simply by dumping their huge holdings of U.S. dollars, driving the value of those dollars sharply downward and severely damaging our economy.
Every dollar the federal government borrows makes us less secure as a nation, by making America beholden to interests outside our borders. The economic situation today is reminiscent of the 1970s. The economic malaise of that era resulted from the profligacy of the 1960s, when Congress wildly expanded the welfare state and fought an expensive war in southeast Asia. Large federal deficits led to stagflation-- a combination of high price inflation, high interest rates, high unemployment, and stagnant economic growth. I fear that today’s economic fundamentals are worse than the 1970s: federal deficits are higher, the supply of fiat dollars is much greater, and personal savings rates are much lower. If the federal government won’t stop spending, borrowing, printing, and taxing, we may find ourselves in far worse shape than 30 years ago.

Hey Big Spender

In August of 2005, Congressman Paul used his "Texas Talk" to address the budget for that year and improper predictions made to make the budget appear to be on a path to be balanced.

Hey, Big Spender
August 29, 2005
When Congress returns to Washington in September, final touches in the form of last-minute pork will be added to the enormous 2006 federal budget. Rosy predictions about a balanced budget in five years will be made, and both parties will pat themselves on the back for crafting another budget agreement. There will be little partisan acrimony, and the media scarcely will report the results of the vote.
Congressional spending, which dramatically affects every American, never generates much public interest-- while distractions like Terri Schiavo and Michael Jackson occupy the nation’s attention for months. Congressional budget agreements really don’t mean much. A congressional budget passed in 2005 has absolutely no impact on spending decisions in the future, and will be quickly forgotten as all past budgets have been. No politician or government official in 2010 will be heard to say, “Gee, we promised back in 2005 to spend less than this, so we better stick to that pledge.” Only a fool can believe that Congress will consider itself bound by past budgets, and constitutionally the budget is passed one year at a time. Anything else is just talk. Congress can make all the deals it wants, but it can only implement a budget for the coming fiscal year.
What is being called a "balanced budget" by 2010 is merely a hopeful projection of spending, matched with projected, hypothetical economic forecasts. To say the federal government can correctly predict exactly how the economy-- which is the sum total of the spending and savings habits of everyone in the nation-- will behave five years from now is ludicrous. For more than 25 years there have been promises about balancing the budget five years out using government forecasts. It’s always the same story: "Just give us a little more time, and we promise we’ll stop spending so much. We just have to fix X, Y, and Z first."
Congress is like the drunk who promises to sober up tomorrow, without the slightest intention of doing so. The voting public is like the battered wife who somehow keeps believing the promises. We will never have a balanced budget until Congress either raises taxes or cuts spending. It's really that simple. I support balancing the budget by cutting the budget, but most people in Washington abhor that option. They abhor making real cuts to the budget because it means cutting the sacred cows of modern American politics. If we cut spending, we cut the power of Congress. Most people do not realize it, but absolutely no major program has been cut one cent in many, many years. What programs can we cut? What agencies and departments should go? A better question is: What should stay on a permanent basis? That's easy: only those functions specifically outlined in the Constitution. Is foreign aid allowed by the Constitution? No. Is public housing in the Constitution? No. Is federal involvement in education? No. Are the EPA, OSHA, and the BATF? No. Is protecting our borders? Yes. The bottom line is that everyone in Washington says they oppose pork and want government to spend less, but few in Congress actually vote that way. Most DC politicians are far too dependent on special interest money to make any waves. “Go along to get along” is the creed of the political class, and nothing will change unless and until the American public stops electing and re-electing the big spenders to office.

Budget Cuts

In November of 2005, Congressman Paul used his "Texas Talk" to address the fallacy of stating that you are slashing the budget by reducing the amount of spending increase.

Slashing the Budget?
November 21, 2005
Only in Washington DC can a spending increase be called a spending cut-- but that’s exactly what happened last week. Congress passed a budget bill that merely slows the rate at which some federal spending grows by a tiny percentage, and both parties acted as though a revolution had taken place. Republicans trumpeted the measure as a huge victory for fiscal conservatism, while Democrats were enraged by the supposed “slashing” of government programs. The uproar shows just how entrenched the spending culture has become on Capitol Hill-- even insignificant reductions in the rate of growth in federal spending are seen as earth-shattering. But if we’re really serious about cutting federal spending, why not simply cut 10% from the 2006 budget?
Remember, the same Republicans claiming victory for slowing spending next year also passed the Medicare prescription drug bill, which will add over $50 billion to the federal budget in 2006 alone! In just one year the Medicare bill adds ten times in new spending what the budget bill purportedly cuts. So nobody who voted for the Medicare drug bill has any business talking about government spending.
Neither do those who refuse to consider cutting one penny from the military and foreign aid budgets. You cannot conduct a foreign policy based on remaking whole nations using military force and pretend to operate a frugal government. The Democrats, by contrast, never want to cut spending on anything, no matter how much the federal budget grows-- and it’s doubled in 15 years. A $2.4 trillion federal budget is woefully inadequate in their eyes, and ten years from now they’ll say the same thing about a $5 trillion budget. No amount of spending will ever satisfy those who believe government should address every human problem and involve itself in every aspect of our lives.
The budget bill fails to address the root of the spending problem--this belief that Congress continually must create new federal programs and agencies. However, with the federal government’s unfunded liabilities-- Social Security, Medicare, and Medicaid-- projected to reach as much as $50 trillion by the end of this year, Congress no longer can avoid serious efforts to rein in spending. Instead of a smoke-and-mirrors approach, Congress should begin the journey toward fiscal responsibility by declaring a ten percent reduction in real spending, followed by a renewed commitment to fund only those government functions that are consistent with the Constitution.

Ever Growing National Debt

In February of 2006, Congressman Paul used his "Texas Talk" to discuss the ever increasing national debt.

The Ever-Growing Federal Budget
February 13, 2006
The Bush administration released a proposed 2007 budget last week that increases federal spending to a staggering $2.77 trillion, a sum that is 4 times larger than the Reagan-era budgets of the early 1980s. With a public angry about useless earmarks and bridges to nowhere, and a Republican congressional delegation promising to restore some small measure of fiscal discipline, it's troubling that the administration chooses to ignore economic reality and increase spending without regard to revenues and deficits.
Consider these sobering facts: ·

With a 7% rate of growth, federal spending will double in a decade.

Federal spending has grown twice as fast under Bush than Clinton, averaging 6 and 7% increases compared to the 3 and 4% increases of the 1990s.

The biggest increases in federal spending under Bush are not related to the war on terror or homeland security. Education spending, for example, grew a whopping 137% between 2001 and 2005.

The projected deficit for 2006 is $423 billion, $100 billion more than 2005. The real 2006 deficit, including the $5 billion per week we spend in Iraq, will be much, much higher.

The administration will ask for at least $120 billion in so-called "off budget" funds for Iraq and Afghanistan over the next year, perpetuating the deception that war spending somehow doesn't count toward the budget deficit.

The new Medicare prescription drug benefit will cost at least $30 billion in 2006, and is projected to cost $1.2 trillion over the coming decade. The program creates an unfunded liability twice the size of future Social Security obligations.
There has been a great deal of talk in Washington about scandals lately, but few seem to understand that enormous federal budgets provide the mother's milk for every backroom deal, questionable earmark, and sleazy lobbying trick. Like many of my Republican colleagues who curiously vote for enormous budget bills, I campaign on a simple promise that I will work to make government smaller. This means I cannot vote for any budget that increases spending over previous years. In fact, I would have a hard time voting for any budget that did not slash federal spending by at least 25%, especially when we consider that the federal budget in 1990 was far less than half what it is today. Did anyone really think the federal government was not big enough just 16 years ago?
Neither political party wants to address the fundamental yet unspoken issues inherent in any budget proposal: What is the proper role for government in our society? Are these ever-growing entitlement and military expenditures really consistent with a free country? Do the proposed expenditures, and the resulting taxes, make us more free or less free? Should the government or the marketplace provide medical care? Should the U.S. military be used to remake whole nations? Are the programs, agencies, and departments funded in the budget proposal constitutional? Are they effective? Could they operate with a smaller budget? Would the public even notice if certain items were eliminated altogether? These are the kinds of questions the American people should ask, even if Congress lacks the courage to apply any principles whatsoever to the budget process.

How Government Debt Grows

In March of 2006, Congressman Paul used his "Texas Talk" to discuss how government debt grows.

How Government Debt Grows
March 13, 2006 Today our national debt stands at $8.2 trillion, which represents about $26,000 for every man, woman, and child in America. Interestingly, the legal debt limit is only $8.18 trillion, a figure that was reached a few weeks ago. This means the Treasury department must ask Congress to raise the debt limit very soon, most likely as part of a larger bill so it can be hidden from the American people. Raising the debt ceiling is nothing new. Congress raised it many times over the last 15 years, despite the supposed “surpluses” of the Clinton years. Those single-year surpluses were based on accounting tricks that treated Social Security funds as general revenues. In reality the federal government ran deficits throughout the 1990s, and the federal debt rose steadily. Former Federal Reserve Chairman Alan Greenspan made it easier for Congress to obscure the extent of federal debt. He endorsed a change in the law that redefined Social Security and veterans pensions. In reality those obligations are debts, just like any other bill that must be paid in the future. But Mr. Greenspan urged renaming these obligations “intergovernment accounts,” which magically changed them from debts to “accrued liabilities.” This semantic shift frees up lots of room under the debt ceiling for more borrowing. Debt and credit, wisely used, can be proper tools for individuals and businesses. In a free society, however, we can never view expansion as a proper goal for government. Unlike a private business, our federal government should not be seeking out new ways to increase the scope of its dubious “services.” Any government that consumes at least 25% of the American economy and still can't balance its books is a government that vastly overspends. I disagree with the supply-side argument that government debt doesn't matter. The issue is not whether the Treasury has sufficient current income to service the debt, but rather whether a government that spends so much ultimately will destroy its own economy. Debt does matter, especially to future generations that will be asked to pay for our extravagance. When government borrows money, the actual borrowers- big spending administrations and politicians- never have to pay it back. Remember, administrations come and go, members of congress become highly paid lobbyists, and bureaucrats retire with safe pensions. The benefits of deficit spending are enjoyed immediately by politicians, who trade pork for votes and enjoy adulation for promising to cure every social ill. The bills always come due later, however. Nobody ever looks back and says, “Congressman so-and-so got us into this mess when he voted for all that spending 20 years ago.” For government, the federal budget is essentially a credit card with no spending limit, billed to somebody else. We hardly should be surprised that Congress racks up huge amounts of debt! By contrast, responsible people restrain their borrowing because they will have to pay the money back. It's time for American taxpayers to understand that every dollar will have to be repaid. We should have the courage to face our grandchildren knowing that we have done all we can to end the government spending spree.

The Importance of Fiscal Responsibility

In December of 2007, Congressman Paul used his "Texas Talk" to address the importance of fiscal responsibility.

The Importance of Fiscal Responsibility in Government
As the year draws to a close, the battle over spending in Washington is heating up. The Democrats want to expand government healthcare, while the President has vetoed the second attempt to expand SCHIP. The latest version of the State Children's Health Insurance Program would have expanded the entitlement program and raised taxes, just as the earlier version did and the President showed fiscal restraint with his veto.
Reducing our entitlement programs here at home is not against saving the children, as the rhetoric goes, it is about saving the country's economy. The fact is we have huge trade imbalances, massive deficits, and a $9 trillion national debt, which balloons to $60 trillion if unfunded future liabilities in social security and other promises we have made to Americans are included. We are at a crucial point in history right now. We must think very carefully about our next moves. There is coming a time, if we continue on this path, when all that our tax dollars and government revenues will be able to do is pay interest on the mountain of debt we have compiled in the past few decades. That will mean no government programs or services of any kind will be funded, yet future generations of Americans will still struggle under a crushing tax burden with nothing to show for it.
That is why fiscal restraint and common sense with the budget are so vitally important in government. The difference now is that our printing presses at the Federal Reserve are getting worn out as we have expanded our money supply to the breaking point with yet another rate cut this week. As the dollar falls, it is losing its reserve currency status as many countries are shifting to the Euro or the Chinese yuan or other currencies. The more that trend continues, the weaker we become on the world stage. Those foreign governments and entities that enabled us to spend so much for so long are wearing thin and cutting us off. The truth is our enemies won't need a nuclear weapon to harm us if we keep spending phantom dollars at the current rate. In fact, they won't need to do anything but sit back and watch as we spend ourselves into oblivion.
Historically, empires fail because they run out of money, or more accurately, run out of the ability to spend or inflate. Unfortunately, that is exactly the direction we are headed. We need to control spending, immediately, before it is too late. I applaud the President for his veto of the SCHIP expansion bill. It is a step in the right direction. But it is just one small step. What our economy needs right now is to go full gallop away from the tax and spend policies that have gotten us into this mess.

The 2008 Budget

In April of 2007, Congressman Paul used his "Texas Talk" address to discuss the spending level of the 2008 budget.

The 2008 Federal Budget
April 2, 2007
The fiscal year 2008 budget, passed in the House of Representatives last week, is a monument to irresponsibility and profligacy. It shows that Congress remains oblivious to the economic troubles facing the nation, and that political expediency trumps all common sense in Washington.
To the extent that proponents and supporters of these unsustainable budget increases continue to win reelection, it also shows that many Americans unfortunately continue to believe government can provide them with a free lunch. To summarize, Congress proposes spending roughly $3 trillion in 2008. When I first came to Congress in 1976, the federal government spent only about $300 billion. So spending has increased tenfold in thirty years, and tripled just since 1990.
About one-third of this $3 trillion is so-called discretionary spending; the remaining two-thirds is deemed “mandatory” entitlement spending, which means mostly Social Security and Medicare. I’m sure many American voters would be shocked to know their elected representatives essentially have no say over two-thirds of the federal budget, but that is indeed the case. In fact the most disturbing problem with the budget is the utter lack of concern for the coming entitlement meltdown.
For those who thought a Democratic congress would end the war in Iraq, think again: their new budget proposes supplemental funds totaling about $150 billion in 2008 and $50 billion in 2009 for Iraq. This is in addition to the ordinary Department of Defense budget of more than $500 billion, which the Democrats propose increasing each year just like the Republicans. The substitute Republican budget is not much better: while it does call for freezing some discretionary spending next year, it increases military spending to make up the difference. The bottom line is that both the Democratic and Republican budget proposals call for more total spending in 2008 than 2007.
My message to my colleagues is simple: If you claim to support smaller government, don’t introduce budgets that increase spending over the previous year. Can any fiscal conservative in Congress honestly believe that overall federal spending cannot be cut 25%? We could cut spending by two-thirds and still have a federal government as large as it was in 1990. Congressional budgets essentially are meaningless documents, with no force of law beyond the coming fiscal year. Thus budget projections are nothing more than political posturing, designed to justify deficit spending in the near term by promising fiscal restraint in the future. But the time for thrift never seems to arrive: there is always some new domestic or foreign emergency that requires more spending than projected. The only certainty when it comes to federal budgets is that Congress will spend every penny budgeted and more during the fiscal year in question. All projections about revenues, tax rates, and spending in the future are nothing more than empty promises. Congress will pay no attention whatsoever to the 2008 budget in coming years.

Spending the Economy into Oblivion

In October of 2008, Congressman Paul used his "Texas Talk" to address spending and possibly spending far too much.

Spending the Economy into Oblivion
With news this week that Congress is poised to consider a new stimulus package, I am forced to again ask a question that seems silly in Washington: How will we pay for this?
While a few Members of Congress have raised the issue, it certainly was not the primary concern of the House Budget Committee when they interviewed Ben Bernanke on Monday. And, when they did direct this question to the Chairman of the Federal Reserve, his answer was the standard rhetoric about how Congress needed to make tough choices. Needless to say, not many specifics were discussed.
One of the most liberal members of the House, Barney Frank, has at least volunteered something of a suggestion: “We can let Iraq take care of itself.” This, of course, goes in the right direction, but hardly far enough.
We need to declare the facts and their obvious consequences. The deficit of the United States is now spiraling out of control, and the recent bailout package has only made it worse. Our crushing federal debt is one key reason behind our current economic turbulence.
As Congress begins to consider the third “stimulus package” of the year, we need to realize it is time to start setting priorities. Priority number one should be cutting spending in foreign countries. This does not simply mean Iraq, but everywhere.
The next stimulus package is likely to include money for infrastructure. While these investments are, constitutionally speaking, supposed to be made by state and local governments, it is not likely that Congress will suddenly begin to pay heed to the document we are all sworn to uphold. Still, we need to acknowledge the fact that the current Congress and Administration are rushing the nation toward bankruptcy.
This being the case, we could hope they would at least come to their senses regarding our debt and foreign spending sprees. Our nation’s foreign-held debt is at record highs and moving ever higher. Continuing to borrow money from Red China and others in order to pay “dues” to the United Nations and run “Plan Colombia” makes no sense at all.
Our whole carrot-and-stick approach to foreign policy makes no sense. The US government simultaneously gives money to Israel, and to Egypt. We send AIDS money to Africa while AIDS clinics in America shut down. “Millennium challenge” funding goes to countries which enact “market based reforms” as we push our own country further and further into a centrally planned economy.
Economic recovery will only come through financial prudence, savings and getting back to producing things of value again. But it seems to be a foregone conclusion that we are about to enact another government initiative to “stimulate the economy.” Instead, there should be some serious talk about cutting all of these foreign giveaway programs. But, alas and again, we should not hold our breath. Congress is still not close to being serious about ending its addiction to debt and spending, and is again faced with the deadly temptation to attempt to spend us out of a recession. We should not forget that in the 1930’s those types of efforts gave us the Great Depression.

When the Bills Come Due

In January of 2009, Congressman Paul spoke on the House floor about the impossibility of paying off the debt, the inflationary actions taken by the US, and the eventual necessary liquidation.

Is Spending the Answer?

In January of 2009 Congressman Paul used his "Texas Talk" to ask if spending was the appropriate answer to the question of what was needed for the economy.

Is Spending the Answer?
This week, Congress and the administration once again showed their lack of economic understanding, as they ramped up spending to record levels. On the surface, maybe it does look to some like the economic crisis is a liquidity problem, that the economy is in trouble because money is not changing hands at the pace it once did in the boom years. They believe that to get back to a booming economy money needs to start changing hands again – and the quickest way to do this is for the federal government to massively expand spending to pump new money into the system. If this is the extent of their understanding, no wonder they call for spending, taxing, bailouts and inflation.
If spending was the solution, we never would have had a problem. During the last eight years, we’ve blown up the size of government and certainly had no want of spending on foreign or domestic policy. The Bush administration increased spending almost 20 percent its first term, and nearly doubled the national debt by the end of the second term. Certainly the case cannot be made that lack of government spending created the problem or can be the solution.
This is mirrored in American households. According to CNN private sector debt is 365 percent of private sector gross domestic product. Many relied simply on steady and continued increase in home values to enable spending and secure more debt. That trend has proven unsustainable and many Americans are adjusting their finances accordingly. For the first time, household debt is beginning to fall as consumers wake up to the realities of paying off debt and living within their means.
Wouldn’t it be great if the government would do the same?
A lot of capital and liquidity is out there waiting in the wings as the new administration is bringing about government uncertainty, a concept discussed by Robert Higgs as prolonging the Great Depression. In other words, it is a foregone conclusion that government will act. But, like a chicken with its head cut off, no one knows which way it will run, just that it will flail about wildly until it collapses.
Why start a business, when businesses could face the brunt of an increase in future taxation? Similarly, why hire a new employee if tax policy will just force you to fire them later on to stay afloat? Why buy a house, when you have no idea how future government meddling in the housing market will affect its value? Why spend at the shopping mall, or buy a new car when you don’t know how tax policy will affect your family budget, or if your job will come under the axe because your employer’s tax burden is increased?
I argue these kinds of questions and concerns contribute to the weakening economy. This type of tax policy keeps capital out of third world nations, and now is keeping capital in hiding here in the US. People are concerned about security and savings again, retrenching their household and business budgets. The economy could be helped if the government would just get out of the way and restore sound monetary and fiscal policies.

Rejection of 2010 Budget

In April of 2009, Congressman Paul spoke on the House floor about his opposition to the budget for the next year and his belief that the projections are not realistic.

Spending Freeze Not Likely

In January of 2010, Congressman Paul used his "Texas Talk" address to discuss the fact that a spending freeze was not likely.

Spending Freeze Not Likely
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.

Another Raise to to the Debt Ceiling

In February of 2010, Congressman Paul used his "Texas Talk" address to note the raising of the federal debt limit and the need to return to free market economics.

More Spending is Always the Answer
Last week, the House approved another increase in the national debt ceiling. This means the government can borrow $1.9 trillion more to stay afloat and avoid default. It has been little more than a year since the last debt limit increase, and graphs showing the debt limit over time show a steep, almost vertical trend. It is not likely to be very long before this new ceiling is met and the government is back on the brink between default and borrowing us further into oblivion. Congressional leaders and the administration acknowledge that the debt limit will need to be increased again next year. They are crossing their fingers that the forecasts are correct and they will not need another increase sooner, even before the 2010 midterm elections.
Continually increasing the debt is one of the logical outcomes of Keynesianism, since more government spending is always their answer. It is claimed that government must not stop spending when the economy is so fragile. Government must act. Yet, when times are good, government also increases in size and scope, because we can afford it, it is claimed. There is never a good time to rein in government spending according to Keynesian economists and the proponents of big government.
Free market Austrian economists on the other hand know that times are bad because of the size and scope of government. The economy is fragile because of the overwhelming stranglehold of bureaucracy and taxation of Washington. Any jobs Washington might create through these endless spending programs are paid for through more taxation and debt put on the productive sectors of the economy. Just as insidious is the hidden tax of inflation caused by the Fed and its ever-expanding credit bubble. When the Fed steps in with its solutions, it only devalues the dollars in everyone’s pocket while encouraging more reckless waste on Wall Street. All of this leads to a worsening economy, not an improved one.
And so the downward spiral continues. The worse things get, the more politicians want to spend. The more they spend, the heavier the debt load becomes and the more we have to spend just to maintain our interest payments. As our debt load becomes unsustainable, the alarm of our creditors increases. It is becoming so serious that our credit rating, as a nation, could be downgraded. If this happens, interest on the national debt will increase even more, leading to even higher taxes on Americans and inevitably, price inflation.
Still, Washington is full of talk of more regulation, more taxation and more spending. The Senate is still struggling to pass a massive regulatory increase on the financial sector, even as the stock market suffers more shockwaves. Pay-as-you-go rules give the appearance of fiscal responsibility, but in truth these rules are only used as a justification to raise taxes. Spending programs like healthcare reform, increased military spending, and a recent doubling of destructive foreign aid are viewed by Washington as necessary and reasonable, instead of foolishness we absolutely cannot afford.
The people understand this, which is why there is so much anger directed at politicians. Washington needs to change its thinking and adopt some common sense priorities. The Constitution gives some excellent limitations that would get us back on the right path if we would simply abide by them. The framers of the Constitution understood that only the ingenuity of the American people, free from government interference, could get us through hard times, yet Washington seems bent only on prolonging the agony.

Opposition to Raising the Debt Ceiling - 2010

In November of 2010, Congressman Paul used his "Texas Talks" address to discuss his opposition to raising the debt ceiling.

Don't Raise the Debt Ceiling!
As of November 7th, the total U.S. public debt outstanding reached an astonishing $13.7 trillion. This means that although Congress just raised the debt ceiling to $14.3 trillion back in February, the new Congress will face another debt ceiling vote almost immediately next year. Otherwise, the Treasury will not be able to continue issuing debt to fund government operations.
The upcoming vote will provide an interesting litmus test for the new Republican congressional majority, especially those new members closely identified with Tea Party voters. The debt ceiling law, passed in 1917, enables Congress to place a statutory cap on the total amount of government debt rather than having to approve each individual Treasury bond offering. It also, however, forces Congress into an open and presumably somewhat shameful vote to approve more borrowing.
If the new Congress gives in to establishment pressure and media alarmism about “shutting down the government” by voting to increase the debt ceiling once again, you will know that the status quo has prevailed. You will know that Congress, despite the rhetoric of the midterm elections, is doing business as usual. You will know that the simple notion of balancing the budget, by limiting federal spending to federal revenue, remains a shallow and laughable campaign platitude.
Of course congressional leaders-- now Republicans-- will tell America that they plan on balancing the budget soon, but they just need some time. After all, we have to keep the government open, right? We can’t have an “emergency” shutdown of vital government services. But somehow Congress always finds money for emergency spending, in the form of supplemental appropriations bills for TARP bailouts, troop surges, and the like. Why is there never an emergency that justifies less spending???
Surely we are facing an emergency debt spiral, as evidenced by the Federal Reserve’s recent commitment to buy another round of Treasury debt. It’s now quite obvious that the U.S. government plans to inflate its way out of debt, and the world is fleeing our dollar in response. Just 7 years ago Congress raised the debt ceiling to $6.4 trillion, which means the federal government had doubled its indebtedness in less than a decade. Annual deficits for 2011 and beyond are projected to be at least $1 trillion. By contrast, the entire federal debt amassed from the founding of our nation until President Reagan took office in 1981-- a period of roughly 200 years-- was $1 trillion. So it’s no exaggeration to state that federal debt is growing exponentially.
I have two simple proposals when the new Congress convenes in January. First, refuse to raise the debt ceiling. Find a way, month by month, for Congress to spend only what the Treasury raises in revenue. Second, start over from scratch with the 13 appropriations bills that fund the federal government. Reject any talk of baseline budgets or discretionary spending. It is all discretionary, and members of both parties should vote against any 2012 appropriation bill that is not at least 10% smaller-- in nominal dollars-- than its 2011 counterpart.
A motivated Congress could begin to slow the tide of debt by taking the simple step of cutting federal spending by 10% across the board for the next few years. Let’s hope it does not take the complete collapse of the U.S. dollar to provide this motivation.

Morning Joe Appearance

In December of 2010, Congressman Paul appeared on the MSNBC show Morning Joe. He spoke about the debt ceiling, overall spending practices, and military spending.

Dylan Ratigan

In January of 2011, Congressman Paul appeared on the MSNBC Show Dylan Ratigan. He spoke about the debt and it's relation to inflation. He notes that the US can simply default by debasing the currency.

Congress Must Reject Welfare/Warfare State

In February of 2011, Congressman Paul used his "Texas Talk" to discuss the welfare / warfare state and the lack of true reduction in spending in the 2011 budget.

Congress Must Reject the Welfare/Warfare State
During the past few weeks, Congress has been locked in a battle to pass a continuing resolution to fund government operations through September. Both supporters and opponents of the bill, HR 1, claim it is a serious attempt to reduce federal spending. However, an examination of the details of the bill call that claim into question. For one thing, the oft-cited assertion that HR 1 reduces spending by $99 billion is misleading. The $99 billion figure merely represents the amount that HR 1 reduces spending from the President’s proposed Fiscal Year 2011 budget - not reductions in actual spending. Trying to claim credit for a reduction in spending based on cuts in proposed spending is like claiming someone is following a diet because he had only five slices of pizza when he intended to have 10 slices!
In fact, HR 1 only reduces real federal spending by $66 billion compared to last year’s budget. This may seem like a lot to the average American but in the context of an overwhelming trillion-dollar budget and a national debt that could exceed 100 percent of GNP in September, it is barely a drop in the bucket.
One reason that HR 1 does not cut spending enough is that too many fiscal conservatives continue to embrace the fallacy that we can balance the budget without reducing spending on militarism. Until Congress realizes the folly of spending trillions pretending to impose democracy on the world we will never be able to seriously reduce spending.
Congress must not only reject the warfare state, it must also reject the welfare state. HR 1 is more aggressive in ending domestic spending than foreign spending, and does zero out some objectionable federal programs such as AmeriCorps. However, HR 1 leaves most of the current functions of the federal government undisturbed. This bill thus continues the delusion that we can have a fiscally responsible and efficient welfare state.
The failure to even attempt to address the serious threat the welfare-warfare state poses to American liberty and prosperity is the main reason why supporters of limited government and individual liberty ultimately should find HR 1 unsatisfactory. Only a rejection of the view that Congress can run the economy, run our lives, and run the world will allow us to make the spending reductions necessary to avert a serious financial crisis. This does not mean we should not prioritize and discuss how to gradually transition away from the welfare state in a manner that does not harm those currently relying on these programs. However, we must go beyond balancing the budget to transitioning back to a free society, and that means eventually placing responsibility for social welfare back in the hands of individuals and private institutions.
Despite the overheated rhetoric heard during the debate, HR 1 is a diversion from the difficult task of restoring constitutional government and a free economy and society. It is time for Congress to get serious about cutting spending, not merely tinkering around the edges of the proposed budget and kicking the can down the road for future generations. If we fail to act decisively now, there will soon come a time when both our money and our capacity to borrow will run out. When that happens, our ability to negotiate and play political games with spending priorities will be over. To avoid real chaos, the time to start dealing with our bloated government budget is right now.

So Far From Reality

On March 10, 2011 Congressman Paul appeared on Fox News and spoke about the impending vote to increase the debt. He states that eventually spending will be repudiated by an eventual bankruptcy as so much of the dollar is printed to pay the debt that it loses it's value.

Opposition to Continuing Resolutions

In March of 2011, Congressman Paul appeared on Freedom Watch with Judge Napolitano and spoke about spending and the destruction of the dollar.

South Carolina Debate

In May of 2011, Congressman Paul participated in the Republican debate in South Carolina. He speaks about his views concerning the role of government and it's relation to debt.

Iowa Debate

In August of 2011, Congressman Paul participated in the Republican Presidential debate in Ames, Iowa. He spoke about the need to make real cuts in the economy, and the need to control the monetary supply.

BAIER: OK.
Congressman Paul, as you know, when Standard & Poor's downgraded the country's credit rating last week, one of the reasons S&P listed was because of partisan gridlock in Washington. Congressman, what specific things would you do as president to increase growth, calm the markets, create jobs that could pass through a divided Congress?
PAUL: Well, they didn't downgrade it mainly because they couldn't come to a conclusion. They couldn't come to a conclusion because they didn't know what was going on. The country's bankrupt, and nobody wanted to admit it. And when you're bankrupt, you can't keep spending.
And all these proposed cuts weren't cuts at all. What you have to do is restore sound money. You have to understand why you have a business cycle, why you have booms and busts. If you don't do that, there's no way you can solve these problems.
And the booms and busts comes from a failed monetary system that -- the interest rates that are way lower than -- than they should be encourages malinvestment and debt. And to get out of that, all this other tinkering, you cannot do that unless you liquidate debt. You don't bail out the people that are bankrupt and dump the debt on the people. That is what's happened.
So you have to allow liquidation of debt, eliminate the malinvestment. Then you go back and you can get growth again by having a better tax structure, lower taxes, invite capital back into this country, get a lot less regulations. And under those conditions, you can have growth again.
BAIER: And you can get it through a divided Congress?
PAUL: Well... (LAUGHTER)
The divided Congress will exist for a long time to come. Yes, you would have to get it through a -- you'd have to get it through a divided Congress. But the one thing is, if you approach it constitutionally and if you approach it on the principles of liberty, you can bring people together.
If we have to cut, maybe we wouldn't be so -- so determined that you can't cut one nickel out of the militarism around the world. Neither the Democrats or the Republicans want to cut that. So if you want to cut, you have to put the militarism on the table, as well. (APPLAUSE)

The Western Debate

In October of 2011, Congressman Paul participated in the Western Debate in Las Vegas. He was asked about defense spending and military spending. He notes his support for ending the empire building in the world and lessening the number of soldiers overseas.

COOPER: Congressman Paul, you've proposed --
(APPLAUSE)
COOPER: Congressman Paul, you just proposed eliminating the Departments of Commerce, Education, Energy, Interior, Housing and Urban Development. You say it will save a trillion dollars in one year.
(APPLAUSE)
COOPER: You're proposing a 15 percent cut to the Defense Department. Can you guarantee national security will not be hurt by that?
PAUL: I think it would be enhanced. I don't want to cut any defense. And you have to get it straight. There's a lot of money spent in the military budget that doesn't do any good for our defense.
How does it help us to keep troops in Korea all these years? We're broke. We have to borrow this money.
Why are we in Japan? Why do we subsidize Germany, and they subsidize their socialized system over there? Because we pay for it. We're broke.
And this whole thing that this can't be on the table, I'll tell you what, this debt bubble is the thing you better really worry about, because it's imploding on us right now. It's worldwide.
We are no more removed from this than man the man on the moon. It's going to get much worse.
And to cut military spending is a wise thing to do. We would be safer if we weren't in so many places.
We have an empire. We can't afford it. The empires always bring great nations down. We spread ourselves too thinly around the world. This is what's happened throughout history, and we're doing it to ourselves.
The most recent empire to fail was an empire that went into, of all places, Afghanistan...
COOPER: Time.
PAUL: ... they went broke. So where are we? In Afghanistan. I say it's time to come home. (CHEERING AND APPLAUSE)
COOPER: It's time.

Michigan Economic Debate

On November 10, 2011 Congressman Paul participated in the Michigan Economic Debate. He spoke there about international debt, US debt, and the housing industry. He also states that spending is a tax.

CRAMER: Congressman Paul...
(APPLAUSE)
(inaudible) to say, and I really get that. But I'm on the frontlines of the stock market. We were down 400 points today. We're not going to be done going down if this keeps going on, if Italy keeps -- the rates keep going up. Surely you must recognize that this is a moment-to-moment situation for people who have 401(k)s and IRAs on the line and you wouldn't just let it fail, just go away and take our banking system with it?
PAUL: No, you have to let it -- you have to let it liquidate. We've had -- we took 40 years to build up this worldwide debt. We're in a debt crisis never seen before in our history. The sovereign debt of this world is equal to the GDP, as ours is in this country. If you prop it up, you'll do exactly what we did in the depression, prolong the agony. If you do -- if you prop it up, you do what Japan has done for 20 years.
So, yes, you want to liquidate the debt. The debt is unsustainable. And this bubble was predictable, because 40 years ago we had no restraints whatsoever on the monetary authorities, and we piled debt on debt, we pyramided debt, we had no restraints on the spending. And if you keep bailing people out and prop it up, you just prolong the agony, as we're doing in the housing bubble.
PAUL: Right now, Fannie Mae and Freddie Mac are demanding more money because we don't allow the market to determine what these mortgages are worth. If you don't liquidate this and clear the market, believe me, you're going to perpetuate this for a decade or two more, and that is very, very dangerous.
CRAMER: Governor...
(APPLAUSE)
(inaudible) Italy's too big to fail. It's great. I'd love it if we were independent. It would be terrific to say, "It's your fault. It's your fault. It's your problem." But if this goes, the world banking system could shut down. Doesn't that involve our banks, too?

2012 Campaign Website Statements

SPENDING:
Cuts $1 trillion in spending during the first year of Ron Paul’s presidency, eliminating five cabinet departments (Energy, HUD, Commerce, Interior, and Education), abolishing the Transportation Security Administration and returning responsibility for security to private property owners, abolishing corporate subsidies, stopping foreign aid, ending foreign wars, and returning most other spending to 2006 levels.

Voting Record

Balanced Budget Amendment

In November of 2011, the House voted on a balanced budget amendment to the Constitution. This particular amendment would have required a three-fifths rollcall vote of each chamber for the congress to spend more than it took in and to increase the public debt limit. It also authorized waivers when a declaration of war is in effect or under other specified circumstances involving military conflict. The measure did not achieve the 3/5 needed to pass in a 261-165 vote. Ron Paul cast a "No Vote"

Budget Control Act of 2011

In August of 2011, the House voted on the Budget Control Act of 2011. The legislation raised the debt ceiling in increments and created a committee to find cuts in the budget or other methods to lower the deficit. The measure passed 269-161. Ron Paul voted against the Budget Control Act of 2011.

Ron Paul voted against the Budget Control Act of 2011.

Cut, Cap, and Balance Act of 2011

In July of 2011, the House voted on legislation to cut spending on discretionary and other items, cap the amount the federal government can spend as a function of GDP, and require a balanced budget. The legisaltion also provided for an increase in the debt limit. The measure passed the House in a 234-190 vote. Ron Paul voted against the cut, cap, and balance plan.

Ron Paul voted against the cut, cap, and balance plan.

Increasing the statutory debt limit

In May of 2011, the House voted on an increase in the statutory debt limit from $14.294 trillion to $16.7 trillion. The increase failed to pass by a vote of 97-318. It was never voted on in the Senate. Ron Paul voted against the debt ceiling increase.

Ron Paul voted against the debt ceiling increase.

Return to 2008 Spending Levels

In January of 2011, the House voted on a bill to reduce spending on non-security items to fiscal year 2008 levels. The measure passed 254-165. Ron Paul voted in favor of reducing spending to 2008 levels.

Ron Paul voted in favor of reducing spending to 2008 levels.

Debt Ceiling Increase to $14.294 Trillion

In February of 2010, the House voted to pass legislation that dealt with PAYGO rules and increased the debt ceiling to $14.294 trillion. The vote passed 233-187. Ron Paul voted against the debt increase.

Ron Paul voted against the debt increase.

Increasing the Debt Ceiling to $12.394 trillion

In December of 2009, the House voted to increase the debt ceiling to $12.394 trillion. The measure passed 218-214. Ron Paul voted against increasing the debt limit.

Ron Paul voted against increasing the debt limit.

Stimulus - Debt Ceiling Increase to $12.104 trillion

In January of 2009, the House voted to pass the American Recovery and Reinvestment Act - otherwise known as the stimulus. The act passed 244-188 and contained language to increase the debt ceiling to $12.104 trillion. Ron Paul voted against passing the legislation that contained a debt ceiling increase.

Ron Paul voted against passing the legislation that contained a debt ceiling increase.

TARP - Debt Ceiling Increase to $11.315 trillion

In October of 2008, the House voted to pass the Emergency Economic Stabilization Act - TARP. Within the act, the debt limit was increased to $11.315 trillion. The legislation passed the House 263-171. Ron Paul voted against increasing the debt limit to $11.315 trillion.

Ron Paul voted against increasing the debt limit to $11.315 trillion.

Housing and Economic Recovery Act of 2008 - Debt Ceiling Increase to $10.615 trillion

In August of 2007, the House passed the Housing and Economic Recovery Act of 2008. Included in that legislation was an increase to the debt ceiling to $10.615 trillion. The legislation passed the House 241-172. Ron Paul cast a "No Vote"

Congressional Budget - Raising the Debt Ceiling to $9.815 trillion

In May of 2007, the House voted to pass the budget for that year. Within the budget was a measure that increased the debt ceiling to $9.815 trillion. The budget passed 214-209. Ron Paul voted against the budget which contained a debt ceiling increase to $9.815 trillion.

Ron Paul voted against the budget which contained a debt ceiling increase to $9.815 trillion.

Budget - Debt Ceiling Increase to $8.965 trillion

In April of 2005, the House passed H Con Res 95 which was the budget. Within that legislation was language to increase the debt ceiling to $8.965 trillion. The legislation passed 214-211. Ron Paul cast a "No Vote"

Debt Ceiling Increase to $8.184 trillion

In November of 2004, the House passed legislation to increase the debt ceiling to $8.184 trillion. The legislation passed 208-204. Ron Paul voted against increasing the debt ceiling to $8.184 trillion.

Ron Paul voted against increasing the debt ceiling to $8.184 trillion.

Debt Ceiling Increase to $7.384 trillion

In April of 2003, the House passed a budget that contained an increase in the debt ceiling to $7.384 trillion. This measure passed the House 216-211. Ron Paul cast a "No Vote"

Debt Ceiling Increase to $6.4 trillion

In June of 2002, the House voted to pass legislation to enact an increase to the debt ceiling to $6.4 trillion. The measure passed 215-214. Ron Paul voted against the debt ceiling increase to $6.4 trillion.

Ron Paul voted against the debt ceiling increase to $6.4 trillion.

Balanced Budget Act - Debt Ceiling Increase to $5.95 trillion

In June of 1997, the House passed the Balanced Budget Act of 1997. This legislation included an increase in the debt ceiling to $5.95 trillion and a line item veto for the President which was later ruled unconstitutional by the Supreme Court. The measure initially passed the House in roll call 241, and it's final passage was in roll call 345 346-85. Ron Paul voted against this legislation, which included an increase in the debt ceiling to $5.95 trillion.

Ron Paul voted against this legislation, which included an increase in the debt ceiling to $5.95 trillion.