[Congressional Record Volume 154, Number 112 (Wednesday, July 9, 2008)]
[Extensions of Remarks]
[Pages E1424-E1425]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       SOMETHING BIG IS HAPPENING

                                 ______
                                 

                             HON. RON PAUL

                                of texas

                    in the house of representatives

                        Wednesday, July 9, 2008

  Mr. PAUL. Madam Speaker, I have, for the past 35 years, expressed my 
grave concern for the future of America. The course we have taken over 
the past century has threatened our liberties, security and prosperity. 
In spite of these long-held concerns, I have days--growing more 
frequent all the time--when I'm convinced the time is now upon us that 
some Big Events are about to occur. These fast-approaching events will 
not go unnoticed. They will affect all of us. They will not be limited 
to just some areas of our country. The world economy and political 
system will share in the chaos about to be unleashed.
  Though the world has long suffered from the senselessness of wars 
that should have been avoided, my greatest fear is that the course on 
which we find ourselves will bring even greater conflict and economic 
suffering to the innocent people of the world--unless we quickly change 
our ways.
  America, with her traditions of free markets and property rights, led 
the way toward great wealth and progress throughout the world as well 
as at home. Since we have lost our confidence in the principles of 
liberty, self reliance, hard work and frugality, and instead took on 
empire building, financed through inflation and debt, all this has 
changed. This is indeed frightening and an historic event.
  The problem we face is not new in history. Authoritarianism has been 
around a long time. For centuries, inflation and debt have been used by 
tyrants to hold power, promote aggression, and provide ``bread and 
circuses'' for the people. The notion that a country can afford ``guns 
and butter'' with no significant penalty existed even before the 1960s 
when it became a popular slogan. It was then, though, we were told the 
Vietnam War and a massive expansion of the welfare state were not 
problems. The seventies proved that assumption wrong.
  Today things are different from even ancient times or the 1970s. 
There is something to the argument that we are now a global economy. 
The world has more people and is more integrated due to modern 
technology, communications, and travel. If modern technology had been 
used to promote the ideas of liberty, free markets, sound money and 
trade, it would have ushered in a new golden age--a globalism we could 
accept.
  Instead, the wealth and freedom we now enjoy are shrinking and rest 
upon a fragile philosophic infrastructure. It is not unlike the levies 
and bridges in our own country that our system of war and welfare has 
caused us to ignore.
  I'm fearful that my concerns have been legitimate and may even be 
worse than I first thought. They are now at our doorstep. Time is short 
for making a course correction before this grand experiment in liberty 
goes into deep hibernation.
  There are reasons to believe this coming crisis is different and 
bigger than the world has ever experienced. Instead of using globalism 
in a positive fashion, it's been used to globalize all of the mistakes 
of the politicians, bureaucrats and central bankers.
  Being an unchallenged sole superpower was never accepted by us with a 
sense of humility and respect. Our arrogance and aggressiveness have 
been used to promote a world empire backed by the most powerful army of 
history. This type of globalist intervention creates problems for all 
citizens of the world and fails to contribute to the well-being of the 
world's populations. Just think how our personal liberties have been 
trashed here at home in the last decade.
  The financial crisis, still in its early stages, is apparent to 
everyone: gasoline prices over $4 a gallon; skyrocketing education and 
medical-care costs; the collapse of the housing bubble; the bursting of 
the NASDAQ bubble; stock markets plunging; unemployment rising; massive 
underemployment; excessive government debt; and unmanageable personal 
debt. Little doubt exists as to whether we'll get stagflation. The 
question that will soon be asked is: When will the stagflation become 
an inflationary depression?

[[Page E1425]]

  There are various reasons that the world economy has been globalized 
and the problems we face are worldwide. We cannot understand what we're 
facing without understanding fiat money and the long-developing dollar 
bubble.
  There were several stages. From the inception of the Federal Reserve 
System in 1913 to 1933, the Central Bank established itself as the 
official dollar manager. By 1933, Americans could no longer own gold, 
thus removing restraint on the Federal Reserve to inflate for war and 
welfare.
  By 1945, further restraints were removed by creating the Bretton-
Woods Monetary System making the dollar the reserve currency of the 
world. This system lasted up until 1971. During the period between 1945 
and 1971, some restraints on the Fed remained in place. Foreigners, but 
not Americans, could convert dollars to gold at $35 an ounce. Due to 
the excessive dollars being created, that system came to an end in 
1971.
  It's the post Bretton-Woods system that was responsible for 
globalizing inflation and markets and for generating a gigantic 
worldwide dollar bubble. That bubble is now bursting, and we're seeing 
what it's like to suffer the consequences of the many previous economic 
errors.
  Ironically in these past 35 years, we have benefited from this very 
flawed system. Because the world accepted dollars as if they were gold, 
we only had to counterfeit more dollars, spend them overseas 
(indirectly encouraging our jobs to go overseas as well) and enjoy 
unearned prosperity. Those who took our dollars and gave us goods and 
services were only too anxious to loan those dollars back to us. This 
allowed us to export our inflation and delay the consequences we now 
are starting to see.
  But it was never destined to last, and now we have to pay the piper. 
Our huge foreign debt must be paid or liquidated. Our entitlements are 
coming due just as the world has become more reluctant to hold dollars. 
The consequence of that decision is price inflation in this country--
and that's what we are witnessing today. Already price inflation 
overseas is even higher than here at home as a consequence of foreign 
central banks' willingness to monetize our debt.
  Printing dollars over long periods of time may not immediately push 
prices up--yet in time it always does. Now we're seeing catch-up for 
past inflating of the monetary supply. As bad as it is today with $4 a 
gallon gasoline, this is just the beginning. It's a gross distraction 
to hound away at ``drill, drill, drill'' as a solution to the dollar 
crisis and high gasoline prices. Its okay to let the market increase 
supplies and drill, but that issue is a gross distraction from the sins 
of deficits and Federal Reserve monetary shenanigans.
  This bubble is different and bigger for another reason. The central 
banks of the world secretly collude to centrally plan the world 
economy. I'm convinced that agreements among central banks to 
``monetize'' U.S. debt these past 15 years have existed, although 
secretly and out of the reach of any oversight of anyone--especially 
the U.S. Congress that doesn't care, or just flat doesn't understand. 
As this ``gift'' to us comes to an end, our problems worsen. The 
central banks and the various governments are very powerful, but 
eventually the markets overwhelm when the people who get stuck holding 
the bag (of bad dollars) catch on and spend the dollars into the 
economy with emotional zeal, thus igniting inflationary fever.
  This time--since there are so many dollars and so many countries 
involved--the Fed has been able to ``paper'' over every approaching 
crisis for the past 15 years, especially with Alan Greenspan as 
Chairman of the Federal Reserve Board, which has allowed the bubble to 
become history's greatest.

  The mistakes made with excessive credit at artificially low rates are 
huge, and the market is demanding a correction. This involves excessive 
debt, misdirected investments, over-investments, and all the other 
problems caused by the government when spending the money they should 
never have had. Foreign militarism, welfare handouts and $80 trillion 
entitlement promises are all coming to an end. We don't have the money 
or the wealth-creating capacity to catch up and care for all the needs 
that now exist because we rejected the market economy, sound money, 
self reliance and the principles of liberty.
  Since the correction of all this misallocation of resources is 
necessary and must come, one can look for some good that may come as 
this ``Big Even'' unfolds.
  There are two choices that people can make. The one choice that is 
unavailable to us is to limp along with the status quo and prop up the 
system with more debt, inflation and lies. That won't happen.
  One of the two choices, and the one chosen so often by government in 
the past is that of rejecting the principles of liberty and resorting 
to even bigger and more authoritarian government. Some argue that 
giving dictatorial powers to the President, just as we have allowed him 
to run the American empire, is what we should do. That's the great 
danger, and in this post-911 atmosphere, too many Americans are seeking 
safety over freedom. We have already lost too many of our personal 
liberties already. Real fear of economic collapse could prompt central 
planners to act to such a degree that the New Deal of the 30's might 
look like Jefferson's Declaration of Independence.
  The more the government is allowed to do in taking over and running 
the economy, the deeper the depression gets and the longer it lasts. 
That was the story of the 30s and the early 40s, and the same mistakes 
are likely to be made again if we do not wake up.
  But the good news is that it need not be so bad if we do the right 
thing. I saw ``Something Big'' happening in the past 18 months on the 
campaign trail. I was encouraged that we are capable of waking up and 
doing the right thing. I have literally met thousands of high school 
and college kids who are quite willing to accept the challenge and 
responsibility of a free society and reject the cradle-to-grave welfare 
that is promised them by so many do-good politicians.
  If more hear the message of liberty, more will join in this effort. 
The failure of our foreign policy, welfare system, and monetary 
policies and virtually all government solutions are so readily 
apparent, it doesn't take that much convincing. But the positive 
message of how freedom works and why it's possible is what is urgently 
needed.
  One of the best parts of accepting self reliance in a free society is 
that true personal satisfaction with one's own life can be achieved. 
This doesn't happen when the government assumes the role of guardian, 
parent or provider, because it eliminates a sense of pride. But the 
real problem is the government can't provide the safety and economic 
security that it claims. The so called good that government claims it 
can deliver is always achieved at the expense of someone else's 
freedom. It's a failed system and the young people know it.
  Restoring a free society doesn't eliminate the need to get our house 
in order and to pay for the extravagant spending. But the pain would 
not be long-lasting if we did the right things, and best of all the 
empire would have to end for financial reasons. Our wars would stop, 
the attack on civil liberties would cease, and prosperity would return. 
The choices are clear: it shouldn't be difficult, but the big event now 
unfolding gives us a great opportunity to reverse the tide and resume 
the truly great American Revolution started in 1776. Opportunity knocks 
in spite of the urgency and the dangers we face.
  Let's make ``Something Big Is Happening'' be the discovery that 
freedom works and is popular and the big economic and political event 
we're witnessing is a blessing in disguise.

                          ____________________