[Congressional Record Volume 156, Number 133 (Wednesday, September 29, 2010)]
[Extensions of Remarks]
[Page E1864]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF H.R. 2378, CURRENCY REFORM FOR FAIR 
                               TRADE ACT

                                 ______
                                 

                               speech of

                             HON. RON PAUL

                                of texas

                    in the house of representatives

                     Wednesday, September 29, 2010

  Mr. PAUL. Mr. Speaker, the imbalances in international trade, and in 
particular trade between China and the United States, have prompted 
many to demand a realignment of the Chinese yuan and the American 
dollar. Since we are running a huge trade deficit with China the call 
now is for a stronger yuan and a weaker dollar. This trade imbalance 
problem will not be solved so easily.
  I would urge my colleagues to consider the benefits we receive from 
our relationship with China, one of which is that American consumers 
benefit from lower-priced goods. Adopting the policy urged by 
supporters of this bill would cause consumer prices to increase, thus 
reducing consumers' wealth. Other producers would suffer as a result of 
the consumers' decreased purchasing power. I doubt that many of our 
constituents want us to increase the prices they pay for goods and 
services.
  Congress should also consider how the Chinese benefit the United 
States government by holding our debt. The dollars the Chinese acquire 
by selling us goods and services must be returned to the United States. 
Since the Chinese are not buying an equivalent amount of American goods 
and services, they are using the dollars to finance Congress' 
extravagant spending.
  This deep and legitimate concern for the trade imbalance between 
China and the U.S. will fall short if the issue of fluctuating, world-
wide fiat currencies is not addressed. The fact that the U.S. dollar is 
the principal reserve currency of the world gives us a benefit that 
others do not enjoy. It allows us to export paper dollars and import 
goods manufactured in countries with cheap labor. It also allows us to 
finance the welfare/warfare state with cheap loans from China and 
Japan. It's a good deal for the government but according to economic 
law must come to an end, and the end will be messy for the U.S. 
consumer and for world trade.
  Our current account deficit and huge foreign indebtedness is a 
reflection of the world monetary system of fiat money. The longer the 
trade imbalances last, the more difficult the adjustment will be. The 
market will eventually force these adjustments on us.
  Instead of having fluctuating currency exchange rates and the 
inevitable instability that accompanies them, we should be working to 
establish a commodity-backed currency whose value is determined by the 
market. This would provide an objective measurement of the value of 
economic goods and services and thus strengthen the economy by freeing 
it from the negative effects of our unstable monetary policy.
  Instead of promoting global economic government, the United States 
Congress should reform those policies that reduce our manufacturers' 
competitiveness. The taxes and regulations imposed on American 
businesses are damaging economic growth and killing jobs. If we were 
serious about creating jobs, we would be working on an aggressive 
agenda of cutting taxes and repealing needless regulations.
  Congress can also improve America's competitive position by ending 
the practice of forcing American workers to subsidize their foreign 
competitors through organizations such as the Export-Import Bank and 
the International Monetary Fund.
  In conclusion, Mr. Speaker, I remind my colleagues that stability in 
currencies is something we should seek, not something we should 
condemn. The bill before us today will not solve our problems. In fact, 
by refusing to address the economic stability created by fiat currency 
and instead embracing protectionism, it will further weaken the 
American economy.

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