From The Founder's Desk
columnist: Walt Thiessen

Topic: Ron Paul
Why I Continue To Be Optimistic About Ron Paul

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In the disappointing aftermath of the New Hampshire primary, there are reasons to be hopeful about the campaign moving forward.

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by Walt Thiessen
(Libertarian)
Thursday, January 10, 2008

As I skimmed many of the articles and posts on the 'net at Paulite websites in the aftermath of the New Hampshire primary, I found a mixture of disappointment and hope. Some are criticizing the Paul campaign for its lack of experience and choice of TV commercials. Some are lamenting the fact that Dr. Paul was kept off Fox TV and continues to be disrespected by much of the media. Some are pointing out that this is a long-term educational challenge that we have to face regardless of whether Paul wins the Republican nomination. Some bemoaned the state of the Republican Party today (rightfully so). One poster who is also a Wall Street analyst (so he claimed) did some analysis on the numbers coming out of New Hampshire to show that there may actually be an undercount of Paul's vote in that state. He is far from being the only person making that kind of claim today.

I'd like to suggest an alternative response to New Hampshire. I think we should be very optimistic. It's hard to do that when you've been figuratively kicked in the teeth. Nevertheless, that's precisely what I'm doing. Here's why.

First of all, I should say that I have more reason than most to be unhappy this morning. All the traffic that has been coming to the website is maxxing out my current server, and people are sometimes having trouble getting to the articles and publishing their stuff. That's why I haven't been able to pay much attention to the NH primary. Half of Sunday, all of Monday, and most of Tuesday and Wednesday I've been on the phones and on the net researching a good, affordable dedicated server to move the site to so that we can handle whatever web traffic comes our way, no matter how much that is. It's made my life miserable. Yet, there's an obvious silver lining. All that web traffic we're getting means that people are starving for what we've got here. So once I get all this ironed out, things should start improving.

Despite all these challenges, I'm feeling very optimistic this morning. Here's why.

When I look at the future, I see a bright horizon for us. What Dr. Paul's campaign has done is awaken a significant segment of the population from their apathy. They are now angry about what has been happening to our country from within. They've turned their motivation into action and formed what we now know is the greatest grassroots movement to spring up in recent times in this country. One of the biggest challenges has been to replace the anger with hope for the future, as well as taking action in our local meetup groups, in our websites both here at the Nolan Chart and across the web as well as in our offline activities. Even though there's always the chance that Paul won't be elected, I have every reason to believe that the movement that spawned his campaign success will continue far beyond 2008. I'll describe next what I think would happen if Ron became President Paul, but the scenario works just fine (albeit with a longer and more troublesome time frame) even if he doesn't get elected as the movement continues to grow anyway.

President Paul

Assume for the sake of discussion that Ron Paul wins the 2008 election and is sworn into office on January 20, 2009 as our 44th president. What will he do in office? Here's my guess as to what his priorities will be, and what their consequences will be for our country.

Clearly, one of his first moves will be to instruct his military advisors to draw up a plan for drawing our troops out of Iraq (and out of other countries around the world) in a manner that is consistent with the safety of our troops and the continued defense of our country. He would probably issue a major foreign policy address announcing that America, in essence, will no longer be the policeman to the world. The emphasis will be on defense rather than on offense, so we can bring our national budget under control and help slow the plummeting value of the dollar. This will undoubtedly create shockwaves, as other countries who have been relying on our largess to defend their own borders will realize that the burden is now on their own governments to make sure they are protected from attack. This is will be a significant improvement for both them and us.

Handling the Monetary Crisis

Next I expect President Paul will address the Federal Reserve issue. Most Americans are still relatively unaware of just how much damage the Fed has done to our economy, particularly over the past 10-20 years. Every time they "stimulate" our economy, the method they use produces short-term gains on Wall Street and in the investment community, but it also leads eventually to more poverty for all who are not major investors (most of the country), thus increasing the famous gap between the haves and the have nots. The Fed can only stimulate the economy by adjusting interest rates downward. Each time they do this, they effectively increase the money supply. The new money goes into the investment community, which is why they get so happy every time the Fed does this.

The reason Fed intervention causes problems is that when you keep increasing the dollar supply, the value of each dollar necessarily decreases. The Fed has been intervening so much that the U.S. dollar is now worth less than the Canadian dollar. It wasn't so long ago that the Canadian dollar was worth only 70 cents for every U.S. dollar. It isn't that the Canadian dollar has grown any stronger. It hasn't. Compared to other world currencies it has barely budged at all. The entire reason for the Canadian dollar being worth more than the U.S. dollar is that our dollar has plummeted. And when did the most dramatic plummeting begin? It began the moment that President Bush invaded Iraq.

President Paul Moves the U.S. Toward a Stronger Currency

Ron Paul has repeatedly promised that he will work to repeal current Federal law that prohibits private currency from competing with the U.S. Dollar, so that we can transition away from the Federal Reserve system. This would allow companies like NORFED, which the FBI raided last Fall for coining an alternative gold and silver money supply, to be back in business. It would also encourage larger companies, including banks, credit card companies, etc. to become involved in hard money issuance and distribution. Wouldn't it be nice to have a Gold Master Card that was really denominated in gold, rather than in paper money that is worth less and less as time goes on!!!

It's interesting to note that after NORFED was raided by the Feds, the gold and silver "Liberty Dollars" that they had issued at or above spot metal prices over the years suddenly and dramatically increased in value. Ebay auctions went crazy as coin collectors started grabbing them up, in the belief that NORFED would never be able to issue such coins again. One ounce gold uncirculated Liberty Dollar coins that are worth about $850 in the gold market have been selling in the $3,000 range on Ebay. That should show you two things. First, it shows the true value of gold-based currency. Second, it shows just how weak the paper dollar is. The FBI and the U.S. Treasury have claimed that NORFED was ripping off their customers, but their customers would heartily disagree. If they were being ripped off, then the value of their investments should have dropped after NORFED was shut down. Instead, the exact opposite occurred. Everyone who invested in NORFED "Liberty Dollars" profited enormously after the raid. This clearly shows the lie behind the government's claims.

The Economy Turns Around And Improves

This new approach to currency would have two rapid impacts. The first is that retail merchants would be eager to start accepting the new gold and silver currencies, which hold their value so much better than paper money does. The second major impact is that once it's legal to compete with paper money in the U.S., private electronic exchanges of gold and silver currency would take off. This would provide an orderly retreat from paper money to hard money, so that even the most poor people could benefit from it. President Paul would probably have to ask Congress to pass legislation preventing employers from paying wages solely in paper money. If the employee requests to be paid in hard domestic currency, employers should not be able to deny them that request. Otherwise, it would be a short-term license to bankrupt the poor, and I'm certain that no one would want that.

Republican economists of the past loved to talk about the "trickle down" theory of economics, which has proven to be laughable. This is rather appropriate, since their ideas were largely based on the Laffer curve theory. But a Paul presidency would emphasize "trickle up" economics, where growth comes from the bottom up. The new currency laws would accomplish exactly that. By putting hard money into the hands of the poorest of people, the foundation would be established to rebuild our country in a way that everyone can participate in, not just the rich, Wall Street, and the politically connected. For the first time in their lifetimes, the poor and middle classes would be able to participate in real economic growth rather than suffering from the hidden (and rarely blamed) fallout caused by Fed stimulated growth.

U.S. Spending, Social Security, and Medicare

Next on the Paul agenda would have to be rebalancing the Federal budget while providing ways for the little guy to get out from under the massive obligations that have been dumped on him by the Federal government. Individuals would be permitted to opt out of Social Security and Medicare. This would instantly reduce the long-term demand for those services, which is curently expected to start outstripping our ability to pay for them starting in just 10 years. By opting out, these people would make themselves ineligible for those programs, which would act like a pressure release valve. It would also permit these same individuals to start keeping the money that is taken from them via Social Security and Medicare taxes right now. The legislation making the change would have to include a provision that requires employers to pay directly to employees the share of these taxes that the employers have been paying directly, since that money is actually considered by most employers to be part of the employee's overall salary and wage package. Allowing employers to get richer by keeping money they would otherwise pay to their employees' retirement (via Social Security) and health care (via Medicare) would be counterproductive. That money is earned by the employees and should be theirs to keep, save, invest, or spend as they see fit. Such a transition would make it easier for us to continue to meet current and future Social Security obligations. There would probably have to be some tax increases for those who decide to stay in the programs, but that's the dirty little secret in Washington. Everyone knows that would have to happen anyway, but no one want to admit it to their constituents. By providing the pressure escape valve of opting out, it makes it possible for individuals to escape the misery of being dominated by those programs. It also makes it possible to honestly address what it will really take to make those programs financially solvent for those who want to stay in it.

Along with this, Paul would push for the elimination of the IRS and the Income Tax. As he has pointed out so many times, we really don't need to replace the income tax. Most of the tax doesn't go to government services anyway. It merely goes toward interest on the national debt, which is grown by all the Federal Reserve interventions to stimulate the economy, which in turn helps the government do irresponsible things like borrow money to finance illegal and unjustified invasions of countries like Iraq. By putting on the brakes on Federal Reserve interventions and replacing paper money with hard money, we would reduce the level of devastation that paper money continues to cause while increasing the level of hard money in the economy.

It's true that not everyone would be made happy by the transitions envisioned by President Paul. The very wealthy who have invested heavily in dollar-based debt, particularly sheiks in the Middle East, Asian bankers in China, Japan, and Singapore, etc. would not like seeing what has happened to their investments. However, we must recognize that they're not going to like it anyway. No matter how all this plays out, the investors have already seen their investments erode substantially. Even OPEC was bemoaning the rapid decline of the dollar at their recent meetings. I think we can safely guess that they'll take their own steps to save what little is left of their investments. This will be true even if there was no transition to hard money. We need not worry about their pain. They'll have no problems feeding their families.

Critics of hard money will complain that this approach will ultimately mean that the paper dollar will disappear in value. This is happening anyway. It's really a trend that can't be stopped. The only question is...shall we allow ourselves to be dragged down into bankruptcy, as will happen if we follow their prescriptions? President Paul says "no," and he thereby saves the country from the devastation paper money advocates wish on us.

By the way, every other presidential candidate (beside Paul) on the ballot in both major parties this year is a paper money advocate. They might claim otherwise, but every one of them would happily guide us toward ever growing national poverty in the name of illusionary wealth by printing more paper money, so they can continue to justify ever-increasing government spending and intervention. They all favor retaining the Federal Reserve System as our sole, monopoly controller of the money supply, and the Fed can't do anything else beside to continue to print paper money. If they try to restrict the paper money supply by raising interest rates, by their own admission they'll drive this country deep into recession or worse.

Health Care under President Paul

One of the first things Paul would do for health care is to make medical savings accounts available to all persons. He hasn't detailed his plans for health care much beyond this, so I have to speculate a little bit.

I'm pretty confident that one of the first things Paul will do is call for legislation that takes health decisions out of the hands of HMOs and insurance companies and puts it back into the hands of patients and their doctors. While he's trying to get the income tax repealed, I expect he'd demand that Congress include a 100% deduction for individuals on all their health care costs from their income tax returns. I'm also very confident that he would push to reduce the ability of the FDA to exert so much control over food supplements and drug testing. FDA regulations have made it cost-prohibitive for any but the most wealthy pharmaceuticals to get anything approved for public consumption. This would have to change. An easy way for President Paul to relieve pricing pressure of prescription drugs would be to permit the import of cheaper generic label drugs from other countries.

The steps that President Paul would take would actually lead to a reduction in health care costs, something that no other presidential candidate even talks about. Instead of reducing the cost of health care, the other candidates talk only about how to give government more power to regulate health care. But more regulation (even single-payer health care) isn't going to bring the cost of health care down. That can only be done by deregulating health care, and President Paul is just the man to do this.

The Net Result of President Paul's Impact On The Economy

It's hard to show in detail all the ways that a Paul presidency would positively impact the economy, because there would be so many of them. The bottom line is this. Our country would turn it's direction toward growth and prosperity for all rather than for a few. People could actually afford to risk going into business for themselves. Savings would stop being eroded because the poor and middle classes would no longer be forced to save in the form of paper currency, which continuously loses value over time. The economy would be re-tooled to grow from the ground up, which wouldn't make Wall Street the major winners, but they'd do just fine anyway.

The price of oil would start coming down and would keep coming down. Under Bush, the price of oil has kept going up in this country far more than it has in other countries. This is because our own domestic mis-management by our government has outstripped the damage to affordable energy resources even more than warmongering abroad has created fear in the world-wide oil market. The two factors together have created alarming results where oil prices are concerned. A Paul presidency would reverse both of those trends, and the result would be falling oil prices.

Our country would thus be placed on the road toward peace, prosperity, and financial security for all Americans, including the very poorest among us, at a much faster rate with President Paul in office. But even if he's not elected, the revolution his campaign has spawned will eventually make it happen anyway. It'll just take longer to reach.

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2008 Walt Thiessen, all rights reserved.
Published: Thursday, January 10, 2008
Last modified: Thursday, January 10, 2008

The views expressed in this article are those of Walt Thiessen only and do not represent the views of Nolan Chart, LLC or its affiliates. Walt Thiessen is solely responsible for the contents of this article and is not an employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.

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