Broke-Ass Student

A Sad Legacy for the American Taxpayer

Bush Aides Project Record $482 Billion 2009 Deficit

Being the incredible insomniac I tend to be, I was snuggled in bed last night flipping through various channels when I came across a late night re-run of Glenn Beck interviewing Congressman Dr. Ron Paul on CNN. I found the conversation rather intriguing since they focused quite a bit on monetary policy, as well as the general lack of initiative that sadly seems to be prevailing in Washington these days when it comes to tackling disturbing financial issues.

Dr. Ron Paul gave a compelling speech to the House floor in Congress on July 9, where he hinted at fast-approaching big events that were about to be unleashed; chaotic events, he believed, which would not only affect the United States, but the world economy and entire political system as well.

Glenn Beck asked for more clarification on what was meant during this particular speech, to which Dr. Paul replied;

Paul: “…this is associated with the loss of a standard of living. The standard of living of Americans are going down, especially for the middle-income, low-income, and poor people. It`s going down much more rapidly than those in the high-income bracket.

You know, there is a transfer of wealth with the monetary system we have, and they are suffering. And that is why they`re really hurting. But they usually see this generalize when they go to the gas pump and they say, “Oh, oil prices are too high. We have to do something,” without analyzing it and figuring out why is it that our dollar isn`t buying much. Instead of saying prices are too high, people should always ask the question, why is our dollar not buying what it used to buy?

The dollar has held up relatively well in the last 35 years. Since 1971, there`s been no backing of the dollar [by gold], and we`ve been able to get away with inflating the dollar and exporting it by literally spending it overseas. And that`s one of the reason our jobs go overseas, because it`s cheaper to print paper and spend it overseas.

But the event that I anticipate is that people will get tired of this, and they`re starting to. That`s why the dollar has been slipping. China owns a huge amount of housing securities, and when they start selling those, which they have, our dollar has to go down. When our dollar goes down, prices have to go up. When prices go up, the standard of living goes down.

And prices never go up uniformly. And one thing that you talk about a lot is why — why are we putting this on the backs of the poor? It`s because their income never keeps up with the prices. If all prices went up evenly and salaries went up evenly, it wouldn`t be a big deal, but that`s not the way inflation works.

Some people get richer. Wall Street could get richer. The poor could get poorer. There is an elimination, ultimately, of the middle class with runaway inflation, and the rich could benefit, certainly, in the early stages. When a political crisis comes, then of course, everybody is threatened.

And that`s what I fear is coming, because this dollar bubble has essentially been building for 35 years. It`s world-wide. It`s never happened before. We`ve had fiat money and inflation before, but it`s usually more localized. But this time, because the dollar was the reserve currency of the world, it`s a much, much bigger bubble, and we`re seeing it coming apart.

And that`s why I think we`re on the verge, if not in the very early stages, of a gigantic financial crisis.”

(The statement below in particular made me absolutely cringe and pound my pillow in frustration.)

Paul: “You know, I won`t say the person`s name. One time, this subject came up at a hearing, and I mentioned about the backing of the dollar and the gold, and this individual afterwards came up and said to me, ‘Is the dollar not backed by gold?’ And that person was on the banking committee. So that`s something…”

Ouch. How can someone on the banking committee not realize we’ve been using a fiat currency for the past thirty odd years?? I can only wholeheartedly agree with Glenn Beck when he made these following comments.

Beck: “But they`re not talking about anything. When is the last time you heard any of these politicians really talk about the border? When did they really talk about something that made any sense on the economy? They`ll talk about more giveaways.

They haven`t talked about $482 — what is it — billion deficit now. Four hundred and eighty-two billion dollars is what Bush will leave in this year alone, along with this Congress. Nobody will talk about it, except to blame each other for it. I believe there are irresponsible people in Washington, and they`re focused on other things.

But you have a responsibility, if you`re in Congress, or you`re in the White House, you`re in the Senate. I don`t care where you are. If you are serving the American people, you have a responsibility to figure out how the dollar works. You have a responsibility. And how hard is it?

We all learned in Germany, you print more money and all of a sudden, you`re buying bread with a wheelbarrow. I mean, look at what`s his name, Mugabe, and his economy right now. It only — you don`t need to go to college. I didn`t. I get it.”

Yes!!! I silently cheered from my bed perch. Finally, someone says it, and it was so refreshing to hear the mainstream media focusing a bit of attention on real issues behind our monetary policy and how it affects the economy and American purchasing power in general. The former U.S. Comptroller (that’s guy who balances the government’s budget sheet) has been loudly warning us for years that our economy is unsustainable with current irresponsible fiscal policies. But when will the government stop this reckless devil-may-care spending where the brunt of burden will fall squarely on the taxpayers?

I still feel enormously frustrated but wanted to share this particular interview - it’s the first time I’ve witnessed some of these looming financial issues being discussed so candidly by a mainstream television reporter. So thank you, Glenn Beck, for embracing this financial pickle and actually opening a discussion.

You can view the entire transcript here;

CNN Transcript - Glenn Beck Interviews Ron Paul (July 30, 2008)

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