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Brent Budowsky

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Republicans Are Driving America to an Economic Crash

Posted: 09/25/11 10:28 PM ET

When Republican House Speaker John Boehner (Ohio) and Majority Leader Eric Cantor (Va.) threaten the Fed if it tries to help the economy with monetary policy, their low-concept imitation of Ron Paul is economically ignorant and historically unprecedented. When Republican candidate Rick Perry threatens the Fed with charges of treason and comes close to threatening violence if the Fed chairman visits Texas, his polyester impersonation of Paul makes him intellectually and morally unfit for the presidency.

When the books are written, one story of the 2012 campaign will be the full magnitude of influence that Ron Paul has achieved over Republican economic policy. For better or worse, it is an enormous achievement for Paul that his lifetime body of work is now a consensus policy of the Republican Party.

The larger story, when the books are written, will be how Republican leaders in Congress appear hell-bent on returning the nation to the economic crash that began under the last Republican president, as so many recessions and depressions have begun under Republican leadership.

Here is how Speaker Boehner, Majority Leader Cantor and Senate Republican Leader Mitch McConnell (Ky.) are imitating 30 years of Ron Paul policies and destroying the American economy:

Never before in American history have leaders of any party attacked the Federal Reserve Board for trying to use monetary policy to strengthen the economy during a recession or depression. It has never happened before, not once in American history.

Never before in American history have leaders of any party done what Republican leaders and Republican candidates are doing today: attacking any effort to help the economy through monetary policy, and attacking any effort to help the economy through fiscal policy, at the same time, during a recession or depression. It has never happened before. Not once. Not ever. Even the most conservative Republican leaders in American history have never done anything like this.

Ron Paul was right to call for Fed disclosure. Ron Paul was right to call for Congress to begin serious oversight of Fed action. But Ron Paul is wrong, dead wrong, fatally wrong, disastrously wrong and catastrophically wrong to attack the concept of using monetary policy, properly applied, and to use fiscal policy, properly applied, to increase growth and create jobs during a recession or depression.

Ron Paul has won the debate within the Republican Party and is now dominating the debate in Republican circles. But when the Speaker and majority leader of the House translate Paul's policies into congressional threats against the Fed, they are ignorant of economic policy, ignorant of economic history and driving the nation to an economic crash.

It was Republican President George W. Bush who led the nation to the last crash. It is Republican leaders today who are driving the nation to the next crash. It will be Republicans in the House running for reelection in 2012 who will pay the heavy price politically, because the more Ron Paul wins the economic debate within his party, the more Americans lose their jobs throughout our country.

 
 
 
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HUFFPOST SUPER USER
Just logic
04:00 PM on 09/28/2011
No time in history. He is right considering its only been around since 1913. Which to me means that it is long over do. Look at the 1907 and 1920 depression. Nothing was done by our gov no intervention and the depressions lasted less than a yr for both. Then look at the Great Depression which most researchers agree that the Fed's artifical inflation caused a bubble that burst and contributed to the reason for the Depression. Now look at the mess we are in now. Constant intervention by the fed. And Mr Author why do you say he is right to call for disclosure. They have done nothing wrong Right?
12:21 AM on 09/27/2011
Here is short 4 minute video about what the FED does and explains the real reason the rich get richer and the poor get poorer. It's not the free market. It's the FED which you think is so great.

http://www.youtube.com/watch?v=hx16a72j__8

You are not wrong, you are "wrong, dead wrong, fatally wrong, disastrously wrong and catastrophically wrong".
09:51 PM on 09/26/2011
This article is written by Mr. Budowski as a critique of Ron Paul's party-mates Boehner and Cantor. In that sense, it does little to elucidate the true differences between Paul and those two Republicans. After claiming that Boehner and Cantor's positions are flawed, Mr. Budowski suggests that Ron Paul is also incorrect in his positions on Monetary and Fiscal policy, "properly applied." Not once, and nowhere, in this article does Mr. Budowski offer a glimpse into his own definition of "properly applied" economic or fiscal policy. If he has such insight, there are many people around the world who are eager to hear about it. Indeed, hardly a governor within the FOMC can agree on what constitutes such "properly applied" monetary policy.

Ron Paul's argument against The Federal Reserve and it's actions is predicated on the idea that it's an unconstitutional entity, for it represents a fundamentally unconstitutional abdication of the Federal Government's responsibility toward Monetary Policy to The Federal Reserve, a private corporation, in 1913. Furthermore, Paul's position is that The Federal Reserve is in violation of price-fixing laws, because it sets interest rates, which is the "price of money."

This author has clearly not familiarized himself with Ron Paul's position on the Federal Reserve, or he would know that Paul doesn't merely espouse oversight and transparency. Indeed, Paul sees The Federal Reserve as the primary instigator of "recessions and depressions" in the USA. Ron Paul's reading of economists like Hayek, Mises, and Rothbard has
08:17 PM on 09/26/2011
To "Get" Ron Paul You Have to "Get" Mises, Rothbard, Hayek, and Hoppe

http://beforeitsnews.com/story/1143/700/To_Get_Ron_Paul_You_Have_To_Get_Mises,_Rothbard,_Hayek,_And_Hoppe.html
08:08 PM on 09/26/2011
A central bank may work in some scenarios, but it is obvious that ours has only caused massive inflation, and it is a fine example of how our country is run by the banking elite. I think it was Napoleon who said the one who is handing the money down is the one who is REALLY in power, or something to that effect.
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HUFFPOST BLOGGER
Donna Conroy
07:17 PM on 09/26/2011
Couldn't agree more. this is prescient; history will show you are right. But I can't wait for history and neither can Americans. We need to attack the brutal people in and out of the Republican cabal.
10:01 PM on 09/26/2011
Ms. Conroy, Mr. Budowski will be shown right about what, exactly? He does offer criticism of Republican positions, and especially Ron Paul's, but he doesn't define the "proper application" of Monetary or Fiscal policy. I'm eager to know what the proper application of Monetary and Fiscal policy entails; it's the experience of many Federal Reserve Governors within the FOMC that monetary policy is an inexplicable practice, which some have even referred to as a "dark art." It sounds to me like both you and Mr. Budowski have "properly applied" monetary policy figured out, so please educate me on the issue.

As far as "prescience," I do find it ironic that then-Governor Bernanke said, in 2002, that our economy was in good health. Meanwhile, in 2003, Ron Paul, in the Congressional Record, described the impending mortgage crisis in detail. Who, exactly, was prescient among those two?
10:33 PM on 09/26/2011
I have to respectfully, but adamantly, disagree here. When you mention history showing who was right, all you need to look at is Paul's prescient warnings with eery accuracy back in 2003 of the coming housing collapse because of our disastrous monetary and fiscal policy. As Bruno mentions in his comment, most other economists including Bernanke, had no idea or at least didn't speak of any looming crisis.

Who do you trust? A man, who having applied the concepts of Austrian school of economics, has been able to accurately predict our financial crisis - or - those who either had no idea or were willingly silent??

Furthermore, it is disingenious for the author to lump all the other Republicans with Ron Paul. I have not heard any of them speak, with any intellectual depth, monetary and fiscal policy. There is no evidence that they would not change course.

And as for where we're at now.... how can anyone possibly defend current policies that are driving us to financial ruin, where the poverty rate is approaching its highest level since first being tracked in '59, and unemployment continuing to worsen? Why not elect someone who was actually right about our economic troubles? To me, this just seems to be the only sensible option.
05:40 PM on 09/26/2011
Brent Budowsky, you are wrong, dead wrong, fatally wrong, disastrously wrong and catastrophically wrong if you think that a government monopoly on money has "helped" anyone but Wall St. banks, government politicians, and the politically well-connected in society that have been the direct beneficiaries of government deficit spending or that it hasn't created the economic crisis and unemployment you say you deplore. The last time you were this wrong was The Great Depression.

The Federal Reserve has completely failed in it's dual mandate under any metric or government figures you choose. Dr. George Selgin has done an incredible job (using government data) of showing this.

You are correct about one thing: the rest of the GOP field are just a poor man's Ron Paul. Ron Paul is right. The only candidate who predicted the economic crisis is the only one who can fix it.
04:19 PM on 09/26/2011
"But Ron Paul is wrong, dead wrong, fatally wrong, disastrously wrong and catastrophically wrong"

Only in this now upside-down country that we live in would we turn common sense and reason on its head by declaring an individual is "wrong, dead wrong, fatally wrong, diastrously wrong and catastrophically wrong" when said individual, get this,... PREDICTED IN '03 WHAT ACTUALLY HAPPENED IN '08!

Perhaps, if for no other reason even though there are plenty of them, we should finally elect someone in office who has the intellectual capacity to accurately forecast the effects and consequences of public policy. For the author to arrive at the opposite conclusion, based on no reasoning, empirical evidence, or historical context, is downright embarrassing and shameful.
03:51 PM on 09/26/2011
"Never in history" "Never in history" blah blah blah. Here's some never in history for you:

Never in history, under any president has debt ran up this fast.
Never in history has this many regulations been applied to a fragile economy.
Never in history has the government tried to completely take over health care.
Never in history has the fed printed so much money.
Never in history have we spent so much on war.
Never in history has there been such a massive bailout of banks/car companies.
Never in history has inflation been a catastrophic concern.
Never in history has the gap between poor and rich been so high.

All under democrat leadership and/or democrat majority in congress... Republicans come in and talk about fiscal responsibility and all the sudden they are demonized??? We reached the point of no return... republicans are trying to pull back the reigns and soften the blow. The collapse is coming you regardless of what anyone does. More government is not the solution... how is this not clear by now?
10:30 PM on 09/26/2011
Funny you say that becasue republicans want the rich to be tax free and their policies further the gap. This bad economy was handed to Obama and he might be doing the best job at it, but he's trying to look at for the american people more than Bush or his buddies Dick and Donald have done. Look at the service records of those three and the horrible things they have done for profit and corporate greed. I bet you got all those "nevers" from FOX News which makes many statements which any amount of research will tell you is false. They are republican run by the mega rich. We need true reform not less regulations. Less regulations gives us more E. Coli outbreaks, the story behind the Mudrackers, corporations gutting the economy more. It was ignoring and breaking regulations that got the banks into trouble or does your memory and attention span last less than a year? The government actually did try to take over healthcare at least once before that I know of and in fact Nixon (Republican) set our healthcare system to allow HMOs. His conversation was recorded when he talked about Kaiser starting this practice which makes profit by lowering the level of care which is the exact opposite of how healthcare should be.
10:30 PM on 09/26/2011
I could go on about many other things the republicans have done to slowly ruin our nation, but look at who has been in office during recessions throughout our history and you'll see it's by a vast majority republicans. Since 1945 when GDP records became standard the ration is 3:1. Honestly you sound like a die hard republican fan who swallows everything they say without question which is bad for everyone involved exept the mega rich of course. A person who gets all his information from one source will always be led astray. Even the greatest minds in history got things wrong so of course the non-geniuses in the republican party can't be right all the time, that's if they aren't lying of course.
03:18 PM on 09/26/2011
The congress has the right to coin money. The only legal Monetary policy is a gold standard and money supply which grows with GDP. There are no decisions to be made. Counterfeiting can cause the problems of inflation. Prosperity never comes through creating debt.
02:08 PM on 09/27/2011
"The only legal Monetary policy is a gold standard" is incorrect; the gold standard was augmented by silver and copper in The Coinage Act, and silver is mentioned in the Constitution as a legal tender in State payment-of-debt.
02:10 PM on 09/26/2011
If Brent Budowsky doesn't immediately demand a refund for the money he paid into his education, can he at least let us know which instutition we should avoid sending our children to? The Fed hasn't even been around for a hundred years. It is clear that the Fed has been driving the boom & bust cycles for years regardless of which party is in control - and that lack of oversight is what Paul wants to end.
12:30 PM on 09/26/2011
This author apparentlly does not understand that never in the history of the world has there been a world reserve fiat currency. There is plenty of history showing us what happens to countries and empires that have had a fiat currency. It never ends well.
HUFFPOST SUPER USER
Just logic
04:10 PM on 09/28/2011
Like Russia and its belly flop
10:54 AM on 09/26/2011
Author, maybe you ought to do some light reading before writing about this topic. May I suggest "The Revolution" or End the Fed"? I'd be interested to hear your thoughts afterward.

Partisanship is over. In this day and age, both parties are equally corrupt...

I'm trying to be a cynic, but it's getting harder and harder to keep up.

Paul's books shed a flicker of hope, we have to make this change before the federal government destroys our currency.
10:51 AM on 09/26/2011
The two parties have got to stop playing the blame game... this is not football!!!! Whether we are giving our money to a big crooked government to fund wars or giving our money to them to feed poor people, either way, we are STILL giving our money to people who are stealing from us. If you don't believe me, just look at our bankrupt Social Security Program. They stole it all!!!! Not to mention that everything they are using our money for is un-constitutional. People in America fund wars without consent, abortions, illegal immigration, funding for hostile dictatorships, banks/corporations, etc etc etc... and all without our consent!!!! This is NOT freedom!!!! 1913 gave us the Federal Reserve and the 16th Amendment (illegal taxation), after that they stole all of our gold, made it illegal to own, and replaced it with debt-backed toilet paper. End the Fed, repeal the 16th & 17th Amendments, return to a bi-metal standard, and you will hold them accountable. If you are not on board with the Mises then you are dragging our country further into the pit.
11:47 PM on 10/03/2011
I know its tricky, but the 16th Amendment to the US Constitution, that was approved by more than three fourths of the State Legislatures, in the same way that the Bill of Rights was added to the US Constitution is what actually made the income tax fully constitutional under the US Constitution and fully legal in America. So, if you do not like the US Tax system, please get your elected representatives to change it, but it is a lie to say that the income tax is either illegal or unconstitutional.
04:04 PM on 10/05/2011
They had to get their money back somehow.
10:44 AM on 09/26/2011
How? please explain. By asking that we balance a budget and stop spending money we don't have?

You don't make any sense.
10:51 PM on 10/03/2011
Have you ever bought a house or a car? Did you pay cash for the total amount or did you take out a loan? I know its a little tricky, but just think about that for a while.