Monday, April 27, 2015

Ron Paul: Current Policies Will Cause a Major Economic Downturn that May Even be Worse Than the Great Depression.

The Real War on the Middle Class

By Ron Paul

One of the great ironies of American politics is that most politicians who talk about helping the middle class support policies that, by expanding the welfare-warfare state, are harmful to middle-class Americans.  Eliminating the welfare-warfare state would benefit middle-class Americans by freeing them from exorbitant federal taxes, including the Federal Reserve’s inflation tax.

Politicians serious about helping middle-class Americans should allow individuals to opt out of Social Security and Medicare by not having to pay payroll taxes if they agree to never accept federal retirement or health care benefits.  Individuals are quite capable of meeting their own unique retirement and health care needs if the government stops forcing them into one-size-fits-all plans.

Middle-class families with college-age children would benefit if government got out of the student loan business.  Government involvement in higher education is the main reason tuition is skyrocketing and so many Americans are graduating with huge student loan debts.  College graduates entering the job market would certainly benefit if Congress stopped imposing destructive regulations and taxes on the economy.

Politicians who support an interventionist foreign policy are obviously not concerned with the harm inflicted on the middle-class populations of countries targeted for regime change.  These politicians also disregard the harm US foreign policy inflicts on Americans.  Middle- and working-class Americans, and their families, who join the military certainly suffer when they are maimed or killed fighting in unjust and unconstitutional wars.  Our interventionist foreign policy also contributes to the high tax burden imposed on middle-class Americans.

Middle-class Americans also suffer from intrusions on their liberty and privacy, such as not being able to board an airplane unless they submit to invasive and humiliating searches.  Even children and the physically disabled are not safe from the Transposition Security Administration.  These assaults are justified by the threat of terrorism, a direct result of our interventionist foreign policy that fosters hatred and resentment of Americans.

Some “military Keynesians” claim that middle-class workers benefit from jobs in the military-industrial complex.  Military Keynesians seem to think that the resources spent on militarism would disappear if the Pentagon’s budget were cut.  The truth is, if we reduced spending on militarism, those currently employed by the military-industrial complex would be able to find new jobs producing goods desired by consumers.  Even those currently employed as lobbyists for the military-industrial complex may be able to find useful work.

Few things would benefit the middle class more than ending the Federal Reserve.  The Federal Reserve’s inflationary policies erode middle-class families’ standards of living while benefiting the financial and political elites.  Middle-class Americans may gain some temporary benefits from Federal Reserve created booms, but they also suffer from the inevitable busts.

As I write this, the dollar still reigns as the world’s reserve currency.  However, there are signs that other economies are moving away from using the dollar as the reserve currency, and this trend will accelerate as the Federal Reserve continues to pump more fiat currency into the economy and as resentment toward our foreign policy grows.  Eventually, international investors will lose confidence in the US economy, the dollar will lose its reserve currency status, and the dollar bubble will burst.

These events will cause a major economic downturn that may even be worse than the Great Depression.  The main victims of this crisis will be average Americans. The only way to avoid this calamity is for the American people to force Congress to free them from the burdens of the warfare state, the welfare state, taxation, and fiat currency.

The above originally appeared at The Ron Paul Institute for Peace and Prosperity.


  1. "Even those currently employed as lobbyists for the military-industrial complex may be able to find useful work." Gotta love his sense of humor.

  2. Sadly, and empirically, I observe too many acquaintances that do not have the will power to save a nickel for a rainy day, or retirement. I might suggest, since it is constitutionally legal (but distasteful, and anti-libertarian), for a State to enact retirement guidelines, perhaps some states could experiment with no Social Security, and others with private Social Security, and others with a combined old age IRA and Health Savings Account.

    My rough calculations reveal that the average american about to retire, would have close to 1.3 million dollars in his/her investment account (working from age 25-65 years, based on average wages, assuming money placed in SP500 etf).

    If they placed health expenses into an HSA, instead of health insurance giants, and backed this policy with single illness catastrophic insurance ( heart attack, cancer), they would retire with an astounding 5 million dollars in their cookie jar. This certainly beats the lousy returns Social Security, and Medicare yield.

    The point is, that those that love this unconstitutional failure called Social Security, can move, or remain in failed states that continue to treat their citizens like milk producing cows.