LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
S&P States the Obvious

By: Dr. Ron Paul, U.S. Congressman


-- Posted Monday, 15 August 2011 | | Disqus

Politicians did not get much time to pat themselves on the back for supposedly rescuing the economy with the debt limit deal last week.  The ink was barely dry when Standard & Poor's downgraded the US debt ratings anyway, roiling world financial markets.  Anyone who has taken an honest look at the government's fiscal situation, taken into account how Washington works and the direction it is going would have a very difficult time arguing with S&P's decision, although a strong case can be made that this was too incremental a downgrade and that it took far too long for S&P to admit the obvious.  

Nonetheless, the administration nitpicked over a $2 trillion "mistake".  S&P rejoined with the fact that $2 trillion here or there hardly makes a difference in the time frame under discussion.  That, if nothing else, should tell you the magnitude of the problem.  $2 trillion has become a drop in the bucket.

S&P cited Congress's inability to act like grownups and make necessary, meaningful cuts, which is true.  I must take issue however, with their suggestion that tax increases are part of the answer.  Taking capital out of the private sector, where it can create real value in the form of new jobs and products, and instead giving it to Washington to waste and squander is not the solution.  Tax increases may seem penny-wise to some, but in reality they would be very pound-foolish.  The government currently takes in $2.2 trillion in taxes per year, which is far too much already.  It spends $3.7 trillion, which is ridiculous and criminal.  The problem is runaway government spending, not the American people having too much money.

And yet we can't even have a serious discussion about bringing our troops home and ending our expensive occupations around the world – things the president used to claim to favor!

Even without this downgrade, major investors are waking up to what lies down the road for the United States in fiscal terms.  China is showing more signs of losing its taste for our debt.  Others are following suit.  What we are about to see is the end of the dollar as the reserve currency of the world.  When that happens, we will no longer be in a position to have pretend debates about things we probably should spend a little bit less on - we will be forced to implement serious spending cuts as our sources of credit dry up.  Of course, we can try to postpone the day of reckoning by printing more money but the resulting “inflation tax” will be far worse than a reduction in government benefits.

Hyperinflation devastates the middle class.  After Weimar Germany hyper-inflated their currency in the 1920s, an entire life savings couldn't buy a postage stamp.  The bank wouldn't even send customers a check for all the money they had saved their whole lives.  It wasn't worth the paper it was printed on or the stamp to send it.  This is what is meant when it is said that the middle class gets wiped out.  The pieces for this to happen here are all falling into place, and have been since 1971.  The only way to avoid that sort of chaos now is for Congress to immediately reduce federal spending and take the Constitution seriously again.  The welfare/warfare state will end either way, but winding it down responsibly is a far better way to do it.


-- Posted Monday, 15 August 2011 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus - Visit Congressman Ron Paul's Web Site




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.