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Ron Paul is doing well. He placed second in the Nevada caucuses last week and did well in the Louisiana caucuses today. And as we head into a recession, I hear more and more people saying that Ron Paul is the only candidate who understands the problems and what needs to be done to solve them. One recent comment came from Glenn Beck as he interviewed David Walker, the Controller General of the U.S.

Now, I really like Ron Paul. He voted for military action in Afghanistan directly against the Taliban. But he voted against going to war in Iraq. So, if elected, I expect him to be strong against terrorism and to be extremely cautious about using our military to interfere in foreign countries. In hindsight, it seems obvious that working with the legitimate government of Afghanistan has gone better for us than invading countries that weren’t involved in 9/11.

The only complaint I have so far is with some old newsletters published under Ron Paul’s name several years ago that are very racist. Paul says he did not write them and disagrees with their content, but has not indicated who did write them. There’s an in-depth article in Reason Magazine investigating the identity of the author that concludes Paul didn’t write the material.

Supporting him, several black people who have known Paul for decades, including the head of the NAACP, have stated that Paul is not a racist and has never been one. That doesn’t stop the media from repeating the lies though.

I believe Paul when he says he did not write the material and has never agreed with it. The thing that bothers me is his hesitation in explaining why those newsletters went out with his name on them and who wrote them. Honestly though, this isn’t a big complaint.

Of course, it’s easy to find problems with politicians. For example, Mitt Romney promised Michigan voters that he’d spend billions of taxpayer dollars on reviving the Michigan economy, which essentially means subsidies for the big American auto manufacturers. Thanks for promising to spend my tax money to buy Michigan votes. Romney is still my second choice though. The other candidates are even worse.

So basically, I think Ron Paul still has a fair chance to win the nomination. Less than 10% of the Republican primary delegates have been allocated at this point. With Fred Thompson dropping out and Mike Huckabee running out of money, the Republican race may soon be down to three choices.

This is a two-part 30 minute TV special created by the Ron Paul campaign that ran in Iowa on Dec 22nd and 23rd. They are a great summary of Paul’s positions.

Wikipedia has a great summary of the political positions of Ron Paul. The more I learn, the more I like Ron Paul.

His next non-official fund raising day is December 16th, anniversary of the Boston Tea Party. Paul is on track to raise more money during the 4th quarter than any other candidate. He’s already raised more money than Romney and Giuliani did during the 3rd quarter.

That last sentence makes it sound like I oppose both Romney and Giuliani. That isn’t true. Romney is my second choice. I do oppose Giuliani. As far as the presidency goes, there’d be nothing scarier for me than Hillary vs Giulani. You don’t have to look further than the people he governed as mayor of New York to get the idea many of them don’t like him very much.

Here are some more very good YouTube videos about Ron Paul. The first is an interview where Paul describes his foreign policy. The second is a clip of him on the Tonight show with Jay Leno, where he got a standing ovation.

It’s interesting and encouraging to me that a Republican presidential candidate is getting support and interest from Jay Leno and Bill Maher by running on traditional Republican values. I should clarify that by “traditional,” I mean historical. It shows that Paul’s message of freedom and limited government has incredibly broad appeal.

Again, the more I learn, the more I like Ron Paul.

Having watched over 3 hours of video clips and read quite a bit about him and his positions, I thought I’d add a bit more information to my earlier post about Ron Paul.

1. Despite placing low in the polls currently, he raised as much money as John McCain in the 3rd quarter this year (ending Sep 30th) and about half that of Romney and Giuliani.

2. In one interview, he mentioned he’d like to dissolve the IRS and eliminate personal income tax, though his website only talks about lower taxes. Apparently, if the government can reduce its spending to its year 2000 level, this is entirely possible (only about 40% of federal revenue is from income tax). One YouTube questioner asked him which 3 programs he’d cut to pay for that. He answered, “Programs? Let’s start with departments” and then listed several he’d eliminate entirely.

3. He thinks the Federal Reserve Bank is un-Constitutional and would dissolve it. The U.S. has had 3 central banks in its history. The second one was eliminated by Andrew Jackson for the same reason. Our current Fed was created in 1913 with tremendous support by bankers and is generally credited with causing the Great Depression.

4. He opposes Roe v Wade. He’s delivered 4,000 babies as an OB/GYN and believes that the unborn are individuals with protected rights, just like adults. He brought up the distinction between aborting 1 minute before birth to tossing a baby in a garbage can 1 minute after birth. His solution? Let the states decide, which is what we do with all other violent crimes like homicide, murder, and rape. He says that the most complicated decisions ought to be handled locally. And the best thing is that he is clearly advocating a solution that is NOT his personal belief — everyone else seems to want to force their idea of “right” on everyone else.

5. He handles marriage in the same way. Why is government regulating it anyway? Marriage licenses didn’t even exist until 1921. Just get the government out of the business of regulating marriage and let the states handle it (through contract law). He also supported a federal law that clarified that the Full Faith and Credit clause of the Constitution does not apply to “moral” issues like marriage, which would allow one state to reject another state’s marriage. Perfect solution.

6. He’s an anti-war, pro-2nd Amendment (right to bear arms) guy. Again, a very Constitutional position and following the direct advice and comments of most of the Founders of our nation.

7. On foreign policy, he believes that much of the hatred for America around the world is because we keep interfering in other countries internal affairs: from the CIA-orchestrated overthrow of a democratically elected government in Saudi Arabia in 1953 to putting Saddam Hussein into power in the 1980’s. If we stopped interfering overseas, much of the hatred toward us would go away. Who made us the world policeman anyway? He even asked how we’d we feel if China built a military base in Texas.

8. In one of the debates, all the candidates were asked about preemptively attacking Iran without approval from Congress. All of them said they would do what was necessary. Ron Paul answered, “Open the Constitution and read it. The President cannot go to war without a declaration of war by Congress.” We are in Iraq illegally according to our own Constitution. Interestingly, the U.S. has not declared war since WWII.

   Many of our Founding Fathers — including Washington, Madison, Jefferson, Hamilton, and others — wrote letters indicating this was intentional. Lincoln added:

   Allow the president to invade a neighboring nation, whenever he shall deem it necessary to repel an invasion, and you allow him to do so whenever he may choose to say he deems it necessary for such a purpose - and you allow him to make war at pleasure.

9. He is the only anti-war Republican candidate, which does help him against Hillary Clinton for example, who voted for the war, since public opinion is very anti-war right now.

The guy just has a persistent message about less expensive, less intrusive, less aggressive, less bureaucratic government that I find appealing. He believes that the federal government shouldn’t be involved unless granted that power by the Constitution. His 10 year voting record as a Representative from Texas is consistent on these issues too.

I recently watched a documentary on the credit card industry that is terrifying. Words like “predatory” and “inhumane” just don’t seem to be enough. Imagine for a moment all of the injustice and hatred that Martin Luther King struggled against, that generations of Africans endured in this (and other) countries as slaves. That form of personal slavery is being replaced by economic slavery in the form of debt.

At about the one hour mark, they talk a bit about the national debt. One thing that caught my attention is that the entirety of the Social Security “trust fund” has been borrowed and spent by the federal government. All that’s left is IOUs from a government that can’t even balance its budget. Not a good sign for the future.

In May, I published an article I’d originally given in January as a talk in my church on emergency preparedness. I mentioned that the true national debt, as calculated by generally acceptable accounting principles, was about $50 trillion dollars — much more than the $9 trillion generally reported. In March, David Walker, head of the Government Accountability Office, reported that the national debt is on target to increase from $9 trillion to $59 trillion by 2027. That’s $440,000 per family. At 6% interest, you’d have to pay over $26,000 a year in taxes for the government to cover the interest payments. That’s in addition to taxes for anything useful, like roads or defense.

In my review of The Richest Man in Babylon, I mentioned a paragraph I re-read several times because it stretched my brain:

Wealth grows wherever men exert energy. If a rich man builds him a new palace, is the gold he pays out gone? No, the brickmaker has part of it and the laborer has part of it, and the artist has part of it. And everyone who labors on the house has part of it. Yet when the palace is completed is it not worth all it cost? And is ground upon which it stands not worth more because it is there? Wealth grows in magic ways. No man can prophesy the limit of it.

Wealth grows through human effort. It also appears to grow through debt. One of the reasons our economy has grown so much is because of the heavy use of debt. However, if the rich man in the story had borrowed the money to build his house the interest payments would have made the cost of house exceed what it was worth. How much more? About 2.5 times as much. A credit card would make it closer to 6 times as much.

If left unpaid for very long, debt becomes unhealthy. It enslaves the borrower to the lender in a very real way. Exponential growth, including amortization, is not intuitive to the human mind. We constantly underestimate how much it will cost us to borrow money. Debt is dangerous.

I have been reading quite a bit about Ron Paul over the last few weeks. At first, he seemed a bit like a fad honestly. I’d pretty much decided to vote for Mitt Romney because of his ability to improve many of government programs as governor without increasing taxes. I like his ability to bring both parties together.

However, I believe I’m being pulled in another direction now. Ron Paul has quite a big following on the Internet and I’ve read quite a bit about him. He’s more of a Libertarian, someone in favor of smaller, less-expensive government; someone who values personal and economic freedom. The Nobel Prize winning economist Milton Friedman argued many of the same policies and values, and I’ve come to admire both men. Ron Paul, a 10 year congressman from Texas who’s been married to the same woman for 50 years, could bring back many of the great and inspirational things about America that have been lost over the years through larger, more invasive, and more aggressive government.

This 9 minute YouTube video is a pretty good introduction on him and what he stands for. Just be prepared for sappy background music. :-)

He’s the first presidential candidate I’ve ever considered donating money to. However, I don’t think I’m crazy enough to put a bumper sticker on my car yet. Visit his website, which is pretty well done, for more information.

UPDATE: I’ve written more of my thoughts about Ron Paul.

After reading an article published by the Mises Institute claiming that President Bush has not cut taxes, I got to thinking about things. I’m convinced that Mises has got it right. The best, and only correct, measure of whether taxes have gone up is government spending.

Spending = Taxes

This makes a lot of sense for two simple reasons. First, if the government spends money, that money has to come from taxpayers eventually — if later, then it actually costs us more because of interest.

Second, if the government sells an asset it owns, like large sections of Nevada, then taxpayers are still paying for it because now we, as citizens, don’t own that asset anymore. This represents a decrease in our wealth — another way we pay.

So if government spending is the best indicator of taxes, both current and future, what should we do about it?

A Balanced Budget Isn’t Enough

The solution that has been proposed numerous times is to “balance” the budget by offsetting any increase in spending with a corresponding increase in taxes. Balancing the budget would probably work to some degree, but I believe it would fail to accomplish much because it deals with each spending item individually. A much better approach would be to deal with the issue as a whole.

Taxes Should Follow Spending

I think that adjusting taxes automatically to match spending would be much better. If some Senator wants to spend $223 million to build a bridge in his home state, fine. Next year, every taxpayer would have to contribute 74¢ for each person in their family for that bridge. Knowing that just might make him (or her) reconsider how happy his constituents might be about that bridge.

This would allow Congress to spend when they wanted to spend, but would deny them the ability to pretend that it doesn’t cost taxpayers anything. And since most taxpayers are voters, I think a lot of their pet projects, so-called “earmarks,” would get eliminated quickly.

Long-standing nation debt would have to be handled differently because it’s too large to payoff quickly. Perhaps setting a goal to eliminate it in 30 years would work. That’d be the same as putting 10% of our national spending (about $300 billion) into debt reduction.

Each year, the Department of the Treasury, Congressional Budget Office, and Government Accountability Office could get together an adjust taxes automatically based on actual spending for the prior year. All new debts would be scheduled to be paid off within 4 years.

Another problem needing a solution is what to do about promises to spend in the future. Social Security and Medicare come to mind. Currently, the government just ignores these promises when campaigning and making financial projections. The U.S. Treasury’s report for 2006 includes these commitments and should become the basis for starting to accumulate a nest egg to pay for them. Perhaps another 10% could be put towards the retirement of our citizens.

Basic Money Principles

So, as a nation can we put 10% toward debt reduction and 10% towards retirement while starting to live within our means? Does this advice sound familiar? It should. The best thing is that eliminating earmarks (congressional pet projects) would almost pay for both of these. Instead of a balanced budget amendment, maybe we should just try some basic principles of sound money management.

It has bothered me for years that no one expects Palestine to act with any decency while, at the same time, holding Israel to almost heroic standards of restraint and forgiveness. The amazing thing is that Israel actually achieves those standards nearly all of the time, despite intense international disdain for the fact that Palestine has been deliberately targeting Israeli civilians. Only terrorists deliberately target civilians.

The same sort of situation exists in Iraq, which is fighting a war (with America as one of its few allies) against outside forces determined to kill anyone who ever voted for democracy or doesn’t want to “convert” to Islam.

Orson Scott Card has written a great article asking whether Americans still value honor. It’s clear that many of us do, including everyone who volunteers to serve in our military. But I find it hard to believe that any in Congress could pretend that known and unrepentant terrorists should have any respect. From Card’s article:

Remember the name “Nancy Pelosi.” It will stand someday beside the name “Neville Chamberlain” in the pantheon of deluded fools whose poll-following stupidity led to the deaths of hundreds of thousands of their own nation’s citizens, and the deaths of millions of others who would have lived if those deluded fools had done what was necessary to preserve their national honor.

It makes me angry to know that so many of our so-called “leaders” will lie, causing untold American deaths, for their own political advantage. There are scoundrels in both parties, but I hope we can find someone with integrity to put into the oval office.

Yahoo Finance has an article describing how our tax dollars are spent. One interesting thing is that around 70% of the budget is required spending — Congress and the President don’t have any choice about it. This includes Social Security, Medicare and Medicaid payments and other help for individuals. It also includes interest payments on the national debt which, at 10%, seems like a huge liability.

The full breakdown is: * Social Security: 21% * Miliarty: 20% * Aid to the needy: 16% * Medicare: 15% * Interest on the national debt: 10% * Health & Education: 4% * Civilian & Military Retirements: 4% * Veteran’s Benefits: 3% * Transportation: 3% * Other: 6%

I guess that spending 102% of our tax dollars is how Congress got us such a large national debt in the first place.