I wanted to do a post on Ron Paul and the newsletters, but after doing further research, it is going to take several. Let me start off with a post on Ron Paul in general. Aside from the newsletters, should I vote for him?
The case for him: he opposes any further wars or extensions of executive power, secret drone wars, indefinite detention, military commissions, and all the other violations of civil rights and human rights accompanying the War on Terror and War on Drugs. The case against him: his flaky economic theories. Ron Paul has proposed an immediate $1 trillion spending cut in one year, and the adoption of a gold standard, although he admits the gold standard will have to be phased in more gradually. Ron Paul's more reasonable supporters may see these as a mistake, but not a very serious one, or no worse than anyone else's, or politically unfeasible, or not as important as foreign policy, national security, and civil liberties.
Addressing these one by one, first, yes, what Paul is proposing economically is a very serious mistake that could be devastating. In the middle of a deep economic slump, he is proposing to cut our $3.5 trillion budget by $1 trillion. That is about 28% of the budget, or more than total discretionary non-defense spending. It is between 6% and 7% of our total economy (depending on whether you estimate our total economy at $14 trillion or $15 trillion). By contrast the downturn to the present has been closer to 4%. Paul is, in effect, proposing to shrink our economy by another 6-7%. A gold standard would be a severe constraint on the money supply, putting an even further squeeze on the economy. These proposals are a recipe for economic disaster.
Are these worse than other Republicans' economic proposals? Other Republicans' proposals go in the same direction but not as far. It must also be added that, while it is hard to tell if other Republicans' proposals are sincere or sabotage, there is no such doubt in case of Ron Paul. Paul has put his money where his mouth is. His investments consist of 14% cash, 21% land -- and 64% gold and silver mining companies. A professional investment manager described Paul's portfolio as "a half-step away from a cellar-full of canned goods and nine-millimeter rounds.” Another commentator suggests this bet on disaster means that either Paul does not expect to be elected, or thinks he will be unable to rescue the economy even if he is. I am not so sure. Maybe he hopes, if elected, to institute a gold standard and see his gold and silver investments go through the roof.
Are Paul's plans politically feasible? My guess is no. Paul proposes to cut the budget by $1 trillion, but he is as coy as anyone else on what he intends to cut. My guess is any cuts he makes will be considerably less. But I would also guess that any Republican who comes to power (and quite possibly any Democrat as well) will genuinely try for big cuts. My reason for this belief is the urge to cut is by no means limited to the United States. European countries are cutting away with great abandon. And while I doubt that Paul would get very far on imposing a gold standard, he might begin by appointing extreme hard money types to the Federal Reserve who will begin a squeeze that, though not as bad as a gold standard, would be bad enough.
Of course, one might argue that Ron Paul will come to his senses on the economy if elected. But if he comes to his senses on the economy, why not on the War on Terror, just like Obama did? One might say that is different, Obama's promises to reverse Bush's policies were merely lies told to fire up the base, while Paul is sincere. But then again, one of the big "defenses" of Ron Paul's newsletters was that he didn't mean it, he was just lying to fire up the base. So if we couldn't believe him then, why believe him now? (More on that in a later post). Or one might argue that Obama, as a Democrat, was thwarted by Republicans demogoguing the issue, while Paul, as a Republican, will face no such constraints. But I am not so sure. Republicans by now have associated their brand so strongly with national security maximalism that it will be hard to back down just because one of their own is in office. And even if they do, chances are good that the Democrats will seize the chance to burnish their national security credentials by painting Ron Paul as soft on terror if he suggests Arabs have human rights.
The case for him: he opposes any further wars or extensions of executive power, secret drone wars, indefinite detention, military commissions, and all the other violations of civil rights and human rights accompanying the War on Terror and War on Drugs. The case against him: his flaky economic theories. Ron Paul has proposed an immediate $1 trillion spending cut in one year, and the adoption of a gold standard, although he admits the gold standard will have to be phased in more gradually. Ron Paul's more reasonable supporters may see these as a mistake, but not a very serious one, or no worse than anyone else's, or politically unfeasible, or not as important as foreign policy, national security, and civil liberties.
Addressing these one by one, first, yes, what Paul is proposing economically is a very serious mistake that could be devastating. In the middle of a deep economic slump, he is proposing to cut our $3.5 trillion budget by $1 trillion. That is about 28% of the budget, or more than total discretionary non-defense spending. It is between 6% and 7% of our total economy (depending on whether you estimate our total economy at $14 trillion or $15 trillion). By contrast the downturn to the present has been closer to 4%. Paul is, in effect, proposing to shrink our economy by another 6-7%. A gold standard would be a severe constraint on the money supply, putting an even further squeeze on the economy. These proposals are a recipe for economic disaster.
Are these worse than other Republicans' economic proposals? Other Republicans' proposals go in the same direction but not as far. It must also be added that, while it is hard to tell if other Republicans' proposals are sincere or sabotage, there is no such doubt in case of Ron Paul. Paul has put his money where his mouth is. His investments consist of 14% cash, 21% land -- and 64% gold and silver mining companies. A professional investment manager described Paul's portfolio as "a half-step away from a cellar-full of canned goods and nine-millimeter rounds.” Another commentator suggests this bet on disaster means that either Paul does not expect to be elected, or thinks he will be unable to rescue the economy even if he is. I am not so sure. Maybe he hopes, if elected, to institute a gold standard and see his gold and silver investments go through the roof.
Are Paul's plans politically feasible? My guess is no. Paul proposes to cut the budget by $1 trillion, but he is as coy as anyone else on what he intends to cut. My guess is any cuts he makes will be considerably less. But I would also guess that any Republican who comes to power (and quite possibly any Democrat as well) will genuinely try for big cuts. My reason for this belief is the urge to cut is by no means limited to the United States. European countries are cutting away with great abandon. And while I doubt that Paul would get very far on imposing a gold standard, he might begin by appointing extreme hard money types to the Federal Reserve who will begin a squeeze that, though not as bad as a gold standard, would be bad enough.
Of course, one might argue that Ron Paul will come to his senses on the economy if elected. But if he comes to his senses on the economy, why not on the War on Terror, just like Obama did? One might say that is different, Obama's promises to reverse Bush's policies were merely lies told to fire up the base, while Paul is sincere. But then again, one of the big "defenses" of Ron Paul's newsletters was that he didn't mean it, he was just lying to fire up the base. So if we couldn't believe him then, why believe him now? (More on that in a later post). Or one might argue that Obama, as a Democrat, was thwarted by Republicans demogoguing the issue, while Paul, as a Republican, will face no such constraints. But I am not so sure. Republicans by now have associated their brand so strongly with national security maximalism that it will be hard to back down just because one of their own is in office. And even if they do, chances are good that the Democrats will seize the chance to burnish their national security credentials by painting Ron Paul as soft on terror if he suggests Arabs have human rights.
So ultimately, assuming you take Paul at his word on both economic and national security issues is whether you are willing to let him trash the economy in exchange for undoing the worst abuses of the War on Terror. Maybe I should. But somehow I just can't find the stomach for it. And this is without (mostly) considering the newsletters. Those will be addressed in my next posts.
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