Ron Paul

Mr. PAUL

Mr. PAUL. Mr. Speaker, today we are once again voting to take our Nation further down the path toward a system of centralized Federal planning of our energy supply. The very notion of a national energy policy is collectivist; it assumes that an energy supply would not exist without a government plan. Yet basic economics teaches us that nothing could be further from the truth. The best energy policy is the free market! Energy is no different than any other commodity--free market, competition produces the most efficient allocation of resources. In a true free market, conservation of scarce energy resources occurs naturally. When coal, natural gas, or other nonrenewable sources are depleted, the price goes up. When alternative energy sources like wind and solar become economically feasible, demand for such sources arises naturally. There is always a natural market for clean and cheap energy. Only an unregulated free market creates the environment that allows critical technological innovation to flourish, innovation that holds the key to cheaper and cleaner energy. The approach we take today, however, distorts the market and favors certain industries and companies at the expense of American taxpayers. It's always the same old story in Washington: instead of allowing the free market to work, Congress regulates, subsidizes, and taxes an industry, and when inevitable problems arise, the free market is blamed! The solution is always more Federal intervention; no one suggests that too much Federal involvement created the problems in the first place. Let me provide just a few examples of the most egregious, wasteful spending measures and corporate subsidies contained in this legislation: It spends even more than the President requested; it provides $90 million in subsidies for hydroelectric power plants; it provides $500 million for research and development of Biomass; it authorizes almost $2 billion for the Energy Department to do what the private sector would if it was profitable--develop hydrogen cars; it allows FERC to use eminent domain to ride roughshod over State and local governments; it increases failed ethanol subsidies to favored agribusiness companies, while providing liability protection for those companies; it requires States to reduce energy consumption by 25 percent in 2010, including States with growing populations like Texas; it forces taxpayers to guarantee loans for pipeline projects, despite the easy availability of cheap credit; it spends $20 million for the Labor Department to recruit and train Alaskan employees to build a new pipeline; and it authorizes the Energy Department to create efficiency standards for vending machines! Mr. Speaker, this conference report represents the usual pork, subsidies, protectionism, and regulations that already distort our energy markets. I strongly urge my colleagues to vote ``no'' on this terrible bill.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to support S. 1066, the Senate version of my H.R. 154, which I introduced on the first day of the 108th Congress. This legislation fixes a mistake in the official Fish and Wildlife Services' maps by removing a 19-acre area known as Matagorda Dunes, in Matagorda County, Texas, from the John H. Chafee Coastal Barrier Resources Act (COBRA). This change is fully supported by the Fish and Wildlife Service. In fact, a Fish and Wildlife Service created map, dated July 12, 2002, acknowledges the error. This change will ensure property owners who had already begun developing this area are able to obtain insurance. Congress never intended to deny these landowners access to insurance. Matagorda Dunes was included in COBRA as a result of a drafting error when the COBRA maps were revised in the early eighties. Unless this mistake is fixed, the result could be catastrophic for these property owners who invested in developing Matagorda Dunes under the belief that the land was excluded from COBRA. A failure to fix this mistake could also be quite costly to the American taxpayers. Fixing this mistake is also quite important to the people of Matagorda County, which is why a county official traveled to Washington to testify at a hearing on this bill in September. In conclusion, I thank Chairman Pombo and my colleague from Texas, Senator Hutchison, for their work on this issue and I urge my colleagues to support this important bill. Mr. Speaker, I yield back the balance of my time.

Mr. PAUL

Mr. PAUL. Mr. Speaker, while I am pleased to see that this conference report has addressed the issue of concurrent receipt, I note with dismay that the provision as included in the report is inadequate. It will leave hundreds of thousands of veterans out in the cold, many of whom will likely not live long enough to benefit from this unacceptable pseudo-solution. This provision will allow only those 20-year retiree combat-disabled veterans to receive concurrent receipt, which completely ignores that many if not most soldiers who are combat-disabled do not remain in the military for 20 years. Upon becoming disabled they are discharged from the military. This means that, according to some estimates, two-thirds of disabled veterans will be left behind by this provision. In this, the provision is a slap in the face of our veterans. Additionally, the 10 year phase-in of concurrent receipt for the remaining who are at least 50 percent disabled effectively means that thousands of our veterans--particularly those of the World War II and Korea generations--will not live to receive this earned and deserved benefit. Mr. Speaker, we need to make our veterans and our soldiers our top priority. We have entered into a contract with each of them. They have done their part and are doing their part every day--in conflicts across the globe including the increasingly deadly Iraq occupation. We must keep our end of the contract. I am sad to note that provisions like this watered-down concurrent receipt are not in keeping with our end of the contract. I also must object to the procedure in bringing this conference report to the Floor. We were once again given only hours to read a conference report that ran hundreds and hundreds of pages. This is a disturbing pattern that seems to surface when we are required to vote on controversial legislation. Are Members not anymore supposed to at least review legislation before voting?

Mr. PAUL

Mr. PAUL. Mr. Speaker, I voted in favor of this legislation because I do believe it is important to express our gratitude to our armed forces, and particularly to remember those who lost their lives in Somalia in Operation Restore Hope. Indeed, members of our armed forces have been asked to make extraordinary sacrifices in this post Cold War era, as US military presence across the globe has, despite what many of us hoped, increased significantly and military deployments into hostile situations have also increased. Mr. Speaker, while I do want to join those praising members of our armed forces, I must point out that legislation like H. Con. Res. 291 is dishonest and actually disrespectful to our military. It is obvious that praising the soldiers is only one small part of this legislation. Under cover of this praise is an attempt to re-write history and to praise a foreign policy that sends our military into useless and meaningless battle zones, like Somalia, where they are asked to fight and die for a cause completely unrelated to the US national interest. It is shameful for legislators to wrap themselves in the sacrifice of our troops in praise of a policy that does not serve the United States and ends up getting these same troops killed and maimed. The legislation states, falsely, that our failed Somali nation- building fiasco was somehow related to the war against terrorism. This attempt at revisionist history is more than dishonest: it is likely interventions like these actually increased resentment of the US and may have even led to more recruits to terrorist organizations. This legislation expresses gratitude for our troops' ``provid[ing] humanitarian assistance to the people of Somalia in 1993.'' I see nowhere in our Constitution a provision that allows the United States armed forces to be used for the purpose of ``provid[ing] humanitarian assistance'' to any foreign country or people. Our armed forces are to be used in defense of our homeland. Period. So I am deeply disturbed by legislation such as this. Yes, we must honor troops, but we cannot honor a foreign policy that sends them into harm's way for ``nation- building'' or ``humanitarian assistance'' or any other reason not directly related to the defense of the United States. I hope the next time we see legislation congratulating the brave service of our armed forces it is more honest. Our servicemembers deserve at least this, do they not?

Mr. PAUL

Mr. PAUL. Mr. Speaker, like all Americans, I am concerned about the loss of jobs in America's manufacturing sector and the role currency manipulation plays in that loss. For many years, I have warned my colleagues that America's monetary policy is endangering America's economy. The economic difficulties currently facing this country are a classic example of the harm resulting from a boom-and-bust cycle caused by an inflationary monetary policy. An open debate on monetary issues is therefore long overdue. However, instead of debating America's monetary policy, we are debating China's monetary policy. Specifically, the goal of this resolution is to pressure China to change the valuation of its currency. Whatever short-term benefit our manufacturers may gain from this action, the policies urged today are not in the long-term interest of the American people. In arguing for fluctuating rates, the backers of H. Res. 414 are demanding that the Chinese Government adopt an irrational policy. A sound economy requires a sound and dependable unit of economic measurement. Yet, by definition, under fluctuating rates the currency, which serves as the basic unit of economic measurement, will not be sound and dependable. Instead, that value will change depending on the whims of politicians and the perceived economic needs of politically powerful special interests. China, in fact, has done very well with a fixed measurement of value. China's economic growth rate is high; China is also exporting many products into our market while our domestic producers are suffering. Therefore, China makes a good scapegoat for our economic problems. Demanding that the Chinese government adjust its currency is a convenient distraction from addressing the real economic problems facing our country. Instead of having fluctuating currency exchange rates and the inevitable instability that accompanies them, we should be working to establish a gold-backed currency whose value is determined by the market. This would provide an objective measurement of the value of economic goods and services and thus strengthen the economy by freeing it from the negative effects of our unstable monetary policy. I would also urge my colleagues to consider the benefits we receive from our relationship with China. Of course, consumers benefit from lower-priced goods. Adopting the policy urged by supporters of this bill would cause consumer prices to increase, thus reducing consumers wealth. Other producers would suffer as a result of the consumers decreased purchasing power.--While there is not an organized lobby arguing against the-policy recommendations of H. Res. 414, I doubt many of our constituents want us to increase the prices they pay for goods and services. Congress should also consider how the Chinese benefit the United States Government by holding our debt. The dollars the Chinese acquire by selling us goods and services must be returned to the United States. Since the Chinese are not buying an equivalent amount of American goods and services, they are using the dollars to finance our extravagant spending. In fact, Mr. Speaker, our ability to continue to fund the welfare- warfare state without destroying the American economy depends on foreigners buying our debt. Perhaps we should think twice before we start bullying and browbeating our foreign creditors to change their economic or other polices to our liking. H. Res. 414's underlying premise is that sovereign countries have a duty to fashion economic policies that benefit the United States and it is a proper concern of Congress if these countries fail to do so. H. Res. 414 attempts to justify Congressional interference in the internal economic affairs of China by claiming that China is not living up to its obligations as a member of the World Trade Organization (WTO). I would remind my colleagues that the WTO has oftentimes ruled against the United States and Congress is right now changing United States tax laws to please the WTO. Ceding control over United States tax and trade policy to this international organization violates the United States Constitution and is contrary to the interests of American citizens. Therefore, it is not wise to endorse the WTO process by encouraging other countries to submit to WTO control. Instead of promoting global economic government, the United States Congress should reform those policies that reduce our manufacturers' competitiveness. Recently, a financial journalist visited with businessmen who are launching new enterprises in China. When he asked them why they chose to invest in China, they answered: ``It is so much easier to start a business in China than in the United States, especially in places like Massachusetts and California.'' This answer should send a clear message to every lawmaker in America: the taxes and regulations imposed on American businesses are damaging economic growth and killing jobs. If we were serious about creating jobs, we would be working on an aggressive agenda of cutting taxes and repealing needless regulations. Congress can also improve America's competitive position by ending the practice of forcing American workers to subsidize their foreign competitors through organizations such as the Export-Import Bank and the International Monetary Fund. I have introduced the Steel Financing Fairness Act (H.R. 3072) to accomplish this goal. H.R. 3072 prevents taxpayer funds from being sent to countries, such as China, that subsidize their steel industries. Of course, our ultimate goal should be to end all taxpayer subsidies of foreign corporations and governments. In conclusion, Mr. Speaker, I remind my colleagues that stability in currencies is something we should seek, not something we should condemn Instead of urging China to adopt a floating rate, Congress should be working to adopt a stable, commodity-backed currency whose value is determined by the market and encourage other countries to also adopt a market-based currency. This will benefit American workers, entrepreneurs, and consumers. Congress should also strengthen America's economy by reducing taxes and repealing unnecessary and unconstitutional regulations and stop forcing American taxpayers to subsidize their foreign competitors.

Mr. PAUL

Mr. PAUL. Madam Speaker, I rise with great concerns over this legislation--both over its content and what it represents. First, I think it is absurd that the U.S. Congress believes it has the responsibility and authority to rectify the inappropriate statements of individuals in foreign countries. Have we moved beyond meddling in the internal affairs of foreign countries--as bad as that is--to even meddling in the very thoughts and words of foreign leaders and citizens? It is the obligation of the U.S. Congress to correct the ``wrong thoughts'' of others that have nothing to do with the United States? Additionally, is it our place to demand that other sovereign states, such as the members of the European Union, react as we say they must to certain international events? More troubling than what is stated in this legislation, however, is the kind of thinking that this approach represents. The purpose of this legislation is to punish inappropriate thoughts and speech--to free debate on difficult topics and issues. In this, it contains a whiff of totalitarian thinking. This legislation advances the disturbing idea that condemnatory speech that does not explicitly incite violence is nevertheless inherently dangerous. It asserts that even debating controversial topics inevitably leads to violence. This is absurd on its face: it is only debate that leads us to come to understandings over controversial topics without violence. That is why nations engage in diplomacy. Those who feel aggrieved over an issue can either broach the issue through discussion and debate or they can attempt to address the grievance through the barrel of a gun. Which is preferable? I think the answer is self-evident. Once persuasion is taken from the realm of possibility, the only approach left to address grievances is violence. Is the prime minister of Malaysia wrong in his statements? Debate him. Invite him to one of the various multilateral gatherings with someone who disagrees with him and have a debate and discussion over the issue. This approach is much more likely to result in a peaceful resolution of the dispute than what we are doing here: a blanket condemnation and a notice that certain difficult issues are not subject to any inappropriate thoughts or statements. This is chilling for a nation that prides itself on its tradition of protecting even the most distasteful of speech. Dr. Mahathir has long been known for his statements on the Middle East. His views are no secret. Yet even President Bush, who invited Prime Minister Mahathir to Washington in May, 2003, chose the path of debate over blanket condemnation. President Bush said at a joint press conference that, ``we'll also talk about the Middle East, and I look forward to hearing from the Prime Minister on the Middle East. So we'll have a good discussion.'' Abandoning our beliefs and traditions-- especially those regarding the right to hold and express even abhorrent thoughts and ideas--when it comes to our foreign relations is hardly the best way to show the rest of the world the strength of our system and way of life. A careful reading of the prime minister's speech did not find any explicit calls for violence. Actually, Dr. Mahathir called for Muslims around the world to cease using violence to seek their goals. He stated, ``is there no other way than to ask our young people to blow themselves up and kill people and invite the massacre of more of our own people?'' Also, he advises against ``revenge'' attacks and urges Muslims to ``win [the] hearts and minds'' of non-Muslims including ``Jews...who do not approve of what the Israelis are doing.'' While we may agree or disagree with the cause that Dr. Mahathir espouses, the fact that he calls for non-violent means to achieve his goals is to be commended rather than condemned. This is not to agree with every aspect of his address--and certainly not to agree with some of the ridiculous statements contained therein--but rather to caution against the kind of blanket condemnation that this legislation represents. Do we not also agree with his words that Muslim violence in the Middle East has been counterproductive? President Bush himself in May invited Dr. Mahathir to the White House to, in the president's words, ``publicly thank the Prime Minister for his strong support in the war against terror.'' I strongly believe that we need to get out of the business of threatening people over what they think and say and instead trust that our own principles, freedom and liberty, can win out in the marketplace of ideas over bigotry and hate. When the possibility of persuasion is abandoned, the only recourse for the aggrieved is violence. Haven't we seen enough of this already?

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to recognize the LaGrange Noon Lion's Club on the occasion of their 75th anniversary. Since its founding, the LaGrange Noon Lion's Club has been a cornerstone of charitable service to its community. I am therefore pleased to submit this proclamation honoring the LaGrange Noon Lion's Club into the Congressional Record. Congressional Proclamation, La Grange Noon Lion's Club 75th Anniversary Whereas, the LaGrange Noon Lion's Club serves the citizens of LaGrange, Fayette County, the great state of Texas and the United States of America, AND Whereas, the La Grange Noon Lion's Club gives of their time freely for the betterment of mankind, having a membership of anonymous individual philanthropists, AND Whereas, the International Association of Lion's Clubs all over the world offer charitable hope to the blind, provide services for youth, disabled and victims of disaster, of which the Noon Lion's Club is a subsidiary Therefore, on behalf of the United States House of Representatives and the Constituents of District 14 in Texas, I, Representative Ron Paul, do hereby proclaim October 12-18, 2003 the 75th Anniversary Week of the La Grange Noon Lions Club.

Mr. PAUL

Mr. PAUL. Madam Speaker, I want to spend a little bit of time this evening talking about the bill that we spent 3 days debating. That is the $87 billion appropriations bill that we just voted on and passed, not so much that I want to rehash what we did during these 3 days as much as to make a point that we ought to be debating something other than the technicality of how to spend $87 billion of the taxpayers' money. And that has to do with overall policy. I think so rarely we deal with policy and we deal only with technicality and accounting and an attempt made at oversight. So I would like to spend a little bit of time emphasizing a different type of foreign policy that we have become unaccustomed to. Because there was an American foreign policy once well known to us, to our country and especially to our founders, a policy of nonintervention. Today, and essentially for a hundred years, we have been following a policy of foreign intervention, that is, that we assume more than I believe we should overseas. And I object to that because I see it as not gaining a constitutional mandate as well as I see it as being a great danger to us both in the area of national defense, national security, as well as the economic dangers it presents. The debate has ended, it is said, with this vote; but in many ways I think the debate is only really getting started. The debate has been going on a long time dealing with Iraq. It did not even start after 9-11. It is true within weeks after 9-11 the Project for New American Century saw this as an opportunity to bring forth their suggestions that they had made many years ago, and they have been agitating forth for over 10 years, and that is to go into Iraq; and they saw this as an opportunity. But actually, this debate has been going on even a lot longer. Certainly since the first Iraqi war in 1990 and the persistence of our bombing of Iraq, as well as the embargo and boycotts of Iraq served to do a lot of internal damage to the Iraqi people. But the debate, instead of ending, I think is really just starting. Because the vote today, although it was overwhelmingly in support of the $87 billion, I noticed a lot more people in the Congress voted against the appropriations reflecting probably the views of many taxpayers in this country who are very reluctant to spend this kind of money overseas, especially if they perceive what we are doing is not being very productive. And not only do we have to deal with whether or not what we are doing is productive or not, but the final analysis will be, can we afford it? It may be that the lack of affordability may bring us to our senses before the logic of a foreign policy. That might make more sense than what we have been doing. Before the Iraqi war, the 18 months, actually there was a pretty strong debate here in the Congress. Several of us, quite a few of us, got to the floor and talked about the potentiality of war and why we thought it was a bad idea. My conclusion in October of 2002, 6 months or so before the invasion, was that we should not go in to Iraq. And it was a deeply held conviction, not only philosophically, because of a strong belief I have in nonintervention and the restraints that are placed on us by the Constitution, but also because I was convinced that our national security was not threatened by Saddam Hussein and that 9-11 had nothing to do with Iraq and Iraq had nothing to do with 9-11 nor Saddam Hussein. And I think the events since that time have proven that assumption to be correct. There is no evidence that Saddam Hussein was capable of fighting or invading anybody. There was no resistance and he had been shooting at our airplanes for over 12 years and never hit one of them. To assume he was a threat to the world was, I think, overblown. Those are the reasons why I so strongly objected to it. Now, the argument goes that whether or not we supported the war at the beginning, we should support the troops now. The troops are there and if you vote against the appropriations, it means that you lack support for the troops. Well, this is not true; and those who argue that case know it is the case, that it is not true because the funding that is already in the pipeline is certainly enough for several months of leaving and coming home. And so that argument just does not hold water. And besides, if you really talk to the troops, and now we are getting so much more information from the troops, if you ask them whether there is somebody in the Congress that votes to have them come home, whether that indicates a lack of support for them, I think you would get a very clear answer. Probably a very large number, if not all of them, would like to come home tomorrow and they do not see a lot of benefit by the sacrifices that are being made over there. But I think if the support for the war is weak, why are we there? What drives us? And what drives our foreign policy? Basically, we have come to the acceptance, at least especially throughout the 20th century, of accepting the notion that we have some moral obligation to make the world safe for democracy. And we have heard so much about this that we are over there to spread democracy. Well, if you look to the Constitution, there is no grant of authority even to the Congress or to the President that that should be a goal. That does not mean that our values should not be looked upon and spread; but to be done through the military and by force, that is an entirely different story. What we are involved here now with our intervention in Iraq and Afghanistan and other places, we are involved in nation-building. And nobody in this country campaigns, whether it is for the Presidency or for a congressional seat or a Senate seat, nobody goes out and says, Elect me to Congress because I want to get into the business of nation- building. Nobody does that and yet really that is what we are talking about today. We are very much involved in nation-building in Afghanistan, and the successes there are very shaky. We probably occupy one city and not much more. And everybody reads daily about the shakiness of our occupation of Iraq. And we are very much involved in internal affairs of other nations, the kind of thing our founders said do not get involved in. Do not get involved in the internal affairs of other nations. Stay out of entangling alliances. And we are very much involved. The entangling alliance that I had the strongest objection to is the entangling alliance with the United Nations. So although it was seen by the world that we went into Iraq by defying the United Nations, if anybody would like to check and go back and look at the authorization for the use of force which was a transfer, illegal transfer of power to the President to pursue war, the United Nations was cited 16 times. There was a need to enforce the United Nations resolution. That was the justification for the Congress to transfer this power to the President in allowing him to make his own decision. Well, that is technically flaunting the Constitution and that the proper method for us going to war is for the Congress to declare war, and then, of course, go out and win the war. But the authority comes from the people to the Congress and the Congress cannot transfer this power and this decision-making to the President under a majority vote in the legislative body. There have been others, in particular the neo-conservatives who have been very influential in foreign policy the last several years and who have been associated with the Project for a New American Century. They have been explicit in their goals. And one of their explicit goals has been to redraw the lines of the Middle East and to have preemptive regime change. These are serious beliefs that they have; and everybody has a right to their beliefs. Their beliefs that we have this obligation to remove regimes that we do not like and to redraw lines and to spread our way of life and our democracy by the use of force, they sincerely hold those beliefs; and I sincerely disagree with them. But I believe that the Constitution is on my side and not on their side. And when we do what they want and what we have done and have been doing, it is dangerous. It is dangerous to our security. It is dangerous to our financial situation and our economy. And it is a tremendous drain on so many taxpayers here trying to struggle and make a living. There are others who influence our policy, and it is not the conspiracy buffs that had coined the phrase ``the military industrial complex.'' And everybody knows where that phrase came from. But it is alive and well. Believe me, it is alive and well. There is a tremendous amount of influence by those who make profits, refurbishing the weapons they get, rebuilding the bombs, rebuilding the airplanes and lining up at the trough to see how they will get to participate in this $87 billion that has just been recently appropriated. This is one of the reasons why I think the debate just in these last couple of days on whether or not the money would be a loan or a grant really did not have a whole lot of merit. I happen to have supported all the amendments that said it should be a loan, not a grant, but it does not make a bit of difference because the likelihood of a country like Iraq, that does not have a government, being able to make a promise and then pay us back, we generally never get paid back anything. So that to me was a red-herring argument that was sort of one of the tactical or accounting arguments that occupied a tremendous amount of time here by avoiding the bigger issue on whether or not it is a proper role for the United States to be telling the rest of the world how to live and it is our obligation to nation-build and our obligation to redraw the lines of the Middle East. That is the bigger question, and this is the debate I hope to hear that we have on this floor some day. The policy of interventionism, I think it is dangerous as instead of reducing the odds of a terrorist attack, I believe it increases the odds of a terrorist attack. When I see us occupying Saudi Arabia, having an air base on land which is considered holy land, occupying the Persian Gulf that has a lot of oil, and it has been said we are there to protect our oil, that it would be equivalent to the Chinese coming in to the Gulf of Mexico and saying we do not have enough oil. And if they happen to be stronger and that they could come over and say, well, we are more powerful, we need imports, we are going to protect our oil in the Gulf of Mexico, we will have our Navy in the Gulf of Mexico, and if we need to we are going to put air bases in Florida and Texas and wherever. And then if the Chinese come in and say, well, your way of life is not our way of life, and we should teach you a better system, that is what I see as being equivalent to us being in the Persian Gulf occupying the Arab lands, and especially, now, Afghanistan and Iraq. In other words, no matter how well-intended those individuals are who drive our foreign policy and drive these expenditures and drive our military around the world, no matter how well-intended under these circumstances, if what I am saying is correct, there is no way it is going to work, and the sooner we admit it and the sooner we discover it is not going to work, the better it is for all of us and the less killing that is going to occur. So I am strongly suggesting that we here in the House someday get serious about talking about the big picture, the strategic picture, the philosophic picture and the Constitution, deciding what we really should be doing in our foreign policy. Some people say, well, it sounds to me like what you are advocating is isolationism, and nobody wants to be an isolationist. When they throw that term out, it is usually done there to try to discredit those individuals, like myself, who are arguing the case for nonintervention. Isolationism is quite a bit different. Isolationism is those who want to put barriers on trade and travel in exchange of ideas. That is true isolationism. That is mercantilism and protectionism. That is not what I am talking about, and that is not what nonintervention is. Nonintervention in foreign policy means we do not impose our will on other people, something that a lot of very conventional politicians have talked about for years as a matter of fact, especially when they are campaigning. I would like to quote from the memoirs of George Bush, Senior, which he wrote, and they were published approximately 5 years ago, dealing with Iraq and what he thought about it, about the invasion of Iraq and why he did not go into Iraq. This comes from A World Transformed. This is George Bush, Senior. He says, Trying to eliminate Saddam would have incurred incalculable human and political costs. Apprehending him was probably impossible. We would have been forced to occupy Baghdad and, in effect, rule Iraq. There was no viable exit strategy we could see, violating another of our principles. Furthermore, we had been self- consciously trying to set a pattern for handling aggression in the post-Cold War period. Had we gone the invasion route, the United States could conceivably still be an occupying power in a bitterly hostile land. That comes from George Bush, Senior. That is not coming from me, who has always had great concern about our military activity. I think that is sound thinking and sound advice, totally ignored. In the campaign before the last Presidential election, our President said, If we are an arrogant Nation, they will resent us. If we are a humble Nation but strong, they will believe us. If we are a humble Nation, they will respect us as an honorable Nation. I think we have lost a little bit of our humility, to say the least, and, as of now, I do not think that our reputation has been enhanced, especially in the Arab-Muslim world, and that concerns me because it is this lack of civility between countries and the antagonism which leads to conflicts and hatreds and killing and guerrilla wars which we are fighting right now. I express my concern about the way we went to war because it was a transfer of power from the Congress by mere vote, which circumvented the Constitution, rather than a declaration of war, and I base my concern on the fact that we have had a lot more trouble in the last 50 years when we quit declaring war and at least prior to that the wars we declared, they came to an end. Look at Korea. We did not declare war there. We went there under a U.N. resolution. We are still there. We spent over $1 trillion, and we are still in conflict with North Korea, and it is a serious problem, and we do not trade with them. Going into Vietnam, we went once again into Vietnam without a declaration of war. It really came to no resolution other than the fact that we walked away. We had to get out because we were not winning. The determination to win was not there because the Vietnamese were not a threat to our national security. Nobody was going to declare war, but look at the difference. We are still in North Korea. That was under a U.N. resolution, and just look at what has been achieved by leaving Vietnam. They have become Westernized and, to a degree, capitalized. They are more capitalistic. We trade with them, making the point that it is very, very hard to impose our will and our system of values on somebody with the use of arms, but by the willingness of trade and exchanges with people and ideas, they are more likely to come in our direction. So the difference between the 10 terrible years in the 1960s, as we lost 60,000 men and achieved nothing, compared to the next decade or two, how we have become more friends with the Vietnamese, there is a powerful message there if we would listen to it and pay attention to it, but no, since that time we have continued to go into many areas. I think this was a problem going into Iraq in 1990. It was an undeclared war. It was a U.N. war. It did not end it. It continued and it is still continuing into its 15th year, and here we are still arguing over the financing which I think is at very early stages. How long will we be there and how many men are going to die and how is it going to end? I am convinced as long as we follow this principle of foreign interventionism that we take it upon ourselves to spread democracy around the world, we are going to be running into trouble like this. James Madison early on in 1798 gave us some advice about the Presidential power and congressional power to go to war, but he was explaining why it was important to keep it in the hands of the legislative body. He says, The Constitution supposes what the history of all governments demonstrate, that the executive is the branch of power most interested in war and the most prone to it. It has accordingly with studied care vested the question of war in the legislature. That is what our Constitution did, but because now it has drifted from the legislature, we allow our Presidents to do more than they should be able to do, and then we allow them to incorporate this into United Nations' mandates. It means that the people have lost their control. How do the people stay involved in this? In one way, they pay the bills and the young people die. That is what is at stake. Our economy's at stake, our young people are at stake and our freedoms are at stake because we allow the prerogatives that were explicitly given to the Congress to drift away and get into the hands of the executive branch and into the United Nations. We do not declare war. We do not win them. They persist, they last a long time, and this is the reason why we should really and truly talk about how do we get out of this mess, instead of just expanding the mess, how do we get out and restore a policy that makes a lot more sense. The famous General, General Douglas MacArthur, who knew a lot about war, also had advice to us about how to handle the issue of war, and he said, The powers in charge keep us in a perpetual state of fear, keep us in a conscious stampede of patriotic fervor, with a cry of grave national emergency. Always there has been some terrible evil to gobble us up if we did not blindly rally behind it by furnishing the exorbitant sums demanded. Yet, in retrospect, these disasters seem never to have happened, seem never to have been quite real. Here is a man who knew about World War I, World War II and Korea, and he was suggesting that they were overblown. One thing that we did not talk about in the debate of the $87 billion was a $600 million appropriation. It is not written in there explicitly, but there is a $9.3 billion authority to transfer funds over into the Pentagon and more or less having a slush fund to spend just about any way they want without any significant congressional oversight, but the $600 million has been asked for and will be achieved through this appropriation to continue the search for weapons of mass destruction. They have spent $300 million for six months, with 1,200 individuals combing the entire country of Iraq, and nothing has been found. So typically, American style, modern America, that is, double the amount of money, double the number of people and keep searching, because something will be found. My answer is, what if you do find something? What does it prove? Does it prove that he was a threat to our national security? No way. Does it prove that it was a relationship to Iraq and 9/11? No way. So this obsession is for saving face and nothing more. If there was a major nuclear or chemical weapon available that was about to be unleashed against us, it would have surely been found by now, but that was not debated, but I am sure that search will go on, and ``when something is found,'' and I put that in quotes, there will be a lot of questions asked. More questions will be asked than answers given. I guess early this week we also had another vote that emphasizes my concerns, because it again is going in the wrong direction, and that was the vote we had on Syria. A couple of us voted against this. Syria is a hard country to defend, and I am not going to defend Syria. I am defending the Constitution, and I am defending nonintervention, but the Syrian resolution was more or less the first major step in the direction of war against Syria. This is exactly what the project for a new America century wants. Syria is on their list and the sanctions put on Syria are essentially a prelude to war because that country, as part of the axis of evil, we have to get rid of that regime and they are helping the Iraqis so, therefore, war is coming, and I just cannot see how the average American is sitting around worrying about the Syrians, but they said the Syrians, there may be some people going back and forth from Syria and participating in the guerrilla war in Iraq, which may well be true, but then again, what about other borders? There is a border between Pakistan and Afghanistan. Pakistan's on our side, Afghanistan is half and half, but right on that border is Osama bin Laden most likely. And he is probably in Pakistan. So do we decide that we have to go after Pakistan? No, we recognize that the borders are uncontrollable. Here we are putting sanctions on Syria because we do not like the way they are handling their borders, but there are a lot of people in this country who would like to see us do a better job with our own borders. We do not have control of our own borders, yet here we are putting on sanctions and initiating another step towards war against Syria because we are not satisfied with what they are doing. We cannot achieve some of these goals that we have set for ourselves through force. We have what comes close to an obsession with democracy. You hear it constantly. We are over in Iraq because we are going to make it a democracy. Well, democratic elections are the way we all get here; but this obsession with democracy, well, democracy means there is a ruling of the majority. But what if the majority does not support freedom? I would like to see a time come to this place where we talk a lot less about democracy and more about liberty. Liberty is where the minority is protected. Under democracy, the majority is protected, and they can obliterate the minority. And this, in a sense, is what we keep talking about. But let us say they do not want democracy. Are we going to force it upon them? It looks like that is our goal; that we will, by gosh, force them into it if we have to. I have come to the conclusion that you cannot achieve this through the force of arms and that if you are participating in an unwelcome occupation, you cannot change a culture, you cannot change religious values, you cannot change a legal system. We would not accept the Chinese trying to tell us to live like the Chinese; and we are just as strange and different in Iraq as the Chinese would be here. So even with this grand motivation, it is a lost cause; and the sooner we own up to it, the better. If we want Iraq and other countries to act more like we do, it can be done; and that should be a goal. But there is a difference. There are two different ways we can do it. One, we can force people to do things and the other way is we can try to talk them into doing it in a voluntary fashion. If we did an exceptionally good job and we had a truly prosperous economy, which I believe a free market would achieve, which we do not have, where the greatest number of people would have the greatest benefits, truly set an example, have democratic elections but obey a constitution that is designed to protect liberty and protect minorities, if we set an example, then I sincerely believe others then would be more inclined to emulate us and to see us as an example. In a way, what happened in Vietnam, the achievement there without the Army was far better than the losses that occurred when we were trying to use force. But I just am worried about what is happening. I am worried about the expenditures. I am worried that the guerilla war is going to spread. I am concerned because I believe so sincerely that our policy of foreign intervention serves more to incite terrorists against our country than we will calm down by our being over there. I am convinced that these articles that now appear in the media about the al Qaeda now having an easier time recruiting, I believe those stories. I believe them. Whether it is right or wrong, I do not want to get into that issue, but I believe they are true. And that is a practical reason why nonintervention is so much better than intervention. Intervention leads to trouble, and it leads to expenditures. It leads to debt. It is such a grand idea that the Founding Fathers gave us about nonintervention and nonentangling alliances. It will do more to serve the cause of peace and prosperity than any other single change of any policy we could have here in this Congress. I am a little bit encouraged, though, about the fact that the debate may be shifting. In the Congress, not yet. Not yet. There are not too many supporters, and I know that, for nonintervention, for a constitutional foreign policy, to looking to the Founders. It is considered old-fashioned, and that truths do not stay so static, and times are different, and we have this obligation, and all the reasons why we have this moral obligation to go about the world. But where I am encouraged is outside of this place, where the American people are getting concerned. I would bet if we had a referendum in this country today with this $87 billion, I will tell you where I think that vote would have come down. I bet the American people would not have voted for it. I am convinced of that. But just yesterday, there was an announcement of a group that has organized that I find very fascinating and very encouraging. This group is called Coalition for a Realistic Foreign Policy. I have a copy of their statement of principles. More than 100 individuals are involved, mostly professors and other academicians and think-tank people. I do not know if there are any politicians in there. Hopefully, no politicians will be involved. But this is important. This is important because they want to get together and try to change the tone and the nature of the debate. Now, are they liberals or are they conservatives? Are they libertarian or are they constitutionalists? All of them. It is a mixture. They do not want just the liberal flavor or just the right-wing conservative flavor. It is anybody who is willing to sit down and talk about the disadvantage, the practical disadvantage of this road to empire and why we come up on the short end and that this moral obligation of us policing the world really is not a wise idea. I want to read a little bit from their statement of principles. It says: ``We are a diverse group of scholars and analysts from across the political spectrum who believe that the move toward empire must be halted immediately. The need for a change in direction is particularly urgent because imperial policies can quickly gain momentum with new interventions begetting new dangers, and thus the demand for further actions. If current trends are allowed to continue, we may well end up with an empire that most Americans, especially those whose sons and daughters are or will be sent into harm's way, don't really favor. ``The American people have not embraced the idea of the American empire, and they are unlikely to do so. Since rebelling against the British Empire, Americans have resisted the imperial impulse, guided by the founders' frequent warnings that republic and empire are incompatible. Empire is problematic because it subverts the freedoms and liberties of freedoms at home while simultaneously thwarting the will of the people abroad. An imperial strategy threatens to entangle America in an assortment of unnecessary and unrewarding wars. ``There are ominous signs that the strategy of empire has already begun to erode our fundamental rights and liberties. More and more power is being claimed by the executive branch. And on the economic front,'' which is important in my argument, ``on the economic front, an imperial strategy threatens to weaken us as a Nation, overextending and bleeding the economy and straining our military and Federal budgets.'' Further reading on from the Coalition for a Realistic Foreign Policy: ``The defenders of empire assert that the horrific acts of terrorism on September 11 demand that we assume new financial burdens to fund an expensive national security strategy, relax our commitment to individual liberty at home, and discard our respect for stated sovereignty abroad. Nothing could be further from the truth. Following 9-11, we should have refocused our attention on the very threats facing us in the 21st century. As a nation, we must not allow the events of 9- 11 to be used as a pretext for reshaping American foreign policy in a manner inconsistent with our traditions and values and contrary to our interests.'' And that is basically a brief outline of the principles of the Coalition for a Realistic Foreign Policy. We have been told by some of our leaders that standing up for good against evil is very hard work and it costs a lot of money and blood, but they have gone on to say we are willing to pay. These are the politicians. This has been true for thousands of years. The politicians are always grandiose in their goals and their schemes and their plans for what they think is best for the world, and they are always willing to pay with dollars and blood. But the politician never pays. Politicians here on the floor who are so anxious to go, many of them have not served, and many of them would not be very anxious to be serving over there. It is the politicians who promote the wars that rarely serve. The only way that anybody on this floor should ever vote to send our troops into harm's way is they should look at it in a very personal way. They should look at it in the sense of what would it be like if I would go there and I would be carrying a rifle on the front line, or I would be a target for some sniper. Do I want to be there? Is it worth that? Or would I send my son to do that, or would I send my grandson or my granddaughter to that type of danger? It has to be personalized. Because if it is just, oh, we are willing to pay. Where does the money come from? We are flat-out broke. We have had the biggest deficit ever. Our dollar is going down on the market, and we are now assuming more liabilities. When we spend $87 billion in Iraq, that is literally taken out of our economy. Imagine how many jobs and how much improvement on the standard of living of Americans could occur with $87 billion, and at the same time believe sincerely that a policy of nonintervention would be the best policy for peace and prosperity. I do not know how anybody could reject that policy. It is fantastic. It is the policy of free people. It is not the policy of empire. It is not the policy of imperialism. But I am going to win this argument. Not because I am persuasive. I will win this argument that we have gone too far and have overextended. Sadly, I will win this argument because we are going to go broke. Because all great nations who believe that they can spread their will around the world, they always overextend; and then it virtually always leads to the debasement of the currency. In the old days, they deluded the metal or clipped the coins. Today, it is more sophisticated, because we run up the debt, we send it over to the Fed, and they print the money. But that is debasing the currency, and it undermines the standard of living, already occurring with people on fixed incomes. So it will finally come to a halt, just as our intervention in Vietnam finally came to a sad halt. It did end. But the rest will come to an end when we can no longer afford it. We should have greater faith and greater confidence in freedom. Freedom works. And that was the message of the Founders. That is the message of the Constitution. But we have lost our confidence. We have lost our way. We cannot even have one single problem exist throughout the country without coming here for another law. I think it is time that free people gain some confidence, believing sincerely that we will all be better off, we will all be more prosperous, we will all be much freer, and we will all be much safer. And then, when we achieve that, then I believe other countries of the world will have a stronger desire to emulate us, rather than hate us.

Mr. PAUL

Mr. PAUL. Mr. Chairman, I thank the chairman for yielding me this time. Mr. Chairman, this $87 billion is a little bit steep for my wallet, and it is a little bit steep for probably the wallets of most Americans. So I will be voting against it. But I understand this is called a supplemental. It is interesting that it is a supplemental because we have not passed a budget; so I have to suggest maybe we ought to call this a preemptive budget rather than a supplemental. But it is the largest, and to have it before the regular budget is pretty astounding that we are going to spend this type of money. But I want to take this minute I have to quote from a book, ``A World Transformed,'' and this was written about 5 years ago talking about Iraq. And I think this is a very serious quote and something worth listening to: ``Trying to eliminate Saddam Hussein . . . would have incurred incalculable human and political costs. Apprehending him was probably impossible . . . We would have been forced to occupy Baghdad and, in effect, rule Iraq . . . There was no available `exit strategy' we could see, violating another of our principles. Furthermore, we had been self-consciously trying to set a pattern for handling aggression in the post-Cold War world. Going in and occupying Iraq, thus unilaterally exceeding the United Nations' mandate, would have destroyed the precedent of international response to aggression that we hoped to establish. Had we gone the invasion route, the United States could conceivably be an occupying power in a bitterly hostile land.'' That was written 5 years ago, very perceptive. It was written by President Bush, Sr. So I think we are here now in a very hostile land with a very difficult situation. I was a strong opponent of the war for two reasons: one, I sincerely believed our national security was not threatened, and I also was convinced that it had no relationship to 9-11; and I think those two concerns have been proven to be correct. Many who had voted against the war now suggest that they might vote for this appropriation because they feel it is necessary to vote to support the troops. I think that is a red herring argument because if we take a poll, and there have been some recent polls of the troops in Iraq, we find out that probably all of them would love to come home next week. So I do not see how a vote against this appropriation can be construed. As a matter of fact, that is challenging the motivation of those of us who will oppose the legislation, that we do not support the troops. So I am in support of voting against this appropriation.

Mr. PAUL

Mr. PAUL. Mr. Speaker, no one questions the need for the Federal Government to obtain the necessary resources to fill its constitutional role of providing for the common defense. However, the federal government must fulfill this duty in a manner that does not conflict in any way with the Constitution or endanger republican government. The Defense Production Reauthorization Act (DPA), which gives almost unchecked power to the executive to interfere in the economy in the name of ``national security,'' fails both of these standards. In fact, when I inquired at the sole hearing the House Financial Services Committee held on this issue as to which section of the Constitution authorized such sweeping grants of power to the Executive, I was greeted by silence from the ``expert'' witnesses! Under this bill, the President is given authority to void private contracts in order to ensure that federal defense priorities, as determined by the executive, are met. The only limitation on the President's judgment is a requirement that he submits a series of ``findings'' to Congress. The Executive also has what appears to be unchecked authority to use financial incentives such as loan guarantees, direct loans, and purchase guarantees to ensure production of items he determines are in the national interest. Congress appears to have no ability to perform any real oversight of a Presidential action under the DPA. In fact, my office has been informed by the Congressional Research Service that past Presidents may have invoked the DPA without even submitting the required findings to Congress! The wide grant of unchecked power to the Executive runs counter to the intent of the drafters of the Constitution. The Founders carefully limited the executive power because they recognized that an executive with unfettered power was a threat to liberty. In recent years we have seen administrations of both parties undermine the Constitutional separation of powers via enhanced reliance on executive orders and unilateral decision-making. The Defense Production Reauthorization Act provides Constitutional blessing to this usurpation of power, and not just in areas clearly related to national defense. For example, the DPA has been used to justify federal interference in the energy market. It is an open question what other exercise of federal power could be justified as related to defense. For example, federal education programs has been justified on the grounds that an educated population is vital to national defense, so perhaps a future president will use DPA to impose a national curriculum! I am also concerned that this bill violates the Fifth Amendment's takings clause. In particular, DPA allows the government to seize private property by interfering with the performance of private contracts in order to give priority to military production. This action reduces the value of the affected parties' proprietary interests, and thus is a taking, requiring the government to provide just compensation to the affected party. The Fifth Amendment intends to assure that the government does not unfairly burden one group of citizens in carrying out its constitutional functions. By not providing for just compensation, DPA allows the executive to unfairly burden one group of citizens for costs that the Constitution requires be shared among the entire population. In conclusion, Mr. Speaker, the Defense Production Act gives the executives unchecked power to meddle in the economy, flying in the face of the original constitutional structure and endangering the very liberty it claims to protect. Therefore, I must oppose this bill.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I would like to express my strong opposition to this ill-conceived and ill-timed legislation. This bill will impose what is effectively a trade embargo against Syria and will force the severance of diplomatic and business ties between the United States and Syria. It will also significantly impede travel between the United States and Syria. Worse yet, the bill also provides essentially an open-ended authorization for the president to send U.S. taxpayer money to Syria should that country do what we are demanding in this bill. This bill cites Syria's alleged support for Hamas, Hizballah, Palestine Islamic Jihad, the Popular Front for the Liberation of Palestine, and other terrorist groups as evidence that Syria is posing a threat to the United States. But none of these organizations targets the United States. Not since the Hizballah bombing of a U.S. Marine barracks in Lebanon in 1983 has any of these organizations attacked the United States. After that attack on our Marines, who were sent to Beirut to intervene in a conflict that had nothing to do with the United States, President Ronald Reagan wisely ordered their withdrawal from that volatile area. Despite what the interventionists constantly warn, the world did not come to an end back in 1983 when the president decided to withdraw from Beirut and leave the problems there to be worked out by those countries most closely involved. What troubles me greatly about this bill is that although the named, admittedly bad, terrorist organizations do not target the United States at present, we are basically declaring our intention to pick a fight with them. We are declaring that we will take preemptive actions against organizations that apparently have no quarrel with us. Is this wise, particularly considering their capacity to carry out violent acts against those with whom they are in conflict? Is this not inviting trouble by stirring up a hornet's nest? Is there anything to be gained in this? This bill imposes an embargo on Syria for, among other reasons, the Syrian government's inability to halt fighters crossing the Syrian border into Iraq. While I agree that any foreign fighters coming into Iraq to attack American troops is totally unacceptable, I wonder just how much control Syria has over its borders--particularly over the chaotic border with Iraq. If Syria has no control over its borders, is it valid to impose sanctions on the country for its inability to halt clandestine border crossings? I find it a bit ironic to be imposing a trade embargo on Syria for failing to control its borders when we do not have control of our own borders. Scores cross illegally into the United States each year--potentially including those who cross over with the intent to do us harm--yet very little is done to secure our own borders. Perhaps this is because our resources are too engaged guarding the borders of countless countries overseas. But there is no consistency in our policy. Look at the border between Pakistan and Afghanistan: while we continue to maintain friendly relations and deliver generous foreign aid to Pakistan, it is clear that Pakistan does not control its border with Afghanistan. In all likelihood, Osama bin Laden himself has crossed over the Afghan border into Pakistan. No one proposes an embargo on Pakistan. In all likelihood, Osama bin Laden himself has crossed over the Afghan border into Pakistan. On the contrary: the supplemental budget request we are taking up this week includes another $200 million in loan guarantees to Pakistan. I am also concerned about the timing of this bill. As we continue to pursue Al-Qaeda--most of which escaped and continue to operate--it seems to me we need all the help we can get in tracking these criminals down and holding them to account for the attack on the United States. As the AP reported recently: So, too, are Syria's claims, supported by U.S. intelligence, that Damascus has provided the United States with valuable assistance in countering terror. The Syrians have in custody Mohammed Haydar Zammer, believed to have recruited some of the Sept. 11 hijackers, and several high-level Iraqis who were connected to the Saddam Hussein government have turned up in U.S. custody. Numerous other press reports detail important assistance Syria has given the U.S. after 9/11. If Syria is providing assistance to the U.S. in tracking these people down--any assistance--passing this bill can only be considered an extremely positive and welcome development. Does anyone here care to guess how much assistance Syria will be providing us once this bill is passed? Can we afford to turn our back on Syria's assistance, even if it is not as complete as it could be? That is the problem with this approach. Imposing sanctions and cutting off relations with a country is ineffective and counterproductive. It is only one-half step short of war and very often leads to war. This bill may well even completely eliminate any trade between the two countries. It will almost completely shut the door on diplomatic relations. It sends a strong message to Syria and the Syrian people: that we no longer wish to engage you. This cannot be in our best interest. This bill may even go further than that. In a disturbing bit of deja vu, the bill makes references to ``Syria's acquisition of weapons of mass destruction (WMD)'' and threatens to ``impede'' Syrian weapons ambitions. This was the justification for our intervention in Iraq, yet after more than a thousand inspectors have spent months and some 300 million dollars none have been found. Will this bill's unproven claims that Syria has WMD be later used to demand military action against that country? Mr. Speaker: history is replete with examples of the futility of sanctions and embargoes and travel bans. More than 40 years of embargo against Cuba have not produced the desired change there. Sadly, embargoes and sanctions most often hurt those least responsible. A trade embargo against Syria will hurt American businesses and will cost American jobs. It will make life more difficult for the average Syrian--with whom we have no quarrel. Making life painful for the population is not the best way to win over hearts and minds. I strongly urge my colleagues to reject this counterproductive bill.

Mr. PAUL

Mr. PAUL. Madam Speaker, I rise to express my grave concerns over H. Con. Res 274. The misnamed National Endowment for Democracy (NED) is nothing more than a costly program that takes U.S. taxpayer funds to promote favored politicians and political parties abroad. Madam Speaker, what the NED does in foreign countries, through its recipient organizations the National Democratic Institute (NDI) and the International Republican Institute (IRI), would be rightly illegal in the United States. The NED injects ``soft money'' into the domestic elections of foreign countries in favor of one party or the other. Imagine what a couple of hundred thousand dollars will do to assist a politician or political party in a relatively poor country abroad. It is particularly Orwellian to call U.S. manipulation of foreign elections ``promoting democracy.'' How would Americans feel if the Chinese arrived with millions of dollars to support certain candidates deemed friendly to China? Would this be viewed as a democratic development? In an excellent study of the folly of the National Endowment for Democracy, CATO Institute scholar Barbara Conry notes that: ``NED, which also has a history of corruption and financial mismanagement, is superfluous at best and often destructive. Through the endowment, the American taxpayer has paid for special-interest groups to harass the duly elected governments of friendly countries, interfere in foreign elections, and foster the corruption of democratic movements . . . ``. . . the controversy surrounding NED questions the wisdom of giving a quasi-private organization the fiat to pursue what is effectively an independent foreign policy under the guise of ``promoting democracy.'' Proponents of NED maintain that a private organization is necessary to overcome the restraints that limit the activities of a government agency, yet they insist that the American taxpayer provide full funding for this initiative. NED's detractors point to the inherent contradiction of a publicly funded organization that is charged with executing foreign policy (a power expressly given to the federal government in the Constitution) yet exempt from nearly all political and administrative controls . . . ``. . . In the final analysis, the endowment embodies the most negative aspects of both private aid and official foreign aid--the pitfalls of decentralized `loose cannon' foreign policy efforts combined with the impression that the United States is trying to `run the show' around the world.'' The National Endowment for Democracy is dependent on the U.S. taxpayer for funding, but because NED is not a government agency, it is not subject to Congressional oversight. It is indeed a heavily subsidized foreign policy loose cannon. Since its founding in 1983, the National Endowment for Democracy has been headed by Carl Gershman, a member of the neo-Trotskyite Social Democrats/USA. Perhaps that is one reason much of what NED has done in the former Communist Bloc has ended up benefiting former communists in those countries. As British Helsinki Human Rights Group Director Christine Stone has written: Both (IRI and NDI) are largely funded by the National Endowment for Democracy (NED) . . . which, in turn, receive money from the American taxpayer. Both have favoured the return to power of former high-ranking Communists which has also meant co-opting foot-soldiers from the new left who have extremely liberal ideas . . . Skender Gjinushi, speaker of the Albanian parliament, thanks the IRI for its assistance in drafting the Albanian constitution in 1998. What the IRI does not say is that Gjinushi was a member of the brutal Stalinist Politburo of Enver Hoxha's Communist Party until 1990 and one of the main organizers of the unrest that led to the fall of the Democratic Party government in 1997 and the death of over 2000 people. President Stoyanov of Bulgaria drools: ``Without IRI's support we could not have come so far so fast.'' Indeed. Indeed. So far did they come that Ivan Kostov (who supplies another encomium to IRI) was catapulted from his job teaching Marxism-Leninism at Sofia University to being prime minister of Bulgaria and a leader of `reform.' '' In Slovakia, NED funded several initiatives aimed at defeating the freely-elected government of Prime Minister Vladimir Meciar, who, interestingly, had been persecuted by the previous Communist regime. After the election, an IRI newsletter boasted that ``IRI polls changed the nature of the campaign,'' adding that IRI efforts secured ``a victory for reformers in Slovakia.'' What the IRI does not say is that many of these ``reformers'' had been leading members of the former Communist regime of then-Czechoslovakia. Is this democracy? More recently, IRI president George A. Folsom last year praised a coup against Venezuela's democratically-elected president, saying, ``Last night, led by every sector of civil society, the Venezuelan people rose up to defend democracy in their country.'' It was later revealed that the National Endowment for Democracy provided funds to those organizations that initiated the violent revolt in the streets against Venezuela's legal leaders. More than a dozen civilians were killed and hundreds were injured in this attempted coup. Is this promoting democracy? Madam Speaker, the National Endowment for Democracy, by meddling in the elections and internal politics of foreign countries, does more harm to the United States than good. It creates resentment and ill-will toward the United States among millions abroad. It is beyond time to de-fund this Cold War relic and return to the foreign policy of our founders, based on open relations and trade with all countries and free from meddling and manipulation in the internal affairs of others.

Mr. PAUL

Mr. PAUL. Mr. Speaker, the American dream, as conceived by the Nation's Founders, has little in common with H.R. 1276, the so-called American Dream Downpayment Act. In the original version of the American dream, individuals earned the money to purchase a house through their own efforts, often times sacrificing other goods to save for their first downpayment. According to the sponsors of H.R. 1276, that old American dream has been replaced by a new dream of having the Federal Government force your fellow citizens to hand you the money for a downpayment. H.R. 1276 not only warps the true meaning of the American dream, but also exceeds Congress' constitutional boundaries and interferes with and distorts the operation of the free market. Instead of expanding unconstitutional federal power, Congress should focus its energies on dismantling the federal housing bureaucracy so the American people can control housing resources and use the free market to meet their demands for affordable housing. As the great economist Ludwig Von Mises pointed out, questions of the proper allocation of resources for housing and other goods should be determined by consumer preference in the free market. Resources removed from the market and distributed according to the preferences of government politician and bureaucrats are not devoted to their highest- valued use. Thus, government interference in the economy results in a loss of economic efficiency and, more importantly, a lower standard of living for all citizens. H.R. 1276 takes resources away from private citizens, through confiscatory taxation, and uses them for the politically favored cause of expanding home ownership. Government subsidization of housing leads to an excessive allocation of resources to the housing market. Thus, thanks to government policy, resources that would have been devoted to education, transportation, or some other good desired by consumers, will instead be devoted to housing. Proponents of this bill ignore the socially beneficial uses the monies devoted to housing might have been put to had those resources been left in the hands of private citizens. Finally, while I know this argument is unlikely to have much effect on my colleagues, I must point out that Congress has no constitutional authority to take money from one American and redistribute it to another. Legislation such as H.R. 1276, which takes tax money from some Americans to give to others whom Congress has determined are worthy, is thus blatantly unconstitutional. I hope no one confuses my opposition to this bill as opposition to any congressional actions to ensure more Americans have access to affordable housing. After all, one reason many Americans lack affordable housing is because taxes and regulations have made it impossible for builders to provide housing at a price that could be afforded by many lower-income Americans. Therefore, Congress should cut taxes and regulations. A good start would be generous housing tax credits. Congress should also consider tax credits and regulatory relief for developers who provide housing for those with low incomes. For example, I am cosponsoring H.R. 839, the Renewing the Dream Tax Credit Act, which provides a tax credit to developers who construct or rehabilitate low-income housing. H.R. 1276 distorts the economy and violates constitutional prohibitions on income redistribution. A better way of guaranteeing an efficient housing market where everyone could meet their own needs for housing would be for Congress to repeal taxes and programs that burden the housing industry and allow housing needs to be met by the free market. Therefore, I urge my colleagues to reject this bill and instead develop housing policies consistent with constitutional principles, the laws of economics, and respect for individual rights.

Mr. PAUL

Mr. PAUL. Mr. Speaker, many of those who share my belief that the most effective education reform is to put parents back in charge of the education system have embraced government-funded voucher programs as a means to that end. I certainly sympathize with the goals of voucher proponents and I believe that States and local governments have the right, protected by the Tenth Amendment, to adopt any sort of voucher program they believe meets the needs of their communities. However, I have a number of concerns regarding proposals to implement a voucher plan on the Federal level. The basic reason supporters of parental control of education should view Federal voucher programs with a high degree of skepticism is that vouchers are a creation of the government, not the market. Vouchers are a taxpayer-funded program benefiting a particular group of children selected by politicians and bureaucrats. Therefore, the Federal voucher program supported by many conservatives is little more than another tax-funded welfare program establishing an entitlement to a private school education. Vouchers thus raise the same constitutional and moral questions as other transfer programs. Yet, voucher supporters wonder why middle-class taxpayers, who have to sacrifice to provide a private school education to their children, balk at being forced to pay more taxes to provide a free private education for another child. It may be argued that vouchers are at least a more efficient welfare program than continuing to throw taxpayer money at public schools. However, the likely effect of a voucher program is to increase spending on new programs for private schools while continuing to increase spending on programs for public schools. For example, Mr. Speaker, during the debate on the DC voucher program, voucher proponents vehemently denied that any public schools would lose any Federal funding. Some even promised to support increased Federal spending on DC's public and charter schools. Instead of reducing funding for failed programs, Congress simply added another 10 million dollars (from taxes or debt) to the bill to pay for the vouchers without making any offsetting cuts. In a true free market, failing competitors are not guaranteed a continued revenue stream. Many supporters of vouchers couch their support in rhetoric about a child's right to a quality education and the need for equal educational opportunities for all. However, accepting the premise that people have a ``right'' to a good of a certain quality logically means accepting government's role in establishing standards to ensure that providers are giving their consumers a ``quality'' product. Thus, in order to ensure that vouchers are being used to fulfilling students' ``right'' to a ``quality'' education (as defined by the government) private schools will be forced to comply with the same rules and regulations as the public schools. Even some supporters of vouchers recognize the threat that vouchers may lead to increased Federal regulation of private schools. These voucher supporters often point to the fact that, with vouchers, parents will choose which schools receive public funding to assuage the concerns of their critics. However, even if a voucher program is free of State controls at its inception, it will not remain so for long. Inevitably, some parents will choose a school whose curriculum is objectionable to many taxpayers; say an academy run by believers in the philosophy of the Nation of Islam. This will lead to calls to control the schools for which a voucher can be used. More likely, parents will be given a list of approved schools where they can use their voucher at the inception of the program. Government bureaucrats will have compiled the list to ``help'' parents choose a quality school for their children. The fears of these voucher critics was confirmed on the floor of the House of Representatives when the lead sponsor of the DC voucher amendment admitted that under his plan the Department of Education would have to begin accrediting religious schools to ensure that only qualified schools participate in the voucher program because religious schools currently do not need to receive government accreditation. Government accreditation is the first step toward government control. Several private, Christian schools in my district have expressed concerns that vouchers would lead to increased government control of private education. This concern is not just limited to Christian conservatives; the head of the Jewish Anti-Defamation league opposed the recent DC voucher bill because he feared it would lead to ``. .an unacceptable effort by the government to monitor and control religious activities.'' Voucher supporters will fall back on the argument that no school is forced to accept vouchers. However, those schools that accept vouchers will have a competitive advantage over those that do not because they will be perceived as being superior since they have the ``government's seal of approval.'' Thus, those private schools that retain their independence will likely be forced out of business by schools that go on the government dole. We have already seen how a Federal education program resembling a voucher program can lead to Federal control of education. Currently, Federal aid to college students is dispersed in the form of loans or grants to individual students who then transfer these funds to the college of their choice. However the government has used its support of student loans to impose a wide variety of policies dealing with everything from the makeup of student bodies to campus safety policies. There are even proposals for Federal regulation of the composition of college faculties and course content! I would remind my colleagues that only two colleges refuse to accept Federal funds (and thus Federal control) today. It would not be a victory for either liberty or quality education if the experience of higher education was replicated in private K-12 education. Yet, that is the likely result if the supporters of vouchers have their way. Some supporters of centralized education have recognized how vouchers can help them advance their statist agenda. For example, Sibhon Gorman, writing in the September 2003 issue of the Washington Monthly, suggests that, ``The way to insure that vouchers really work, then is to make them agents of accountability for the private schools that accept them. And the way to do that is to marry the voucher concept with the testing regime mandated by Bush's No Child Left Behind Act. Allow children to go to the private school of their choosing, but only so long as that school participates in the same testing requirements mandates for public schools.'' In other words, parents can choose any school they want as long as the school teaches the government approved curriculum so the students can pass the government approved test. Instead of expanding the Federal control over education in the name of parental control, Congress should embrace a true agenda of parental control by passing generous education tax credits. Education tax credits empower parents to spend their own money on their children's education. Since the parents control the education dollar, the parents control their children's education. In order to provide parents with control of education, I have introduced the Family Education Freedom Act (H.R. 612) that provides all parents with a tax credit of up to $3,000. The credit is available to parents who choose to send their children to public, private, or home school. Education tax credits are particularly valuable to lower income parents. The Family Education Freedom Act restores true accountability to education by putting parents in control of the education dollar. If a child is not being educated to the parents' satisfaction, the parent will withdraw that student from the school and spend their education dollars someplace else. I have also introduced the Education Improvement Tax Cut Act (H.R. 611) that provides a tax credit of up to $3,000 for in-kind or cash donation to public, private, or home schools. The Education Improvement Tax Cut Act relies on the greatest charitable force in history to improve the education of children from low-income families: the generosity of the American people. As with parental tax credits, the Education Improvement Tax Cut Act brings true accountability to education since taxpayers will only donate to schools that provide a quality education. Mr. Speaker, proponents of vouchers promise these programs advance true market principles and thus improve education. However, there is a real danger that Federal voucher programs will expand the welfare state and impose government ``standards'' on private schools, turning them into ``privatized'' versions of public schools. A superior way of improving education is to return control of the education dollar directly to the American people through tax cuts and tax credits. I therefore hope all supporters of parental control of education will support my Family Education Freedom Act and Education Improvement Tax Cut Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to pay tribute to one of America's leading advocates for liberty, my friend Larry Reed, who celebrates his 50th birthday on September 29th. In 1993 Larry founded the Mackinac Center for Public Policy in Midland, Michigan. Under his leadership, Mackinac has emerged as one of the largest, most prolific, and effective think tanks in America. Mackinac focuses on issues affecting Michigan; however, much of their work is useful to policymakers at the State and national level. Prior to founding Mackinac, Larry served as Chair of the Department of Economics at Northwood University in Midland, Michigan. While at Northwood, Larry developed the university dual major in Economic and Business management and founded the University's ``Freedom Seminar.'' Larry has also been a candidate for Congress. In addition to running Mackinac, Larry is a prolific author. He has written over 800 newspaper columns and articles, 200 radio commentaries, dozens of articles in magazines and journals in the United States and abroad. Larry is also the author of five books including Lessons From the Past: The Silver Panic of 1893 and Private Cures for Public Ills: The Promise of Privatization. All of Larry's writings reflect his unswerving commitment to limited government and the free market as the best way to promote human happiness. Larry has also found time to deliver more than 700 speeches, traveling to 40 states and 10 foreign countries to spread the freedom philosophy. Larry also promotes liberty as a member and past chairman of the Board of Trustees of the Foundation for Economic Education (FEE), the nation's oldest free-market educational institution. In 1993, Larry was appointed by then-Governor John Engler to head the Headlee Amendment Blue Ribbon Commission. Governor Engler also appointed Larry to the task force of the Secchia Commission on Total Quality Government, where Larry helped develop policies aimed at streamlining Michigan's state government. I am sure the taxpayers of Michigan are grateful to Larry for his efforts to reduce unnecessary spending. Mr. Speaker, the great economist Ludwig Von Mises once said that ``everyone. . . . must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historic struggle, the decisive battle into which our epoch has plunged.'' Few have so vigorously thrust themselves into the intellectual and policy battle on the side of freedom as Larry Reed. It is therefore my privilege to pay tribute to this champion of liberty on his 50th birthday.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to honor John and Geraldine Dettling, a couple with longstanding roots in the 14th congressional district of Texas. Mr. and Mrs. Dettling recently celebrated 60 years of marriage, an incredible milestone that deserves recognition and great respect. The longevity of their marriage serves as an inspiration for all couples today. John Dettling and Geraldine Wendel met in south Texas more than 6 decades ago. They married in El Campo, Texas in 1943, on the eve of World War II. Less than 1 year later, John left for Europe as a soldier. Like many couples of the era, the war separated the young newlyweds for some time. Happily, John returned from the war safe and sound and they began a long life together. The couple built a home in Wharton, Texas, where they still live today. Over the years the Dettlings were blessed with 6 children, along with (so far) 11 grandchildren and 6 great-grandchildren. John worked as a barber for 30 years, and then worked as a security guard for 6 years. Throughout the decades Geraldine worked hard at home raising the children; when they were older she embarked on a nursing career. Both enjoy retirement today. I'm happy to report that the Dettlings' momentous 60th anniversary did not go unnoticed. They renewed their vows at Holy Family Catholic Church in Wharton. Afterward, an anniversary reception was held for the couple at the Wharton County Historical Museum, where they celebrated with family and 200 well-wishers. Mr. Speaker, in today's transient world the Dettlings stand out as a couple who maintained both their marriage and their local roots for decades. It's my privilege to honor them in the House of Representatives today.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Right to Keep and Bear Arms Act. This legislation prohibits U.S. taxpayer dollars from being used to support or promote any United Nations actions that could in any way infringe on the Second Amendment. The Right to Keep and Bear Arms Act also expresses the sense of Congress that proposals to tax, or otherwise limit, the right to keep and bear arms are ``reprehensible and deserving of condemnation.'' Over the past decade, the UN has waged a campaign to undermine the right to keep and bear arms, which is protected by the Second Amendment of the US Constitution. UN Secretary-General Kofi Annan has called on members of the Security Council to ``tackle'' the proliferation and ``easy availability'' of small arms and light weapons. Just this June, the UN tried to ``tackle'' gun rights by sponsoring a ``Week of Action Against Small Arms.'' Of course, by small arms, the UN really means all privately owned firearms. Secretary Annan is not the only globalist calling for international controls on firearms. For example, some world leaders, including French President Jacques Chirac, have called for a global tax on firearms. Meanwhile, the UN Security Council's ``Report of the Group of Governmental Experts on Small Arms'' calls for a comprehensive program of worldwide gun control and praises the restrictive gun policies of Red China and France! Contrary to the UN propaganda, the right to keep and bear arms is a fundamental right and, according to the drafters of the Constitution, the guardian of every other right. Scholar John Lott has shown that respecting the right to keep and bear arms is one of the best ways governments can reduce crime. Conversely, areas where the government imposes gun control have higher crime rates. Thus, far from making people safer, gun control endangers innocent people by increasing the odds that they will be victimized! Gun control also increases the odds that people will lose their lives and liberties to power-hungry government officials. Tyrannical governments throughout the world kill approximately 2,000,000 people annually. Many of these victims of tyranny were first disarmed by their governments. If the UN is successful in implementing a global regime of gun control, then more innocent lives will be lost to public (and private) criminals. I would remind my colleagues that policies prohibiting the private ownership of firearms were strongly supported by tyrants such as Adolph Hitler, Joseph Stalin, and Mao Tse-Tong. Mr. Speaker, global gun control is a recipe for global tyranny and a threat to the safety of all law-abiding persons. I therefore hope all my colleagues will help protect the fundamental human right to keep and bear arms by cosponsoring the Right to Keep and Bear Arms Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Thrift Savings Fund Improvement Act. This legislation to expand the investment options available to congressional and other federal employees by creating a precious metals investment fund in the Thrift Savings Plan (TSP). Adding a precious metals fund to the TSP will enhance the plan's ability to offer congressional employees a wide range of investment options that can provide financial security even during difficult economic conditions. All of us recognize the importance of maintaining a professional congressional staff and promoting longevity of service in order to enhance stability in the operations of Congress. This is why we have recently enacted legislation authorizing new benefits, such as a student loan forgiveness program, and have taken other measures to improve staff compensation and benefits. The Thrift Savings Plan is one of the most important benefits offered to congressional employees. A strong TSP can obviously play a key role in attracting and retaining talented individuals to serve in the legislative branch. However, the three stock index funds in the Thrift Savings Plan have not recently performed well, especially when measured against inflation. In 2002, for example, losses from these funds were greater than three, four, and five percent, respectively, in the month of December and, more than 15, 18, and 22 percent, respectively, for the entire year! In contrast, increases in gold spot prices more than offset the losses experienced by even the worst performing stock-indexed fund in the Thrift Savings Plan in 2002, with the price of gold increasing by nearly 25 percent in the year and by more than nine percent in December! Recent gains aside, precious metals have a number of features that make them a sound part of a prudent investment strategy. In particular, inflation does not erode the value of precious metals is not eroded over time. Thus, precious metals can serve as a valuable ``inflation hedge.'' Precious metals also maintain, or even increase, their value during times of stock market instability, such as what the country is currently experiencing. Thus, investments in precious metals can help ensure that an investment portfolio maintains its value during times of economic instability. Federal employees could greatly benefit from the protection against inflation and economic downturns provided by prudent investments in precious metals. I, therefore, once again urge my colleagues to cosponsor the Thrift Savings Fund Improvement Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, the neo-conservative media machine has been hard at work lately drumming up support for the $87 billion appropriation to extend the precarious occupation of Iraq. Opposition to this funding, according to the Secretary of Defense, encourages our enemies and hinders the war against terrorism. This is a distortion of the facts and is nothing more than destroying the messenger when one disapproves of the message. Those within the administration, prior to the war, who warned of the dangers and real costs were fired. Yet it now turns out that they were more right, that it would not be a cakewalk, that it would require a lot more troops, and costs would far exceed original expectations. The President recently reminded us that we went into Iraq to force Iraq's compliance with U.N. resolutions since the U.N. itself was not up to the task. It was not for national security reasons. Yet we all know that the U.N. never endorsed this occupation. The question we in the Congress ought to ask is this: What if our efforts to Westernize and democratize Iraq do not work? Who knows? Many believe that our pursuit of nation building in Iraq will actually make things worse in Iraq, in the entire Middle East, through the entire Muslim world, and even here in the United States. This is a risky venture and this new funding represents an escalation of our efforts to defend a policy that has little chance of working. Since no weapons of mass destruction were found in Iraq, nor any evidence that the army of Saddam Hussein could have threatened the security of any nation, let alone the United States, a new reason is now given for the endless entanglement in a remote area of the world 6,000 miles from our homeland. We are now told that the need to be in Iraq is to fight the terrorists that attacked us on 9/11. Yet, not one shred of evidence has been produced to show that the Iraqi government had anything to do with 9/11 or the al-Qaeda. The American people are first told they have to sacrifice to pay for the bombing of Iraq. Now they must accept the fact that they must pay to rebuild it. If they complain, they will be accused of being unpatriotic and not supporting the troops. I wonder what a secret poll of our troops would show on whether or not they thought coming home next week indicated a lack of support for their well-being. Some believe that not raising taxes to pay for the war is a way to pay for the war on the cheap. It is not. When deficits skyrocket the Federal Government prints the money and the people are taxed by losing value in their savings and in their paychecks. The inflation tax is a sinister and evil way to pay for unpopular wars. It has been done that way for centuries. Mr. Speaker, I guess we shouldn't worry because we can find a way to pay for it. Already we are charging our wounded soldiers $8.10 a day for food when recuperating in a hospital from war injuries. We also know that other soldiers are helping out by buying their own night vision goggles, GPSs, short wave radios, backpacks and even shoes. That is sure to help as well. It does not seem like much of a bother to cut veterans' benefits. Besides, many conservatives for years have argued that deficits do not really matter, only tax rates do. So let us just quit worrying about deficits and this $87 billion supplemental. Seriously, though, funding for this misadventure should be denied no matter how well-meaning its supporters are. To expect a better world to come from force of arms abroad and confiscatory taxation at home is nothing but a grand illusion. The sooner we face the reality, the better. While we nation-build in Iraq in the name of defeating terrorism, we ignore our responsibilities to protect our borders at home and we compromise the liberties of our citizens with PATRIOT Act types of legislation. There are two main reasons we need to reject the foreign policy of the past 50 years that has been used to rationalize our presence in Iraq. First, the practical: We cannot expect to force Western, U.S.- style democracy on a nation that for over 1,000 years learned to live with and accept an Islamic based legal system. No matter what we say or believe, to the Iraqis they have been invaded by the Christian West, and whether it is the United States, U.N. or European troops that are sent to teach them the ways of the West it will not matter. Second, we have no constitutional authority to police the world or involve ourselves in nation building, in making the world safe for our style of democracy. Our founders advised against it and the early Presidents followed that advice. If we believe strongly in our ideals, the best way to spread them is to set a good example so that others will voluntarily emulate us. Force will not work. Besides, we do not have the money. The $87 billion appropriations request should be rejected.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I ask unanimous consent to take the time of the gentleman from Georgia (Mr. Norwood).

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Steel Financing Fairness Act. This bill helps our Nation's beleaguered steel industry by stopping the Government from forcing American steel workers to subsidize their foreign competitors. Specifically, the bill prohibits the Overseas Private Investment Corporation (OPIC) and the Export- Import Bank (EXIMBANK) from providing any assistance to countries that subsidize their steel industries. The Steel Financing Fairness Act also instructs the Secretary of the Treasury to reduce America's contribution to the International Monetary Fund (IMF) by a prorated share of the IMF's assistance to countries that subsidize their steel industries. No one can doubt that the United States steel industry is in crisis. Approximately 15 million tons of flat-rolled capability (20 percent of the existing domestic capacity base at the start of 2000) was closed in the 18 months from September 2000 to December 2001. The decline of the steel industry has a human cost: in just the last five years, 30,000 Americans once productively employed in the steel industry have joined the ranks of the unemployed. One of the problems facing America's domestic steel industry is that it must compete with foreign industries that receive subsidies from their governments. Some of these subsidies are explicitly intended to provide these companies with a non-market advantage over American steel producers. The U.S. Government further compounds the damage caused by these subsidies by forcing the domestic steel producers to support their major competitors through taxpayer-funded programs. For example, according to the most recent figures available, the eight countries with the greatest EXIMBANK exposure are all among the top ten exporters of steel and/or steel products to the United States. In fact, EXIMBANK has provided over $250 billion of U.S. taxpayer support to these countries. Meanwhile, OPIC has provided over $3 billion of the taxpayers' money to seven of the top ten leading steel exporters. Thus, the American taxpayer has provided at least $253 billion worth of support to the countries that are the leading competitors of the domestic steel industry. This does not count the funds provided these countries by the IMF. Since money is fungible, the practical effect of providing aid to countries which practice industrial policy is to free up resources these governments can use to further subsidize their steel industries. Thus, taxpayer dollars sent to foreign governments and industries can benefit foreign steel manufacturers even if American taxpayer money is not sent to directly benefit those industries. However, hard as it may be to believe, organizations funded by American taxpayers actually use American tax dollars to directly assist foreign steel producers! For example, among the projects funded by EXIMBANK in recent years is an $18 million loan guarantee to expand steel manufacturing in Red China. Ironically, many of the supporters of these foreign giveaways claim to be promoters of free trade. This claim makes as much sense as a supporter of higher taxes and spending claiming to be a fiscally conservative supporter of limited government. Free trade is the peaceful exchange of goods and services across borders unhampered by government interference. Taxing American workers to support their overseas competitors is not free trade. Instead, it is corporatism designed to benefit certain politically powerful interests at the expense of American entrepreneurs and workers. I have no doubt that America's steel industry can out-compete the steel industry of any country if allowed to compete on a level planning field. Unfortunately, due in part to government policy, today's playing field is in no way level. Congress must end this economically destructive, immoral, and unconstitutional policy of forcing owners and workers in the domestic steel industry to subsidize their competitors. I therefore call upon my colleagues to cosponsor the Steel Financing Fairness Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce the Free Housing Market Enhancement Act. This legislation restores a free market in housing by repealing special privileges for the housing-related government sponsored enterprises (GSE). These entities are the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board. According to the Congressional Budget Office, the housing-related GSEs received 13.6 billion worth of indirect Federal subsidies in Fiscal Year 2000 alone. One of the major government privileges granted the GSE is a line of credit to the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion dollars. This explicit promise by the Treasury to bail out the GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a massive unconstitutional and immoral income transfer from working Americans to holders of GSE debt. The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase the debt of GSE. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetarize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors. The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if investors did not have reason to believe that Fannie and Freddie were underwritten by the Federal government then investors would demand Fannie and Freddie provided assurance they were following accepted management and accounting practices before investing in Fannie and Freddie. Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market This is because the special privileges of Fannie and Freddie have distorted the housing marketing by allowing Fannie, Freddie and the home loan bank board to attract capital they could not attract under pure market conditions. As a result, capitol is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans. Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing. Perhaps the Federal Reserve can stave off the day of reckoning by purchasing the GSE's debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts. No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that the government subsidies provided to the GSEs make investors underestimate the risk of investing in Fannie Mac and Freddie Mac. Mr. Speaker, it is time for Congress to act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market. I therefore hope my colleagues will stand up for American taxpayers and investors by cosponsoring the Free Housing Market Enhancement Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, earlier we heard some concern expressed for jobs leaving this country. If one is concerned about that, maybe it would be advantageous to listen to what I say, because I will try to give an explanation for exactly the reason why those jobs leave. My Special Order today is entitled ``Paper Money and Tyranny.'' Mr. Speaker, all great republics throughout history cherished sound money. This meant the monetary unit was a commodity of honest weight and purity. When money was sound, civilizations were found to be more prosperous and freedom thrived. The less free a society becomes, the greater the likelihood its money is being debased and the economic well-being of its citizens diminished. Alan Greenspan, years before he became Federal Reserve Board Chairman in charge of flagrantly debasing the U.S. dollar, wrote about this connection between sound money, prosperity and freedom. In his article ``Gold and Economic Freedom'' in 1966, Mr. Greenspan starts by saying, ``An almost hysterical antagonism toward the gold standard is an issue that unites status of all persuasions. They seem to sense that gold and economic freedom are inseparable.'' Further he states that under the gold standard, ``a free banking system stands as the protector of an economy's stability and balanced growth.'' Astoundingly, Mr. Greenspan's analysis of the 1929 market crash and how the Fed precipitated the crisis directly parallels current conditions we are experiencing under his management of the Fed. Greenspan explains, ``The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom, and by 1929 the speculative imbalances had become overwhelming and unmanageable by the Fed.'' Greenspan concluded his article by stating, ``In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.'' He explains that the ``shabby secret of the proponents of big government and paper money is that deficit spending is simply nothing more than a scheme for the hidden confiscation of wealth.'' Yet here we are today with a purely fiat monetary system managed almost exclusively by Mr. Greenspan who once so correctly denounced the Fed's role in the Depression while recognizing the need for sound money. The founders of this country and a large majority of the American people up until the 1930s disdained paper money, respected commodity money and disapproved of the Central Bank's monopoly control of money creation and interest rates. Ironically, it was the abuse of the gold standard, the Fed's credit-creating habits of the 1920s and its subsequent mischief in the 1930s, that not only gave us the Great Depression, but also prolonged it. Yet sound money was blamed for all the suffering. That is why people hardly objected when Roosevelt and his status friends confiscated gold and radically debased the currency, ushering in the age of worldwide fiat currencies with which the international community struggles today. If honest money and freedom are inseparable, as Mr. Greenspan argues, and paper money leads to tyranny, one must wonder why it is so popular with the economists, the business community, bankers and our government officials. The simplest explanation is that it is a human trait to always seek the comforts of wealth with the least amount of effort. This desire is quite positive when it inspires hard work and innovation in a capitalist society. Productivity is improved and the standard of living goes up for everyone. This process has permitted the poorest in today's capitalist countries to enjoy luxuries never available to the royalty of old. But this human trait of seeking wealth and comfort with the least amount of effort is often abused. It leads some to believe that by certain monetary manipulations, wealth can be made more available to everyone. Those who believe in fiat money often believe wealth can be created without a commensurate amount of hard work and innovation. They also come to believe that savings and market control of interest rates are not only unnecessary, but actually hinder a productive, growing economy. Concern for liberty is replaced by the illusion that material benefits can be more easily obtained with fiat money than through hard work and ingenuity. The perceived benefits soon become of greater concern for society than the preservation of liberty. This does not mean proponents of fiat money embark on a crusade to promote tyranny, though that is what it leads to, but rather they hope that they have found the ``philosopher's stone'' and a modern alternative to the challenge of turning lead into gold. Our founders thoroughly understood this issue and warned us against the temptation to seek wealth and fortune without the work and savings that real prosperity requires. James Madison warned of ``the pestilent effects of paper money,'' as the founders had vivid memories the destructiveness of the continental dollar. George Mason of Virginia said that he had a ``mortal hatred of paper money.'' Constitutional Convention delegate Oliver Elseworth from Connecticut thought the convention ``a favorable moment to shut and bar the door against paper money.'' This view of the evils of paper money was shared by almost all of the delegates to the convention and was the reason the Constitution limited congressional authority to deal with the issue and mandate that only gold and silver could be legal tender. Paper money was prohibited, and no central bank was authorized. Over and above the economic reasons for honest money, however, Madison argued the moral case for such. Paper money, he explained, destroyed ``the necessary confidence between man and man and necessary confidence in public councils on the industry and morals of people and on the character of republican government.'' The founders were well aware of the Biblical admonitions against dishonest weights and measures, debased silver and watered-down wine. The issue of sound money throughout history has been as much a moral issue as an economic or political one. Even with this history and great concern expressed by the founders, the barriers to paper money have been torn asunder. The Constitution has not been changed, but it is no longer applied to the issue of money. It was once explained to me during the debate over going to war in Iraq that a declaration of war was not needed because to ask for such a declaration was frivolous and that the portion of the Constitution dealing with congressional war power was anachronistic. So, too, it seems that the power over money given to Congress alone and limited to coinage and honest weights is now also anachronistic. If indeed our generation can make the case for paper money issued by an unauthorized central bank, it behooves us to at least have enough respect for the Constitution to amend it in a proper fashion. Ignoring the Constitution in order to perform a pernicious act is detrimental in two ways. First, debasing the currency as a deliberate policy is economically destructive beyond measure. Second, doing it without consideration for the rule of law undermines the entire fabric of our constitutional republic. Though the need for sound money is currently not a pressing issue for Congress, it is something that cannot be ignored because serious economic problems resulting from our paper money system are being forced upon us. As a matter of fact, we deal with the consequences on a daily basis, yet fail to see the connection between our economic problems and the mischief orchestrated by the Federal Reserve. All the great religions teach honesty in money, and the economic shortcomings of paper money were well known when the Constitution was written. So we must try to understand why an entire generation of Americans have come to accept paper money without hesitation, without question. Most Americans are oblivious to the entire issue of the nature and importance of money. Many in authority, however, have either been misled by false notions or see that the power to create money is indeed a power they enjoy as they promote their agenda of welfarism at home and empire abroad. Money is a moral, economic and political issue. Since the monetary unit measures every economic transaction from wages to prices, taxes and interest rates, it is vitally important that its value is honestly established in the marketplace without bankers, government politicians, or the Federal Reserve manipulating its value to serve the special interest. The moral issue regarding money should be the easiest to understand, but almost no one in Washington thinks of money in these terms. Although there is a growing and deserved distrust in government per se, trust in money and the Federal Reserve's ability to manage it remain strong. No one would welcome a counterfeiter to town, yet this same authority is blindly given to the central bank without any serious oversight by the Congress. When the government can replicate the monetary unit at will, without regard to cost, whether it is a paper currency or a computer entry, it is morally identical to the counterfeiter who illegally prints currency. Both ways it is fraud. A fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money and to those who get to use the credit or money early in its circulation. The insidious and eventual costs falls on unidentified victims who are usually oblivious to the cause of their plight. This system of legalized plunder allows one group to benefit at the expense of another. An actual transfer of wealth goes from the poor and middle class to those in privileged financial position. In many societies, the middle class has actually been wiped out by monetary inflation, which always accompanies fiat money. The high cost of living and loss of jobs hits one segment of society, while in the early stages of inflation the business class actually benefits from the easy credit. An astute stock investor or home builder can make millions in the boom phase of the business cycle, while the poor and those dependent on fixed incomes cannot keep up with the rising cost of living. Fiat money is also immoral because it allows government to finance special interest legislation that otherwise would have to be paid for by direct taxation or by productive enterprise. This transfer of wealth occurs without directly taking the money out of someone's pocket. Every dollar created dilutes the value of existing dollars in circulation. Those individuals who worked hard, paid their taxes, and saved some money for a rainy day are hit the hardest with their dollars being depreciated in value while earning interest that is kept artificially low by the Federal Reserve's easy credit system. The easy credit helps investors and consumers who have no qualms about going into debt and even declaring bankruptcy. If someone sees the welfare state and foreign militarism as improper and immoral, one understands how the license to print money permits these policies to go forward far more easily than if they had to be paid for immediately by direct taxation. Printing money, which is literally inflation, is nothing more than a sinister and evil form of hidden taxation. It is unfair and deceptive, and, accordingly, strongly opposed by the authors of the Constitution. That is why there is no authority for Congress, the Federal Reserve, or the executive branch to operate the current system of money we have today. Although the money issued today is of little practical interest to the parties and the politicians, it should not be ignored. Policymakers must contend with the consequence of the business cycle which result from the fiat monetary system under which we operate. They may not understand the connection now but eventually they must. In the past, money and gold have been dominant issues in several major political campaigns. We find that when the people have had a voice in the matter, they inevitably choose gold over paper. To the common man it just makes sense. As a matter of fact, a large number of Americans, perhaps a majority, still believe our dollar is backed by gold at Fort Knox. The monetary issue, along with the desire to have free trade among the States, prompted those at the Constitutional Convention to seek solutions to problems that plagued the post-revolutionary war economy. The postwar recession was greatly aggravated by the collapse of the unsound fiat continental dollar. The people, through their representatives, spoke loudly and clearly for gold and silver over paper. Andrew Jackson, a strong proponent of gold and opponent of central banking, he opposed the second bank in the United States, was a hero to the working class and was twice elected President. This issue was fully debated in his Presidential campaigns. The people voted for gold over paper. In the 1870s, the people once again spoke out clearly against the greenback inflation of Lincoln. Notoriously, governments go to paper money while rejecting gold to promote unpopular and unaffordable wars. The return to gold in 1879 went smoothly and was welcomed by the people, putting behind them the disastrous Civil War inflationary period. Grover Cleveland, elected twice to the Presidency, was also a strong advocate of the gold standard. Again in the Presidential race of 1896, William McKinley argued the case for gold. In spite of the great orations by William Jennings Bryant who supported monetary inflation and made a mocking cross-of-gold speech, the people rallied behind McKinley's bland but correct argument for sound money. The 20th century was much less sympathetic to gold. Since 1913, central banking has been accepted in the United States without much debate, despite the many economic and political horrors caused by or worsened by the Federal Reserve since its establishment. The ups and downs of the economy have all come as a consequence of Fed policies, from the Great Depression to the horrendous stagflation of the 1970s, as well as the current ongoing economic crisis. A central bank in fiat money enables government to maintain an easy war policy that under strict monetary rules would not be achievable. In other words, countries with sound monetary policies would rarely go to war because they could not afford to, especially if they were not attacked. The people could not be taxed enough to support wars without destroying the economy. But by printing money, the costs can be delayed and hidden, sometimes for years if not decades. To be truly opposed to preemptive and unnecessary wars, one must advocate sound money to prevent the promoters of war from financing their imperialism. Look at how the military budget is exploding, deficits are exploding, and tax revenues are going down. No problem. The Fed is there and will print whatever is needed to meet our military commitments, whether it is wise to do so or not. Money issues should indeed be a gigantic political issue. Fiat money hurts the economy, finances war, and allows for excessive welfarism. When these connections are realized and understood, it will once again become a major political issue, since paper money never lasts. Ultimately, politicians will not have a choice over whether or not to address or take a position on the money issue. The people and circumstances will demand it. We do hear some talk about monetary policy and criticism directed toward the Federal Reserve, but it falls far short of what I am talking about. Big spending welfarists constantly complain about Fed policy, usually demanding lower interest rates even when rates are at historic lows. Big government conservatives promote grand worldwide military operations while arguing that deficits do not matter as long as marginal tax rates are lowered and also constantly criticize the Fed for high interest rates and lack of liquidity. Coming from both the left and the right, these demands would not occur if money could not be created out of thin air at will. Both sides are asking for the same thing from the Fed, for different reasons. They want the printing presses to run faster and create more credit so that the economy will be healed like magic, or so they believe. This is not the kind of interest in the Fed that we need. I am anticipating that we should, and one day will, be forced to deal with the definition of the dollar and what money should consist of. The current superficial discussion about money merely shows a desire to tinker with the current system in hopes of improving the deteriorating economy. There will be a point, though, when the tinkering will no longer be of any benefit, and even the best advice will be of little value. We have just gone through a 2\1/2\ year period of tinkering with 13 interest rate cuts and recovery has not yet been achieved. It is just possible that we are much closer than anyone realizes to that day when it will become absolutely necessary to deal with the monetary issue both philosophically and strategically and forget about the Band-Aid approach to the current system. For a time, the economic consequences of paper money may seem benign and even helpful but are always disruptive to economic growth and prosperity. Economic planners of the Keynesian socialist types have always relished control over money creation in their effort to regulate and plan the economy. They have no qualms with using their power to pursue their egalitarian dreams of wealth redistribution. That force and fraud are used to make the economic system supposedly fairer is of little concern to them. There are also many conservatives who do not endorse central economic planning as those on the left do, but nevertheless concede this authority to the Federal Reserve to manipulate the economy through monetary policy. Only a small group of constitutionalists, libertarians, and Austrian free market economists reject the notion that central planning through interest rate and money supply manipulation is a productive endeavor. Many sincere politicians, bureaucrats, and bankers endorse the current system, not out of malice or greed but because it is the only system they have ever heard of. The principles of sound money and free market banking are not taught in our universities anymore. The overwhelming consensus in Washington as well as around the world is that commodity money without a central bank is no longer practical or necessary. Be assured, though, that certain individuals who greatly benefit from a paper money system know exactly why the restraints that a commodity standard would have are unacceptable. Though the economic consequences of paper money in the early stage affect lower-income and middle-class citizens, history shows that when the destruction of monetary value becomes rampant, nearly everyone suffers and the economic structure becomes unstable. There is good reason for all of us to be concerned about our monetary system and the future of the dollar. Nations that live beyond their means must always pay for their extravagance. It is easy to understand why future generations inherit a burden when the national debt piles up. This requires others to pay the interest and debts when they come due. The victims are never the recipients of the borrowed funds. But this is not exactly what happens when a country pays off its debt. The debt in nominal terms always goes up. And since it is still accepted by mainstream economists that just borrowing endlessly is not the road to permanent prosperity, real debt must be reduced. Depreciating the value of the dollar does that. If the dollar loses 10 percent of its value, the national debt of $6.5 trillion is reduced in real terms by $650 billion. That is a pretty neat trick and quite helpful to the government. That is why the Fed screams about a coming deflation, so it can continue the devaluation of the dollar unabated. The politicians do not mind, the bankers welcome the business activity, and the recipients of the funds passed out by Congress never complain. The greater the debt, the greater the need to inflate the currency since the debt cannot be the source of long-term wealth. Individuals and corporations who borrow too much eventually must cut back and pay off their debt and start anew, but governments never do. Where is the hitch? This process which seems to be a creative way of paying off debt eventually undermines the capital structure of the economy, thus making it difficult to produce wealth, and that is when the whole process comes to an end. This system causes many economic problems, but most of them stem from the Fed's interference with the market rate of interest that it achieves through credit creation and printing money. Nearly 100 years ago, Austrian economist Ludwig Von Mises explained and predicted the failure of socialism. Without a pricing mechanism, the delicate balance between consumers and producers would be destroyed. Freely fluctuating prices provide vital information to the entrepreneur who is making key decisions on production. Without this accurate information, major mistakes are made. A central planning bureaucrat cannot be a substitute for the law of supply and demand. Though generally accepted by most modern economists and politicians, there is little hesitancy in accepting the omnipotent wisdom of the Federal Reserve to know the price of money and the interest rate and its proper supply. For decades, and especially during the 1990s when Chairman Greenspan was held in such high esteem and no one dared question his judgment or the wisdom of the system, this process was allowed to run unimpeded by political or market restraints. Just as we must eventually pay for our perpetual deficits, continuous manipulation of interest and credit will also extract a payment. Artificially low interest rates deceive investors into believing that rates are low because savings are high and represent funds not spent on consumption. When the Fed creates bank deposits out of thin air, making loans available at below-market rates now, investment and overcapacity results, setting the stage for the next recession or depression. The easy credit policy is welcomed by many stock market investors, home builders, home buyers, congressional spendthrifts, bankers and many consumers who enjoy borrowing at low rates and not worrying about repayment. However, perpetual good times cannot come from a printing press or easy credit created by a Federal Reserve computer. The piper will demand payment and the downturn in the business cycle will see to it. The downturn is locked into place by the artificial boom that everyone enjoys, despite the dreams that we have ushered in a ``new economic era.'' Let there be no doubt, the business cycle, the stagflation, the recessions, the depressions and the inflations are not a result of capitalism and sound money but rather are a direct result of paper money and a central bank that is incapable of managing it. Our current monetary system makes it tempting for all parties, individuals, corporations and government to go into debt. It encourages consumption over investment and production. Incentives to save are diminished by the Fed's making new credit available to everyone and keeping interest rates on savings so low that few find it advisable to save for a rainy day. This is made worse by taxing interest earned on savings. It plays havoc with those who do save and want to live off their interest. The artificial rates may be 4 or 5 or even 6 percent below the market rate and the savers, many of whom are elderly and on fixed incomes, suffer unfairly at the hands of Alan Greenspan who believes that resorting to money creation will solve our problems and give us perpetual prosperity. Lowering interest rates at times, especially in the early stages of monetary debasement, will produce the desired effect and stimulate another boom-bust cycle, but eventually the distortions and imbalances between consumption and production and excessive debt prevent the monetary stimulus from doing very much to boost the economy. Just look at what has been happening to Japan for the last 12 years. When conditions get bad enough, the only recourse will be to have major monetary reform to restore confidence in the system. The two conditions that result from fiat money that are more likely to concern the people are inflation of prices and unemployment. Unfortunately, few realize these problems are directly related to our monetary system. Instead of demanding reforms, the chorus from both the right and the left is for the Fed to do more of the same, only faster. If our problems stem from easy credit and interest rate manipulation by the Fed, demanding more will not do much to help. Sadly, it will only make our problems worse. Ironically, the more successful the money managers are at restoring growth or prolonging the boom with their monetary machinations, the greater are the distortions and imbalances in the economy. This means that when corrections are eventually forced upon us, they are much more painful and more people suffer with the correction lasting longer. Today's economic conditions reflect a fiat monetary system held together by many tricks and luck over the past 30 years. The world has been awash in paper money since removal of the last vestige of the gold standard by Richard Nixon when he buried the Bretton Woods agreement, the gold exchange standard, on August 15, 1971. Since then, we have been on a worldwide paper dollar standard. Quite possibly we are seeing the beginning of the end of that system. If so, tough times are ahead for the United States and the world economy. A paper monetary standard means there are no restraints on the printing press or on Federal deficits. In 1971, M3 was $776 billion. Today, it stands at $8.9 trillion, an 1100 percent increase. Our national debt in 1971 was $408 billion. Today it stands at $6.8 trillion, a 1600 percent increase. Since that time, our dollar has lost almost 80 percent of its purchasing power. Common sense tells us that this process is not sustainable and something has to give. So far, no one in Washington seems interested. Although dollar creation is ultimately the key to its value, many other factors play a part in its perceived value, such as the strength of our economy, our political stability, our military power, the benefits of the dollar being the key reserve currency of the world and the relative weakness of other nations' economies and their currencies. For these reasons, the dollar has enjoyed a special place in the world economy. Increases in productivity have also helped to bestow undeserved trust in our currency with consumer prices being held in check and fooling the people at the urging of the Fed that inflation is not a problem. Trust is an important factor in how the dollar is perceived. Sound money encourages trust, but trust can come from these other sources as well. But when that trust is lost, which always occurs with paper money, the delayed adjustments can hit with a vengeance. Following the breakdown of the Bretton Woods agreement, the world essentially accepted the dollar as a replacement for gold, to be held in reserve upon which even more monetary expansion could occur. It was a great arrangement that up until now seemed to make everyone happy. We own the printing press and create as many dollars as we please. These dollars are used to buy Federal debt. This allows our debt to be monetized and the spendthrift Congress, of course, finds this a delightful convenience and never complains. As the dollars circulate through our fractional banking system, they expand many times over. With our excess dollars at home, our trading partners are only too happy to accept these dollars in order to sell us their product. Because our dollar is relatively strong compared to other currencies, we can buy foreign products at a discounted price. In other words, we get to create the world's reserve currency at no cost, spend it overseas and receive manufactured goods in return. Our excess dollars go abroad and other countries, especially Japan and China, are only too happy to loan them right back to us by buying our government and GSE debt. Up until now, both sides have been happy with this arrangement. But all good things must come to an end, and this arrangement is ending. This process puts us into a position of being a huge debtor nation, with our current account deficit of more than $600 billion a year now exceeding 5 percent of our GDP. We now owe foreigners more than any other nation ever owed in history, over $3 trillion. A debt of this sort always ends by the currency of the debtor nation decreasing in value, and that is what has started to happen with the dollar. Although it has still a long way to go, our free lunch cannot last. Printing money, buying foreign products and selling foreign holders of dollars our debt ends when the foreign holders of this debt become concerned about the value of the dollar. Once this process starts, interest rates will rise, and in recent weeks, despite the frenetic effort of the Fed to keep interest rates low, they are actually rising. The official explanation is that this is due to an economic rebound with an increase in demands for loans. Yet a decrease in demand for our debt in reluctance to hold our dollars is a more likely cause. Only time will tell whether the economy rebounds to any significant degree, but one must be aware that rising interest rates and serious price inflation can also reflect a weak dollar and a weak economy. The stagflation of the 1970s baffled many conventional economists but not the Austrian economists. Many other countries have in the past have suffered from the extremes of inflation in an inflationary depression, and we are not immune from that happening here. Our monetary and fiscal policies are actually conducive to such a scenario. In the short run, the current system gives us a free ride. Our paper buys cheap foods from overseas, and foreigners risk all by financing our extravagance. But in the long run, we will surely pay for living beyond our means. Debt will be paid for one way or another. An inflated currency always comes back to haunt those who enjoyed the benefits of inflation. Although this process is extremely dangerous, many economists and politicians do not see it as a currency problem and are only too willing to find a villain to attack. Surprisingly, the villain is often the foreigner who foolishly takes our paper for useful goods and accommodates us by loaning the proceeds back to us. It is true that the system encourages exportation of jobs as we buy more and more foreign goods, but nobody understands the Fed's role in this. So the cries go out to punish the competition with tariffs. Protectionism is a predictable consequence of paper money inflation, just as is the impoverishment of the entire middle class. It should surprise no one that even in the boom phase of the 1990s, there were still many people who became poorer. Yet all we hear are calls for more government mischief to correct the problems with tariffs, increased welfare for the poor, increased unemployment benefits, deficit spending, and special interest tax reduction, none of which can solve the problems ingrained in a system that operates with paper money and a central bank. If inflation were equitable and treated all classes the same, it would be less socially divisive, but while some see their incomes going up above the rate of inflation like movie stars, CEOs, stock brokers, speculators, professional athletes, others see their income stagnate like lower-middle-income workers, retired people and farmers. Likewise, the rise in the cost of living hurts the poor and middle class more than the wealthy. Because inflation treats certain groups unfairly, anger and envy are directed towards those who have benefited. The long-term philosophic problem with this is that the central bank and fiat monetary system are never blamed. Instead, free market capitalism is. This is what happened in the 1930s. The Keynesians, who grew to dominate economic thinking at that time, erroneously blamed the gold standard, balanced budget and capitalism, instead of tax increases, tariffs and Fed policy. This country cannot afford another attack on economic liberty, similar to what followed the 1929 crash that ushered in the economic interventionism and inflationism with which we have been saddled with ever since. These policies have brought us to the brink of another colossal economic downturn, and we need to be prepared. Big business and banking deserve our harsh criticism, but not because they are big or because they are rich. Our criticism should come because of the special benefits they receive from a monetary system designed to assist the business class at the expense of the working class. Labor leader Samuel Gompers understood this and feared paper money and a central bank while arguing the case for gold. Since the monetary system is used to finance deficits that come from war expenditures, the military industrial complex, as one would expect, is a strong supporter of the current monetary system. Liberals foolishly believe that they can control the process and curtail the benefits going to corporations and banks by increasing spending for the welfare of the poor, but this never happens. Powerful financial special interests control the government spending process and throw only crumbs to the poor. The fallacy with this approach is that the advocates fail to see the harm done to the poor with cost-of-living increases and job losses that are a natural consequence of monetary debasement. Therefore, even more liberal control over the spending process can never compensate for the great harm done to the economy and the poor by the Federal Reserve's effort to manage an unmanageable fiat monetary system. Economic intervention financed by inflation is high-stakes government. It provides the incentive for the big money to invest in gaining government control. The big money comes from those who have it, corporation and banking interests. That is why literally billions of dollars are spent on elections and lobbying. The only way to restore equity is to change the primary function of government from economic planning and militarism to protecting liberty. Without money, the poor and the middle class are disenfranchised, since access, for the most part, requires money. Obviously, this is not a partisan issue since both major parties are controlled by wealthy special interests. Only the rhetoric is different. Our current economic problems are directly related to the monetary excesses of 3 decades and the more recent efforts by the Federal Reserve to thwart the correction that the market is forcing upon us. Since 1998, there has been a sustained attack on corporate profits. Before that, profits and earnings were inflated and fictitious, with WorldCom and Enron being prime examples. In spite of the 13 rate cuts since 2001, economic growth has not been restored. Paper money encourages speculation, excessive debts and misdirected investments. The market, however, always moves in the direction of eliminating bad investments, liquidating debt, and reducing speculative excesses. What we have seen, especially since the stock market peak of early 2000, is a knockdown-drag-out battle between the Fed's effort to avoid a recession, limit the recession, and stimulate growth with its only tool, money creation, while the market demands the elimination of bad investments and excessive debt. The Fed was also motivated to save the stock market from collapsing, which in some ways they have been able to do. The market, in contrast, will insist on liquidation of unsustainable debt, removal of investment mistakes made over several decades, and a dramatic reevaluation of the stock market. In this go-round, the Fed has pulled out all stops and is more determined than ever, yet the market is saying that new and healthy growth cannot occur until a major cleansing of the system occurs. Does anyone think that tariffs and interest rates of 1 percent will encourage the rebuilding of our steel and textile industries anytime soon? Obviously, something more is needed. The world central bankers are concerned with the lack of response to low interest rates, and they have joined in a concerted effort to rescue the world's economy through a policy of protecting the dollar's role in the world economy, denying that inflation exists and justifying unlimited expansion of the dollar money supply. To maintain confidence in the dollar, gold prices must be held in check. In the 1960s, our government did not want a vote of no confidence in the dollar, and for a couple of decades the price of gold was artificially held at $35 an ounce. That of course did not last. In recent years there has been a coordinated effort by the world central bankers to keep the price of gold in check by dumping part of their large hoard of gold into the market. This has worked to a degree, but just as it could not be sustained in the 1960s, until Nixon declared the Brenton Woods agreement dead in 1971, this effort will fail as well. The market price of gold is important because it reflects the ultimate confidence in the dollar. An artificially low price for gold contributes to false confidence. And when this is lost, more chaos ensues as the market adjusts for the delay. Monetary policy today is designed to demonetize gold and guarantee for the first time that paper can serve as an adequate substitute in the hands of wise central bankers. Trust, then, has to be transferred from gold to the politicians and bureaucrats who are in charge of our monetary system. This fails to recognize the obvious reason that market participants throughout history have always preferred to deal with real assets, real money rather than government paper. This contest between paper and honest money is of much greater significance than many realize. We should know the outcome of this struggle within the next decade. Alan Greenspan, although once a strong advocate for the gold standard, now believes he knows what the outcome of this battle will be. Is it just wishful thinking on his part? In answer to a question I asked him before the Committee on Financial Services in February of this year, Mr. Greenspan made an effort to convince me that paper money now works as well as gold when he responded, ``I have been quite surprised, and I must say pleased, by the fact that central banks have been able to effectively simulate many of the characteristics of the gold standard by constraining the degree of finance in a manner which effectively brought down the general price levels.'' Earlier, in December 2002, Mr. Greenspan spoke before the Economic Club of New York and addressed the same subject: ``The record of the past 20 years appears to underscore the observation that although pressures for excessive issuance of fiat money are chronic, a prudent monetary policy maintained over a protracted period of time can contain the forces of inflation.'' There are several problems with this optimistic assessment. First, efficient central bankers will never replace the invisible hand of a commodity monetary standard. Second, using government price indices to measure the success of a managed fiat currency should not be reassuring. These indices can be arbitrarily altered to imply a successful monetary policy. Also, price increases of consumer goods are not a litmus test for measuring the harm done by the money managers at the Fed. The development of overcapacity, excessive debt, and speculation still occur, even when prices happen to remain reasonably stable due to increases in productivity and technology. Chairman Greenspan makes his argument because he hopes he is right that sound money is no longer necessary and also because it is an excuse to keep the inflation of the money supply going for as long as possible, hoping a miracle will restore sound growth to the economy. But that is only a dream. We are now faced with an economy that is far from robust and may get a lot worse before rebounding. If not now, the time will soon come when the conventional wisdom of the last 90 years since the Fed was created will have to be challenged. If the conditions have changed and the routine of fiscal and monetary stimulation do not work, we better prepare ourselves for the aftermath of a failed dollar system, which will not be limited to the United States. An interesting headline appeared in The New York Times on July 31: ``Commodity Costs Soar But Factories Don't Bustle.'' What is observed here is a sea change in attitude by investors, shifting their investments, funds and speculation into things of real value and out of financial areas such as stocks and bonds. This shift shows that in spite of the most aggressive Fed policy in history in the past 3 years, the economy remains sluggish and interest rates are actually rising. What can the Feds do? If this trend continues, there is very little they can do. Not only do I believe this trend will continue; I believe it is likely to accelerate. This policy plays havoc with our economy, reduces revenues, prompts increases in Federal spending, increases in deficits and debt occur, and interest costs rise compounding our budgetary woes. The set of circumstances we face today is unique and quite different from all the other recessions the Federal Reserve has had to deal with. Generally, interest rates are raised to slow the economy and dampen price inflation. At the bottom of the cycle, interest rates are lowered to stimulate the economy. But this time around the recession came in spite of a huge significant interest rate reduction by the Fed. This aggressive policy did not prevent the recession, as was hoped. So far it has not produced the desired recovery. Now we are at the bottom of the cycle and interest rates not only cannot be lowered, they are rising. This is a unique and dangerous combination of events. This set of circumstances can only occur with fiat money and indicates that further manipulation of the money supply and interest rates by the Fed will have little effect at all. The odds are not very good that the Fed will adopt a policy of not inflating the money supply because of some very painful consequences that would occur. Also, there would be a need to remove the pressure on the Fed to accommodate the big spenders in Congress. Since there are essentially only two groups that have any influence on spending levels, Big Government liberals and Big Government conservatives, that is not about to happen. Poverty is going to worsen due to our monetary and fiscal policies, so spending on the war on poverty will accelerate. Our obsession with policing the world, nation-building, and preemptive war are not likely to soon go away since both Republican and Democrat leaders endorse them. Instead, the cost of defending the American empire is going to accelerate. A country that is getting poorer cannot pay these bills with higher taxation, nor can they find enough excess funds for the people to loan to the government. The only recourse is for the Federal Reserve to accommodate and monetize the Federal debt. And that, of course, is inflation. It is now admitted that the deficit is out of control, with next year's deficit reaching over $1 trillion, not counting the billions borrowed from the trust funds, like Social Security. I am sticking to my prediction that within a few years the national debt will increase over $1 trillion in one fiscal year. So far so good. No big market reactions, the dollar is holding its own, and the administration and congressional leaders are not alarmed. But they ought to be. I agree it would be politically tough to bite the bullet and deal with our extravagance, both fiscal and monetary, but the repercussions here at home from a loss of confidence in the dollar throughout the world will not be a pretty sight to behold. I do not see any way we are going to avoid the crisis. We do have some options to minimize the suffering. If we decided to, we could permit some alternatives to the current system of money and banking we have today. Already we took a major step in this direction. Gold was illegal to own between 1933 and 1976. Today, millions of Americans do own gold. Gold contracts are legal, but a settlement of any dispute is always in Federal Reserve notes. This makes gold contracts of limited value. For gold to be an alternative to Federal Reserve notes, taxes on any transaction in gold must be removed, both sales and capital gains. Holding gold should be permitted in any pension fund, just as dollars are permitted in a collecting account of these funds. Important point. Repeal of all legal tender laws is a must. Sound money never requires the force of legal tender laws. Only paper money requires such laws. These proposals, even if put in place tomorrow, would not solve the problems we face. It would, though, legalize freedom of choice in money. And many who worry about having their savings wiped out by a depreciating dollar would at least have another option. This option would ease some of the difficulties that are surely to come from run- away deficits in a weakened economy with skyrocketing inflation. Curbing the scope of government and limiting its size to that prescribed in the Constitution is the goal that we should seek, but political reality makes this option available to us only after a national bankruptcy has occurred. We need not face that catastrophe. What we need is to strictly limit the power of government to meddle in our economy and our personal affairs and stay out of the internal affairs of other nations. It is no coincidence that during the period following the establishment of the Federal Reserve and the elimination of the gold standard a huge growth in the size of the Federal Government and its debt occurred. Believers in Big Government, whether or not on the left or right, vociferously reject the constraints on government growth that gold demands. Liberty is virtually impossible to protect when the people allow their governments to print money at will. Inevitably, the left will demand more economic interventionism, the right more militarism and empire building. Both sides, either inadvertently or deliberately will foster corporatism, those whose greatest interest in liberty and self- reliance are lost in the shuffle. Those left and right have different goals and serve different special interest groups are only too willing to compromise and support each other's programs. If unchecked, the economic and political chaos that comes from currency destruction inevitably leads to tyranny, a consequence of which the founders were very much aware. For 90 years we have lived with the Central Bank, with the last 32 years absent of any restraint on money creation. The longer the process lasts, the faster the printing presses have to run in an effort to maintain stability. They are currently running at record rates. It was predictable and is understandable that our national debt is now expanding at a record rate. The panicky effort of the Fed to stimulate economic growth does produce what is considered favorable economic reports, recently citing a second quarter growth this year at 3.1 percent. But in the footnotes we find that military spending, almost all of which went overseas, was up an astounding 46 percent. This, of course, represents deficit spending financed by the Federal Reserve's printing press, in the same quarter, after tax corporate profits fell 3.4 percent. This is hardly a reassuring report on the health of our economy, and merely reflects the bankruptcy of our current economic policy. Real economic growth will not return until confidence in the entire system is restored. That is impossible as long as it depends on the politicians not spending too much money and the Federal Reserve limiting its propensity to inflate our way to prosperity. Only sound money and limited government can do that.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise to introduce a resolution expressing the sense of the Congress that while we encourage a regional West African effort to resolve the Liberia crisis, the United States military has no role--either alone or as part of a multinational force--in that country. We all recognize the tragedy in Liberia. A civil war has raged there for the past 14 years, leaving thousands dead and a million without homes. Horrific stories of atrocities abound. We wish for peace and a resolution to the conflict. But we must recognize that this resolution should come through regional West African efforts. These are the countries involved and affected; these are the countries with the most incentive to resolve the problem. Simply stated, there is no U.S. national security interest at stake in the conflict--no matter how widely ``national interest'' is defined. But the administration is currently pondering repeated calls by some in the U.S. and especially the United Nations to commit thousands of troops to a full-fledged American operation in Liberia. According to press reports, the Pentagon has just ordered about 4,500 sailors and marines from the Horn of Africa into the Mediterranean Sea, so as to be closer to Liberia--just in case. Before we commit our troops to yet another foreign intervention, Congress must at the very least consider the implications of further committing our already seriously overextended military. According to recent press reporting, of the 33 brigades that make up the entirety of the U.S. Army's active duty combat forces, all but just three brigades are either currently engaged in Iraq, Afghanistan, South Korea, are committed to other missions, or are reconstituting. This suggests that the U.S. military is in serious danger of becoming over-extended. Mr. Speaker, there is no U.S. interest in the conflict and U.S. military involvement could well lead to resentment and more violence against U.S. troops, as we saw in Somalia. We must ponder this possibility before yet again putting our men and women in uniform in harm's way. I hope very much that my colleagues will join me in this effort and that we may see a quick Floor vote on this very important measure.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, I rise in support of the rule, but I also strongly support the bill itself, H.R. 2427. And I would like to advise other Members here that I approach all legislation the same way. I look at it through two prisms. One, I look to see if it promotes freedom, and the other I look to see if it conforms to the Constitution. Every piece of legislation I look at it in this manner. Now, the sad part is I do not get to vote for many bills. They come up short on quite a few occasions. So I want to thank the gentleman from Minnesota (Mr. Gutknecht) and the gentlewoman from Missouri (Mrs. Emerson) for giving us a bill tonight that I can vote for enthusiastically. I finally found one, and I thank them very much. But in looking at the particular bill, one of the specific reasons why I oppose it, is I came to Congress opposing all welfare. Some people oppose welfare for the poor, but they support welfare for the rich. Others support welfare for the rich, but not for the poor; and some people support both kinds of welfare. I do not support any kind of welfare. This bill is needed to stop the indirect welfare through regulation for the rich and the pharmaceutical corporations. This is corporate welfare. That is one of the strong reasons why I am opposed to that. I also believe in freedom of choice. People have the right to make their own choices. We do not need to promote the nanny state. People are wise enough and cautious enough to make their own choices. Today we had two votes on free trade legislation. They were promoting international trade agreements, but done in the name of free trade. Why do we have free trade legislation, so-called? To lower tariffs, to lower prices to the consumer. But those very same people who worked so hard on free trade legislation are saying now we cannot allow the American people the option of buying drugs from other countries and saving money. I urge all my colleagues to support H.R. 2427. Mr. Speaker, I am pleased to be an original cosponsor of H.R. 2427, the Pharmaceutical Market Access Act, because I believe it is an important bill that will benefit all Americans. As my colleagues are aware, many Americans are concerned about the high cost of prescription drugs. These high prices particularly affect senior citizens who have a greater than average need for prescription drugs and a lower than average income. Of course, some of these seniors may soon have at least part of their prescription drug costs covered by Medicare. However, the fact that Medicare, that is already on shaky financial ground, will soon be subsidizing prescription drug costs makes it more important than ever that Congress address the issue of prescription drug costs. Of course, Congress's actions should respect our constitutional limits and not further expand the role of government in the health care market. Fortunately, there are a number of market-oriented policies Congress can adopt to lower the prices of prescription drugs. This is because the main reason prescription drug prices are high is government policies, that give a few powerful companies monopoly power. For example, policies restricting the importation of quality pharmaceuticals enable pharmaceutical companies to charge above-market prices for their products. Therefore, all members of Congress who are serious about lowering prescription drug prices should support H.R. 2427. Opponents of this bill have waged a hysterical campaign to convince members that this amendment will result in consumers purchasing unsafe products. Acceptance of this argument not only requires ignoring H.R. 2427's numerous provisions ensuring the safety of imported drugs, it also requires assuming that consumers will buy cheap pharmaceuticals without taking any efforts to ensure that they are buying quality products. The experience of my constituents who are currently traveling to foreign countries to purchase prescription drugs shows that consumers are quite capable of purchasing safe products without interference from Big ``Mother.'' Furthermore, if the supporters of the status quo were truly concerned about promoting health, instead of protecting the special privileges of powerful companies, they would be more concerned with reforming the current policies that endanger health by artificially raising the cost of prescription drugs. Oftentimes, lower income Americans will take less of a prescription medicine than necessary to save money. Some even forgo other necessities, including food, in order to afford their medications. By reducing the prices of pharmaceuticals, H.R. 2427 will help ensure that no child has to take less than the recommended dosage of a prescription medicine and that no American has to choose between medication and food. Other opponents of this bill have charged that creating a free market in pharmaceuticals will impose Canadian style price controls on prescription drugs. This is nonsense. Nothing in H.R. 2427 gives the government any additional power to determine pharmaceutical prices. H.R. 2427 simply lowers trade barriers, thus taking a step toward ensuring that Americans pay a true market price for prescription drugs. This market price will likely be lower than the current price because current government policies raise the price of prescription drugs above what it would be in the market. Today, Americans enjoy access to many imported goods which are subject to price controls, and even receive government subsidies, in their countries of origin. Interestingly, some people support liberalized trade with Communist China, which is hardly a free economy, while opposing H.R. 2427! American policy has always been based on the principle that our economy is strengthened by free trade even when our trading partners engage in such market distorting policies as price controls and industrial subsidies. There is no good reason why pharmaceuticals should be an exception to the rule. Finally, Mr. Speaker, I wish to express my disappointment with the numerous D.C.-based ``free-market'' organizations that are opposing this bill. Anyone following this debate could be excused for thinking they have entered into a Twilight Zone episode where ``libertarian'' policy wonks argue that the Federal Government must protect citizens from purchasing the pharmaceuticals of their choice, endorse protectionism, and argue that the Federal Government has a moral duty to fashion policies designed to protect the pharmaceutical companies' profit margins. I do not wish to speculate on the motivation behind this deviation from free-market principles among groups that normally uphold the principles of liberty. However, I do hope the vehemence with which these organizations are attacking this bill is motivated by sincere, if misguided, principle, and not by the large donations these organizations have received from the pharmaceutical industry. If the latter is the case, then these groups have discredited themselves by suggesting that their free-market principles can be compromised when it serves the interests of their corporate donors. In conclusion, Mr. Speaker, I once again urge my colleagues to show that they are serious about lowering the prices of prescription drugs and that they trust the people to do what is in their best interests by supporting H.R. 2427, the Pharmaceutical Market Access Act.