Ron Paul

Mr. PAUL

Mr. PAUL. Mr. Speaker, today we have the opportunity to vote to get out of the WTO. We joined the WTO in 1994 in a lame-duck session hurried up because it was fearful that the new Members would not capitulate and go along with joining the WTO. The WTO was voted by the House and the Senate as an agreement, and yet it is clearly a treaty. It involves 135 countries. It is a treaty. It has been illegally implemented, and we are now obligated to follow the rules of the WTO. This is the size of the agreement that we signed and voted on in 1994. Now, if that is not an entangling alliance, I do not know what could be. It is virtually impossible to go through this and understand exactly what we have agreed to. But this is it, and this is what we are voting on today. If my colleagues vote against the resolution, they are rubber stamping this. That is what they are doing. Some argue that, yes, indeed the WTO is not quite perfect. But we need it. We need the WTO to manage this trade. But at the same time, they have no options. We cannot change the WTO. This is our only opportunity to vote and dissent on what is happening. The people of this country are being galvanized in opposition to this. They never opposed GATT. GATT did not have the same authority as WTO. But now the WTO is being found to be very offensive to a lot of people around this country. It is said that the WTO has no control over our sovereignty. That is like saying the U.N. has no control of our sovereignty. Yet what body in the world directs our foreign policy? Where do we send troops around the world? Why do we put our troops under U.N. command? Where do we get authority to march into Kosovo and Somalia? From the United Nations. The WTO is the same. It is the same sort of thing. It is incrementalism. People say we can always oppose it. That is sort of like saying in 1913, The income tax is not all that bad; it is only 1 percent placed on the rich. We don't have to worry about it. But before we know it, it is out of control. There is incrementalism here to be concerned about. To the issue of whether or not we are obligated to follow the WTO rules, Congressional Research Service on August 25, 1999, did a study on the WTO. Their interpretation is this: ``As a member of the WTO, the United States does commit to act in accordance with the rules of the multilateral body. It is legally obligated to ensure national laws do not conflict with WTO rules.'' That is why we will be very soon changing our tax laws to go along with what the WTO tells us to do. In an article recently written by D. Augustino, he says: ``On June 5, WTO Director General Michael Moore emphasized the obedience to WTO rulings as not optional. Quote, the dispute settlement mechanism is unique in the international architecture. WTO member governments bind themselves to the outcome from panels and if necessary the appellate body. That is why the WTO has attracted so much attention from all sorts of groups who wish to use this mechanism to advance their interests.'' Indeed, this is a treaty that we are obligated to follow. It is an illegal treaty because it was never ratified by the Senate. Even if it had been, it is not legal because you cannot transfer authority to an outside body. It is the U.S. Congress that has the authority to regulate foreign commerce. Nobody else. We will change our tax law and obey the WTO. And just recently, the European Union has complained to us because we do not tax sales on the Internet, and they are going to the WTO to demand that we change that law; and if they win, we will have to change our law. The other side of the argument being, We don't have to do it. We don't have to do it if we don't want to. But then we are not a good member as we promised to be. Then what does the WTO do? They punish us with punitive sanctions, with tariffs. It is a managed trade war operated by the WTO and done in secrecy, without us having any say about it because it is out of our hands. It is a political event now. You have to have access to the U.S. Trade Representative for your case to be heard. This allows the big money, the big corporations to be heard and the little guy gets ignored. Mr. Speaker, I reserve the balance of my time.

Mr. PAUL. Mr. Speaker, I yield myself such time as I may consume. (Mr. PAUL asked and was given permission to revise and extend his remarks.)

Mr. PAUL. Mr. Speaker, I yield myself 30 seconds. Mr. Speaker, I would like to say to the gentleman from Texas that the giant meat packers may well be represented at the WTO, but the small rancher and farmer is not. The same people who promote this type of international managed trade where we lose control and it is delivered to an international bureaucracy are the same ones who fight hard to prevent us trading with Cuba and selling our products there. Essentially no one here advocating trade, as managed through the WTO, supports me in my efforts to open the Cuban markets to our farm products. There's a lot of talk regarding free trade and open markets but little action. The support by the WTO advocates is for international managed trade along with subsidies to their corporate allies. Mr. Speaker, I yield 4 minutes to the gentleman from California (Mr. Rohrabacher).

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise tonight to talk about a bill that is coming to the floor either tomorrow or the next day. It is H.J. Res. 90. This resolution, if it were to pass, would get us out of the World Trade Organization. There are many of us here in the House and many Americans who believe very sincerely that it is not in our best interests to belong to the World Trade Organization, who believe very sincerely that international managed trade, as carried on through the World Trade Organization, does not conform with our Constitution and does not serve our interests. It said by those who disagree with this so often in the media that those of us who disagree with the World Trade Organization that we are paranoid, we worry too much, and that there is no loss of sovereignty in this procedure. But quite frankly, there is strong evidence to present to show that not only do we lose sovereignty as we deliver this power to the World Trade Organization, that it indeed is not a legal agreement. It does not conform with our Constitution; and, therefore, we as Members of Congress should exert this privilege that we have every 5 years to think about the World Trade Organization, whether it is in our best interests and whether it is technically a good agreement. The World Trade Organization came into existence, and we joined it, in a lame duck session in 1994. It was hurried up in 1994 because of the concern that the new Members of Congress, who would have much more reflected the sentiments of the people, would oppose our membership in the WTO. So it went through in 1994; but in that bill, there was an agreement that a privileged resolution could come up to offer us this opportunity. Mr. Speaker, let me just point out the importance of whether or not this actually attacks our sovereignty. The CRS has done a study on the WTO, and they make a statement in this regard. This comes from a report from the Congressional Research Service on 8-25-99. It is very explicit. It says, as a member of the WTO, the United States does commit to act in accordance with the rules of the multilateral body. It is legally obligated to ensure national laws do not conflict with WTO rules. That is about as clear as one can get. Now, more recently, on June 5, the WTO director, General Michael Moore, made this statement and makes it very clear: the dispute settlement mechanism is unique in the international architecture. WTO member governments bind themselves to the outcome from panels and, if necessary, the appellate body. That is why the WTO has attracted so much attention from all sorts of groups who wish to use this mechanism to advance their interests. Interestingly enough, in the past, if we dealt with trade matters, they came to the U.S. Congress to change the law; they came to elected representatives to deal with this, and that is the way it should be under the Constitution. Today, though, the effort has to be directed through our world trade representative, our international trade representative, who then goes to bat for our business people at the WTO. So is it any surprise that, for instance, the company of Chiquita Banana, who has these trade wars going on in the trade fights, wants somebody in the administration to fight their battle, and just by coincidence, they have donated $1.5 million in their effort to get influence? So I think that the American people deserve a little bit more than this. The membership in the WTO actually is illegal, illegal any way we look at it. If we are delivering to the WTO the authority to regulate trade, we are violating the Constitution, because it is very clear that only Congress can do this. We cannot give that authority away. We cannot give it to the President, and we cannot give it to an international body that is going to manage trade in the WTO. This is not legal, it is not constitutional, and it is not in our best interests. It stirs up the interest to do things politically, and unelected bureaucrats make the decision, not elected officials. It was never intended to be that way, and yet we did this 5 years ago. We have become accustomed to it, and I think it is very important, it is not paranoia that makes some of us bring this up on the floor. Mr. Speaker, we will be discussing this either tomorrow or the next day. We will make a decision, and it is not up to the World Trade Organization to decide what labor laws we have or what kind of environmental laws we have, or what tax laws.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I rise today to pay tribute to the citizens of Round Top, Texas. The bark of the old cannon on the town square in Round Top, Texas, on July 4, 2000, will announce the city's famous Independence Day Parade. Each year, the small town of Round Top, deep in the heart of Fayette County in Texas' Congressional District 14, swells to accommodate a crowd of 8,000 Fourth of July visitors that come to celebrate our nation's freedom. In 1851, on the occasion of the 75th Anniversary of the Declaration of Independence of United States, Round Top celebrated its first Fourth of July. The celebration of this most important date in United States history continues to be the longest held observance of Independence Day west of the Mississippi. According to historical accounts, early stagecoach lines operating along the Old Bahia Road between Houston and Austin traveled near the center of today's town. When the drivers crossed Rocky Creek along the route and spotted the octagonal-shaped roof of the stage stand, they called out ``Round Top!'' Things are slow to change in Round Top. Its citizens appreciate their traditions and have adopted ordinances that are designed to project, enrich and promote the old historic landmarks for the enjoyment and edification of future generations. On the occasion of over 150 years of celebrations, I ask my colleagues to join me in congratulating the people of Round Top, Texas, who, on Independence Day, proudly proclaim, ``God Bless America!''

Mr. PAUL

Mr. PAUL. Mr. Chairman, I offer an amendment.

Mr. PAUL. Mr. Chairman, I yield myself such time as I may consume. (Mr. PAUL asked and was given permission to revise and extend his remarks.)

Mr. PAUL. Mr. Chairman, this amendment says that none of the funds in this appropriation can be used for implementing a uniform medical identifier. It is a privacy amendment. It was in the bill in 1998 and 1999. I think it would be a good idea to have it in this year's bill. This comes from authority granted in the Health Insurance Portability Act of 1996 and it was designed to establish a medical data bank. But because many, on both sides of the aisle, have objected to this invasion of privacy to set up a medical data bank, there has been some resistance to this. Although the removal of the authority would be the proper way to solve this problem once and for all, I think that it would be very appropriate to continue the policy of not permitting any Federal funding to be spent on developing this universal medical identifier, which by all indications would be our Social Security numbers. Many people object to this invasion of privacy. They do not place full trust in the U.S. Congress and in the U.S. Government to protect our privacy. Many say that this would not be an invasion of privacy and there would be some strict rules and regulations about how this medical information would be used, but that is not enough reassurance. As a physician, I can tell my colleagues that this form of invasion of our medical privacy will not serve us well in medical care. What it leads to is incomplete and inaccurate medical records, because it becomes known to the patient as well as the physician that once this information is accumulated that it might get in the hands of the politicians and used for reasons other than for medical care, I think, it could damage medical care endangered from having a medical data bank set up. The American people have spoken out strongly in recent years about their invasion of privacy. There was a proposal to implement a know- your-customer bank regulations. These were soundly rejected by the people, and I think that this same sentiment applies to the medical data bank. Also, efforts to establish a national identification card for the American people has not met with a great deal of acceptance with the American people. So my effort here in limiting this development of a universal medical identifier is to keep the Federal Government out of this business. It is too easy for abuse of this type of information to occur. We have heard that the various administrations over the years have abused records kept in the IRS as well as the FBI. This would just be another source of information that individuals could use in a negative fashion. I believe it is a fallacy for those who promote the setting up of a universal medical identifier and a universal medical data bank that it is an effort to simplify the process, to streamline the system, to make government more efficient, to facilitate medical research. It has also been said this could be used in law enforcement. But just think about this. If these records can be turned over without the approval of the patient to law enforcement, it really, quite clearly, is a violation of the fifth amendment of self-incrimination. So this idea that this medical bank might be beneficial for law enforcement is rather scary and something that we should prevent. Already, under authority that was given to Health and Human Services, they have started to draw up regulations which regulate privacy matters, not so much the medical data bank but in other areas. The other thing that concerns me a great deal is these medical regulations that have been proposed not only deal with the privacy of somebody that may be receiving medical care from Medicare but also in the private sector.

Mr. PAUL. I yield to the gentleman from Illinois.

Mr. PAUL. I yield to the gentleman from Wisconsin.

Mr. PAUL

Mr. PAUL. Mr. Speaker, yesterday morning the legislation which would have implemented ``permanent normal trade relations'' with the People's Republic of China was three pages in length. Today, it is 66 pages in length. Close examination of this bill ``gone bad'' is demonstrative of how this Congress misdefines ``free trade'' and how, like most everything else is in Washington, this ``free trade'' bill is a misnomer of significant proportions. For the past several years I have favored normal trade relations with the People's Republic of China. Because of certain misconceptions, I believe it is useful to begin with some detail as to what ``normal trade relations'' status is and what it is not. Previous ``normal trade relations'' votes meant only that U.S. tariffs imposed on Chinese goods will be no different than tariffs imposed on other countries for similar products--period. NTR status did not mean more U.S. taxpayers dollars sent to China. It did not signify more international family planning dollars sent overseas. NTR status does not mean automatic access to the World Bank, the World Trade Organization, OPIC, or any member of other ``foreign aid'' vehicles by which the U.S. Congress sends foreign aid to a large number of countries. Rather, NTR status was the lowering of a United States citizen's taxes paid on voluntary exchanges entered into by citizens who happen to reside in different countries. Of course, many of the critics of NTR status for China do not address the free trade and the necessarily negative economic consequences of their position. No one should question that individual rights are vital to liberty and that the communist government of China has an abysmal record in that department. At the same time, basic human rights must necessarily include the right to enter into voluntary exchanges with others. To burden the U.S. citizens who enter into voluntary exchanges with exorbitant taxes (tariffs) in the name of ``protecting'' the human rights of citizens of other countries would be internally inconsistent. Trade barriers when lowered, after all, benefit consumers who can purchase goods more cheaply than previously available. Those individuals choosing not to trade with citizens of particular foreign jurisdictions are not threatened by lowering barriers for those who do. Oftentimes, these critics focus instead on human rights deprivation by government leaders in China and see trade barriers as a means to ``reform'' these sometimes tyrannical leaders. However, according to Father Robert Sirco, a Paulist priest who discussed this topic in the Wall Street Journal, American missionaries in China favor NTR status and see this as the policy most likely to bring about positive change in China. But all of this said, this new 66 page ``free trade'' bill is not about free trade at all. It is about empowering and enriching international trade regulators and quasi-governmental entities on the backs of the U.S. taxpayer. Like NAFTA before us, this bill contains provisions which continue our country down the ugly path of internationally-engineered, ``managed trade'' rather than that of free trade. As explained by Ph.D. economist Murray N. Rothbard: ``[G]enuine free trade doesn't require a treaty (or its deformed cousin, a `trade agreement'; NAFTA was called an agreement so it can avoid the constitutional requirement of approval by two-thirds of the Senate). If the establishment truly wants free trade, all its has to do is to repeal our numerous tariffs, import quotas, anti-dumping laws, and other American-imposed restrictions of free trade. No foreign policy or foreign maneuvering is necessary.'' In truth, the bipartisan establishment's fanfare of ``free trade'' fosters the opposite of genuine freedom of exchange. Whereas genuine free traders examine free markets from the perspective of the consumer (each individual), the merchantilist examines trade from the perspective of the power elite; in other words, from the perspective of the big business in concert with big government. Genuine free traders consider exports a means of paying for imports, in the same way that goods in general are produced in order to be sold to consumers. But the mercantilists want to privilege the government business elite at the expense of all consumers, be they domestic or foreign. This new PNTR bill, rather than lowering government imposed barriers to trade, has become a legislative vehicle under which the United States can more quickly integrate and cartelize government in order to entrench the interventionist mixed economy. No Mr. Speaker and my colleagues, don't be fooled into thinking this bill is anything about free trade. In fact, those supporting it should be disgraced to learn that, among other misgivings, this bill, further undermines U.S. sovereignty by empowering the World Trade Organization on the backs of American taxpayers, sends federal employees to Beijing to become lobbyists to members of their communist government to become more WTO-friendly, funds the imposition of the questionable Universal Declaration of Human Rights upon foreign governments, and authorizes the spending of nearly $100 million to expand the reach of Radio Free Asia. Mr. Speaker, I say no to this taxpayer-financed fanfare of ``free trade'' which fosters the opposite of genuine freedom of exchange and urge by colleagues to do the same.

Mr. PAUL

Mr. PAUL. Mr. Speaker, this week there will be a lot of talk on the House floor about international trade. One side will talk about pseudo free trade, the other about fair trade. Unfortunately, true free trade will not be discussed. Both sides generally agree to subsidies and international management of trade. The pseudo free trader will not challenge the WTO's authority to force us to change our tax, labor, and environmental laws to conform to WTO rules, nor will they object to the WTO authorizing economic sanctions on us if we are slow in following WTO's directives. What is permitted is a low-level continuous trade war, not free trade. The current debate over Chinese trade status totally ignores a much bigger trade problem the world faces, an ocean of fluctuating fiat currencies. For the past decade, with sharp adjustments in currency values such as occurred during the Asian financial crisis, the dollar and the U.S. consumers benefitted. But these benefits will prove short-lived, since the unprecedented prosperity and consumption has been achieved with money that we borrow from abroad. Our trade imbalances and our skyrocketing current account deficit once again hit a new record in March. Our distinction as the world's greatest debtor remains unchallenged. But that will all end when foreign holders of dollars become disenchanted with financing our grand prosperity at their expense. One day, foreign holders of our dollars will realize that our chief export has been our inflation. The Federal Reserve believes that prosperity causes high prices and rising wages, thus causing it to declare war on a symptom of its own inflationary policy, deliberately forcing an economic slowdown, a sad and silly policy, indeed. The Fed also hopes that higher interest rates will curtail the burgeoning trade deficit and prevent the serious currency crisis that usually results from currency-induced trade imbalances. And of course, the Fed hopes to do all this without a recession or depression. That is a dream. Not only is the dollar due for a downturn, the Chinese currency is, as well. When these adjustments occur and recession sets in, with rising prices in consumer and producer goods, there will be those who will argue that it happened because of, or the lack thereof, of low tariffs and free trade with China. But instead, I suggest we look more carefully for the cause of the coming currency crisis. We should study the nature of all the world currencies and the mischief that fiat money causes, and resist the temptation to rely on the WTO, the IMF, the World Bank, pseudo free trade, to solve the problems that only serious currency reform can address.

Mr. PAUL

Mr. PAUL. Mr. Speaker, fiat money, that is, money created out of thin air, causes numerous problems internationally as well as domestically. It causes domestic price inflation, economic downturns, unemployment, excessive debt, corporate, personal and government, malinvestment and overcapacity, all very serious and poorly understood by many of our officials. But fluctuating values in various paper currencies cause all kinds of disruptions in international trade and finance as well. Trade surpluses and deficits when sound money conditions exist are of little concern, since they prompt changes in policy or price adjustments in a natural or smooth manner. When currencies are non-convertible into something of real value, they can be arbitrarily increased at will. Trade deficits, and especially current account deficits, are of much greater significance. When trade imbalances are not corrected, sudden devaluations, higher interest rates and domestic inflation are forced on the country that has most abused its monetary power. This was seen in 1997 in the Asian crisis, and precarious economic conditions continue in that region. Japan has yet to recover from its monetary inflation of the seventies and eighties and has now suffered with a lethargic economy for over a decade. Even after this length of time, there is no serious thought for currency reform in Japan or any other Asian country. Although international trade imbalances are a predictable result of fiat money, the duration and intensity of the cycles associated with it are not. A reserve currency, such as is the dollar, is treated by the market quite differently than another fiat currency. The issuer of a reserve currency, in this case, the United States, has greater latitude for inflating, and can tolerate a current account deficit for much longer periods of time than other countries not enjoying the same benefit. But economic law, although at times it may seem lax, is ruthless in always demanding that economic imbalances arising from abuse of economic principles be rectified. In spite of the benefits that reserve currency countries enjoy, financial bubbles still occur, and their prolongation, for whatever reason, only means the inevitable adjustment, when it comes, is much more harsh. Our current state of imbalance includes a huge U.S. foreign debt of $1.5 trillion, a record 20 percent of our GDP, and is a consequence of our continuously running a huge monthly current account deficit that shows no signs of soon abating. We are now the world's greatest debtor. The consequence of this deficit cannot be avoided. Our current account deficit has continued longer than many would have expected, but not knowing how long and to what extent deficits can go is not unusual. The precise event that starts the reversal in the trade balance is also unpredictable. The reversal itself is not. Japan's lethargy, the Asian crisis, the Mexican financial crisis, Europe's weakness and uncertainty surrounding the Euro, the demise of the Soviet system and the ineptness of the Russian bailout, all contributed to the continued strength in the dollar and prolongation of our current account deficit. This current account deficit, which prompts foreigners to loan back dollars to us and to invest in our stock and bond markets, has contributed significantly to the financial bubble. The perception that the United States is the economic and military powerhouse of the world helps perpetuate an illusion that the dollar is invincible and has encouraged our inflationary policies. By inflating our currency, we can then spend our dollars overseas, getting products at good prices which, on the short run, raises our standard of living, but on borrowed money. All currency account deficits must be financed by borrowing from abroad. It all ends when the world wakes up and realizes it has been had by the U.S. printing press. No country can expect to inflate its currency at will forever. Since cartels never work, OPEC does not deserve credit for getting oil prices above $30 per barrel. Demand for equivalent purchasing power for the sale of oil can. Recent commodity price and wage price increases signals accelerating price inflation is at hand. We are likely witnessing the early stages in a sea change regarding the dollar, inflation and the stock market, as well as commodity prices. The nervousness in the stock and bond markets, and especially in the NASDAQ, indicates that the Congress may soon be facing an entirely different set of financial numbers regarding spending, revenues, interest costs on our national debt and the value of the U.S. dollar. Price inflation of the conventional type will surely return, even if the economy slows. Fiscal policy and current monetary policy will not solve the crisis we will soon face. Only sound money, money that cannot be created out of thin air, can solve the many problems appearing on the horizon. The sooner we pay attention to monetary policy as the source of our international financial problems, the sooner we will come up with a sound solution.

Mr. PAUL

Mr. PAUL. Mr. Speaker, the national debt is rising at an annual rate of $100 billion per year while the Federal Government's obligation to future generations is rising even faster. Yet, little concern is shown here in Congress as our budgets grow and new programs are added on to old. Ordinary political deception has been replaced with the dangerous notion of invincibleness as Members claim credit for imaginary budgetary surpluses. The percent of our income that government now takes continues to rise while personal liberty is steadily compromised with each new budget. But the political euphoria associated with the ``New Era'' economy will soon come to an end. Although many have done well during the last 7 years of economic growth, many middle income families have had to struggle just to keep up. For them, inflation is not dead and the easy fortunes made on Wall Street are as far removed as winning the lottery. When the economy enters into recession, this sense of frustration will spread. Business cycles are well understood. They are not a natural consequence of capitalism, but instead result from central bank manipulation of credit. This is especially true when the monetary unit is undefinable, as it is in a fiat monetary system such as ours. Therefore, it is correct to blame the Federal Reserve for all depressions, recessions, inflations, and much of the unemployment since 1913. The next downturn, likewise, will be the fault of the Fed. It is true that the apparent prosperity and the boom part of the cycle are a result of the Federal Reserve credit creation, but the price that must always be paid and the unfairness of inflationism makes it is a dangerous process. The silly notion that money can be created at will by a printing press or through computer entries is eagerly accepted by the majority as an easy road to riches, while ignoring any need for austerity, hard work, saving, and a truly free market economy. Those who actively endorse this system equate money creation with wealth creation and see it as a panacea for the inherent political difficulty in raising taxes or cutting spending. A central bank that has no restraints placed on it is always available to the politicians who spend endlessly for reelection purposes. When the private sector lacks its appetite to lend sufficiently to the government, the Federal Reserve is always available to buy Treasury debt with credit created outside of thin air. At the lightest hint that interest rates are higher than the Fed wants, its purchase of debt keeps interest rates in check; that is, they are kept lower than the market rate. Setting interest rates is an enormous undertaking. It is price fixing and totally foreign to the principle of free market competition. Since this process is economically stimulating, the politicians, the recipients of government largess, the bankers, and almost everyone enjoys the benefit of what seems to be a gift without cost. But that is a fallacy. There is always a cost. Artificially low interest rates prompts lower savings, over-capacity expansion, malinvestment, excessive borrowing, speculation, and price increases in various segments of the economy. Since money creation is not wealth creation, it inevitably leads to a lower value for the currency. The inflation always comes to an end with various victims, many of whom never enjoyed the benefits of the credit creation and deficit spending. This silly notion of money and credit gives rise to the conventional wisdom that once the economy gets really rolling along, it is time for the Fed to stop economic growth. This false assumption is that economic growth causes higher prices and higher labor costs, and these evils must be prevented by tightening credit and raising interest rates. But these are only the consequences of the previous monetary expansion, and blaming rising prices or higher labor costs is done only to distract from the real culprit, monetary inflation by the Federal Reserve. In a free market, economic growth would never be considered a negative and purposely discouraged. It is strange that so many established economists and politicians accept the notion of dampening economic growth for this purpose. Economic growth with sound money always lowers prices. It never raises them. Deliberately increasing rates actually increases the cost of borrowing for everyone, and yet it is claimed that this is necessary to stop rising cost. Obviously, there is not much to the soundness of central economic planning through monetary policy of this sort. There are some who see this fallacy and object to deliberately slowing the economy but instead clamor for even more monetary growth to keep interest rates low and the economy booming. But this is just as silly because that leads to even more debasement of the currency, rising prices, and instead of lowering interest rates will, in time, due to inflationary expectation, actually raise rates. Fine-tuning the economy through monetary manipulation is a dangerous game to play. We are now completing a decade of rapid monetary growth and evidence is now appearing indicating that we will soon start to pay for our profligate ways. The financial bubble that the Fed manufactured over the past decade or two will burst and the illusion of our great wealth will end. In time, also the illusion of ``surpluses for as far as the eyes can see will end.'' Then the Congress will be forced to take much more seriously the budgetary problems that it pretends do not exist.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I am pleased to support the resolution of the gentlewoman from Texas expressing Congress' appreciation for the valuable work of America's teachers. I would also like to take this opportunity to urge my colleagues to support two pieces of legislation I have introduced to get the government off the backs, and out of the pockets, of America's teachers. The first piece of legislation, H.R. 1706, prohibits the expenditure of federal funds for national teacher testing or certification. A national teacher test would force all teachers to be trained in accordance with federal standards, thus dramatically increasing the Department of Education's control over the teaching profession. Language banning federal funds for national teacher testing and national teacher certification has been included in both the House and Senate versions of the Elementary and Secondary Education Act (ESEA). I have also introduced the Teacher Tax Cut Act (H.R. 937) which provides every teacher in America with a $1,000 tax credit. The Teacher Tax Cut Act thus increases teachers' salaries without raising federal expenditures. It lets America's teachers know that the American people and the Congress respect their work. Finally, and perhaps most importantly, by raising teacher take-home pay, the Teacher Tax Cut Act encourages high-quality people to enter, and remain in, the teaching profession. Mr. Speaker, these two bills send a strong signal to America's teachers that we in Congress are determined to encourage good people to enter and remain in the teaching profession and that we want teachers to be treated as professionals, not as Education Department functionaries. In conclusion, I urge my colleagues to vote for this resolution recognizing the hard work of America's teachers. I also urge they continue to stand up for those who have dedicated their lives to educating America's children by cosponsoring my legislation to prohibit the use of federal funds for national teacher testing and to give America's teachers a $1,000 tax credit.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I appreciate the opportunity to express my opposition to H.R. 4055, which authorizes over $160 billion in new federal spending for programs imposed on local school districts by the Individuals with Disabilities Education Act (IDEA). While I share the goal of devoting more resources to educating children with learning disabilities, I believe that there is a better way to achieve this laudable goal than increasing spending on an unconstitutional, failed program that thrusts children, parents, and schools into an administrative quagmire. Under the system set up by IDEA, parents and schools often become advisories and important decisions regarding a child's future are made via litigation. I have received compliments from a special education administrator in my district that unscrupulous trial lawyers are manipulating the IDEA process to line their pockets at the expenses of local school districts. Of course, every dollar a local school district has to spend on litigation is a dollar the district cannot spend educating children. IDEA may also force local schools to deny children access to the education that best suits their unique needs in order to fulfill the federal command that disabled children be educated ``in the least restrictive setting,'' which in practice means mainstreaming. Many children may thrive in a mainstream classroom environment, however, some children may be mainstreamed solely because school officials believe it is required by federal law, even though the mainstream environment is not the most appropriate for that child. On May 10, 1994, Dr. Mary Wagner testified before the Education Committee that disabled children who are not placed in a mainstream classroom graduate from high school at a much higher rate than disabled children who are mainstreamed. Dr. Wagner quite properly accused Congress of sacrificing children to ideology. Increasing IDEA spending also provides incentives to over-identify children as learning disabled, thus unfairly stigmatizing many children and, in a vicious cycle, leading to more demands for increased federal spending on IDEA. Instead of increasing spending on a federal program that may actually damage the children it claims to help, Congress should return control over education to those who best know the child's needs: parents. In order to restore parental control to education, I have introduced the Family Education Freedom Act (H.R. 935), which provides parents with a $3,000 per child tax credit to pay for K-12 education expenses. My tax credit would be of greatest benefit to parents of children with learning disabilities because it would allow them to devote more of their resources to ensure their children get an education that meets the child's unique needs. In conclusion, I would remind my colleagues that parents and local communities know their children so much better than any federal bureaucrat, and they can do a better job of meeting a child's needs than we in Washington. There is no way that the unique needs of my grandchildren, and some young boy or girl in Los Angeles, CA or New York City can be educated by some sort of `Cookie Cutter' approach. Thus, the best means of helping disabled children is to empower their parents with the resources to make sure their children receive an education suited to their child's special needs, instead of an education that scarifies that child's best interest on the altar of the ``Washington-knows-best'' ideology. I therefore urge my colleagues to join with me in helping parents of special needs children to provide their children with an education by repealing federal mandates that divert resources away from helping children and, instead, embrace my Family Education Freedom Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, as this is Texas Home School Appreciation week, I am pleased to take this opportunity to salute those Texas parents who have chosen to educate their children at home. While serving in Congress, I have had the opportunity to get to know many of the home schooling parents in my district. I am very impressed by the job these parents are doing in providing their children with a quality education. I have also found that home schooling parents are among the most committed activists in the cause of advancing individual liberty, constitutional government, and traditional values. I am sure my colleagues on the Education Committee would agree that the support of home schoolers was crucial in defeating the scheme to implement a national student test. Home schooling is becoming a popular option for parents across the country. In Texas alone, there are approximately seventy five thousand home schooling families educating an average of three children per household. Home schooling is producing some outstanding results. For example, according to a 1997 study the average home schooled student scores near the ninetieth percentile on standardized academic achievement tests in reading, mathematics, social studies, and science! Further proof of the success of home schooling is the fact that in recent years, self-identified home schoolers have scored well above the national average on both the Scholastic Aptitude Test (SAT) and the American College Test (ACT). These high scores are achieved by home schooling children, regardless of race, income-level, or gender. Contrary to media-generated stereotypes portraying home schooled children as isolated from their peers, home schooled children participate in a wide variety of social, athletic, and extra-curricular activities. Home schooling parents have formed numerous organizations designed to provide their children ample opportunity to interact with other children. In fact, recent data indicates that almost 50% of home schooled children engage in extra-curricular activities such as group sports and music classes, while a third of home schooled children perform volunteer work in their communities. Mr. Speaker, to be a home schooling parent takes a unique dedication to family and education. In many cases, home school families must forgo the second income of one parent, as well as incurring the costs of paying for textbooks, computers, and other school supplies. Home schooling parents must pay these expenses while, like all American families, struggling to pay state, local, and federal taxes. In order to help home schoolers, and all parents, devote more of their resources to their children's education, I have introduced the Family Education Freedom Act (H.R. 935). This bill provides all parents a $3,000 per child tax credit for K-12 education expenses. This bill would help home school parents to provide their children a first-class education in a loving home environment. The Family Education Freedom Act will also benefit those parents who choose to send their children to public or private schools. Parents who choose to send their children to private school may use their tax credit to help cover the cost of tuition. Parents who choose to send their children to public schools may use their tax credit to help finance the purchase of educational tools such as computers or extracurricular activities like music programs. Parents may also use the credit to pay for tutoring and other special services for their children. Mr. Speaker, the best way to improve education is to return control over education resources to the people who best know their children's unique needs: those children's parents. Congress should empower all parents, whether they choose to home school or send their child to a public or private school, with the means to control their child's education. That is why I believe the most important education bill introduced in this Congress is the Family Education Freedom Act. In conclusion, I wish to once again commend the accomplishments of those parents who have chosen to educate their children at home. I also urge my colleagues to help home schoolers, and all parents, ensure their children get a quality education by cosponsoring the Family Education Freedom Act.

Mr. PAUL

Mr. PAUL. Mr. Speaker, I want to join my colleagues who spoke today about the death of Cardinal O'Connor. In the passing of this tremendous spiritual beacon, millions of American worshipers have lost a great shepherd of the faithful. Cardinal O'Connor was an unabashed champion for human life and human dignity. His presence will be missed. Throughout his illness he showed us how to face death with dignity as well. John Cardinal O'Connor was a giant. He lived his life as a true pillar of faith. In a time when our nation and our world has witnessed a general move toward the devaluation of our common humanity, this man stood firm against the grain. There has never been a time when it has been as difficult as it is now for people to stand against the worst traits of modernity. Cardinal O'Connor's example shows beyond the shadow of a doubt that humans can continue to stand firm for noble goals even in this most difficult of times. Having had the opportunity to correspond with him recently, I can attest that he remained a gentle and principled man until the very end of his earthly life. May God continue to bless the Cardinal and reveal Himself in all of His majesty to this great man in the place he has now been welcomed.

Mr. PAUL

Mr. PAUL. Madam Speaker, I asked for this Special Order this evening to talk about trade. We are going to be dealing with permanent normal trade relations with China here soon, and there is also a privileged resolution that will be brought to the floor that I have introduced, H.J.Res. 90. The discussion in the media and around the House floor has been rather clear about the permanent normal trade status, but there has not been a whole lot of talk yet about whether or not we should even really be in the World Trade Organization. I took this time mainly because I think there is a lot of misunderstanding about what free trade is. There are not a whole lot of people who get up and say I am opposed to free trade, and many of those who say they are for free trade quite frankly I think they have a distorted definition of what free trade really is. I would like to spend some time this evening talking a little bit about that, because as a strict constitutionalist and one who endorses laissez-faire capitalism, I do believe in free trade; and there are good reasons why countries should trade with each other. The first reason I would like to mention is a moral reason. There is a moral element involved in trade, because when governments come in and regulate how citizens spend their money, they are telling them what they can do or cannot do. In a free society, individuals who earn money should be allowed to spend the money the way they want. So if they find that they prefer to buy a car from Japan rather than Detroit, they basically have the moral right to spend their money as they see fit and those kinds of choices should not be made by government. So there is a definite moral argument for free trade. Patrick Henry many years ago touched on this when he said, ``You are not to inquire how your trade may be increased nor how you are to become a great and powerful people but how your liberties may be secured, for liberty ought to be the direct end of your government.'' We have not heard much talk of liberty with regards to trade, but we do hear a lot about enhancing one's ability to make more money overseas with trading with other nations. But the argument, the moral argument, itself should be enough to convince one in a free society that we should never hamper or interfere with free trade. When the colonies did not thrive well prior to the Constitution, two of the main reasons why the Constitutional Convention was held was, one, there was no unified currency, that provided a great deal of difficulty in trading among the States, and also trade barriers are among the States. Even our Constitution was designed to make sure that there were not trade barriers, and this was what the interstate commerce clause was all about. Unfortunately though, in this century the interstate commerce clause has been taken and twisted around and is the excuse for regulating even trade within a State. Not only interstate trade, but even activities within a State has nothing to do with interstate trade. They use the interstate commerce clause as an excuse, which is a wild distortion of the original intent of the Constitution, but free trade among the States having a unified currency and breaking down the barriers certainly was a great benefit for the development and the industrialization of the United States. The second argument for free trade is an economic argument. There is a benefit to free trade. Free trade means that you will not have high tariffs and barriers so you cannot buy products and you cannot exert this freedom of choice by buying outside. If you have a restricted majority and you can evenly buy from within, it means you are protecting industries that may not be doing a very good job, and there is not enough competition. It is conceded that probably it was a blessing in disguise when the automobile companies in this country were having trouble in the 1970s, because the American consumer was not buying the automobiles, the better automobiles were coming in, and it should not have been a surprise to anybody that all of a sudden the American cars got to be much better automobiles and they were able to compete. There is a tremendous economic benefit to the competition by being able to buy overseas. The other economic argument is that in order to keep a product out, you put on a tariff, a protective tariff. A tariff is a tax. We should not confuse that, we should not think tariff is something softer than a tax in doing something good. A tariff is a tax on the consumer. So those American citizens who want to buy products at lower prices are forced to be taxed. If you have poor people in this country trying to make it on their own and they are not on welfare, but they can buy clothes or shoes or an automobile or anything from overseas, they are tremendously penalized by forcing them to pay higher prices by buying domestically. The competition is what really encourages producers to produce better products at lower costs and keep the prices down. If one believes in free trade, they do not enter into free trade for the benefit of somebody else. There is really no need for reciprocity. Free trade is beneficial because it is a moral right. Free trade is beneficial because there is an economic advantage to buying products at a certain price and the competition is beneficial. There really are no costs in the long run. Free trade does not require management. It is implied here on conversation on the House floor so often that free trade is equivalent to say we will turn over the management of trade to the World Trade Organization, which serves special interests. Well, that is not free trade; that is a misunderstanding of free trade. Free trade means you can buy and sell freely without interference. You do not need international management. Certainly, if we are not going to have our own government manage our own affairs, we do not want an international body to manage these international trades. Another thing that free trade does not imply is that this opens up the doors to subsidies. Free trade does not mean subsidies, but inevitably as soon as we start trading with somebody, we accept the notion of managed trade by the World Trade Organization, but immediately we start giving subsidies to our competitors. If our American companies and our American workers have to compete, the last thing they should ever be required to do is pay some of their tax money to the Government, to send subsidies to their competitors; and that is what is happening. They are forced to subsidize their competitors on foreign aid. They support their competitors overseas at the World Bank. They subsidize their competitors in the Export/Import Bank, the Overseas Private Investment Corporation. We literally encourage the exportation of jobs by providing overseas protection in insurance that cannot be bought in the private sector. Here a company in the United States goes overseas for cheap labor, and if, for political or economic reasons, they go bust, who bails them out. It is the American taxpayer, once again, the people who are struggling and have to compete with the free trade. It is so unfair to accept this notion that free trade is synonymous with permitting these subsidies overseas, and, essentially, that is what is happening all the time. Free trade should never mean that through the management of trade that it endorses the notion of retaliation and also to stop dumping. This whole idea that all of a sudden if somebody comes in with a product with a low price that you can immediately get it stopped and retaliate, and this is all done in the name of free trade, it could be something one endorses. They might argue that they endorse this type of managed trade and subsidized trade; but what is wrong, and I want to make this clear, what is wrong is to call it free trade, because that is not free trade. Most individuals that I know who promote free trade around Washington, D.C., do not really either understand what free trade is or they do not really endorse it. And they are very interested in the management aspect, because some of the larger companies have a much bigger clout with the World Trade Organization than would the small farmers, small rancher or small businessman because they do not have the same access to the World Trade Organization. For instance, there has been a big fight in the World Trade Organization with bananas. The Europeans are fighting with the Americans over exportation of bananas. Well, bananas are not grown in Europe and they are not grown in the United States, and yet that is one of the big issues of managed trade, for the benefit of some owners of corporations that are overseas that make big donations to our political parties. That is not coincidental. So powerful international financial individuals go to the World Trade Organization to try to get an edge on their competitor. If their competitor happens to be doing a better job and selling a little bit lower, then they come immediately to the World Trade Organization and say, Oh, you have to stop them. That is dumping. We certainly do not want to give the consumers the benefit of having a lower price. So this to me is important, that we try to be clear on how we define free trade, and we should not do this by accepting the idea that management of trade, as well as subsidizing trade and calling it free trade is just not right. Free trade is the ability of an individual or a corporation to buy goods and spend their money as they see fit, and this provides tremendous economic benefits. The third benefit of free trade, which has been known for many, many centuries, has been the peace effect from trade. It is known that countries that trade with each other and depend on each other for certain products and where the trade has been free and open and communications are free and open and travel is free and open, they are very less likely to fight wars. I happen to personally think this is one of the greatest benefits of free trade, that it leads us to policies that direct us away from military confrontation. Managed trade and subsidized trade do not qualify. I will mention just a little later why I think it does exactly the opposite. There is a little bit more to the trade issue than just the benefits of free trade, true free trade, and the disadvantages of managed trade, because we are dealing now when we have a vote on the normal trade status with China, as well as getting out of the World Trade Organization, we are dealing with the issue of sovereignty. The Constitution is very clear. Article I, section 8, gives the Congress the responsibility of dealing with international trade. It does not delegate it to the President, it does not delegate it to a judge, it does not delegate it to an international management organization like the World Trade Organization. International trade management is to be and trade law is to be dealt with by the U.S. Congress, and yet too often the Congress has been quite willing to renege on that responsibility through fast-track legislation and deliver this authority to our President, as well as delivering through agreements, laws being passed and treaties, delivering this authority to international bodies such as the UN-IMF-World Trade Organizations, where they make decisions that affect us and our national sovereignty. The World Trade Organization has been in existence for 5 years. We voted to join the World Trade Organization in the fall of 1994 in the lame duck session after the Republicans took over the control of the House and Senate, but before the new Members were sworn in. So a lame duck session was brought up and they voted, and by majority vote we joined the World Trade Organization, which, under the Constitution, clearly to anybody who has studied the Constitution, is a treaty. So we have actually even invoked a treaty by majority vote. This is a serious blunder, in my estimation, the way we have dealt with this issue, and we have accepted the idea that we will remain a member based on this particular vote. Fortunately, in 1994 there was a provision put in the bill that said that any member could bring up a privileged resolution that gives us a chance at least to say is this a good idea to be in the World Trade Organization, or is it not? Now, my guess is that we do not have the majority of the U.S. Congress that thinks it is a bad idea. But I am wondering about the majority of the American people, and I am wondering about the number of groups now that are growing wary of the membership in the World Trade Organization, when you look at what happened in Seattle, as well as demonstrations here in D.C. So there is a growing number of people from various aspects of the political spectrum who are now saying, what does this membership mean to us? Is it good or is it bad? A lot of them are coming down on the side of saying it is bad. Now, it is also true that some who object to membership in the World Trade Organization happen to be conservative free enterprisers, and others who object are coming from the politics of the left. But there is agreement on both sides of this issue dealing with this aspect, and it has to do with the sovereignty issue. There may be some labor law and there may be some environmental law that I would object to, but I more strenuously object to the World Trade Organization dictating to us what our labor law ought to be and what our environmental law ought to be. I highly resent the notion that the World Trade Organization can dictate to us tax law. We are currently under review and the World Trade Organization has ruled against the United States because we have given a tax break to our overseas company, and they have ruled against us and said that this tax break is a tax subsidy, language which annoys me to no end. They have given us until October 1 to get rid of that tax break for our corporations, so they are telling us, the U.S. Congress, what we have to do with tax law. You say, oh, that cannot be. We do not have to do what they tell us. Well, technically we do not have to, but we will not be a very good member, and this is what we agreed to in the illegal agreement. Certainly it was not a legitimate treaty that we signed. But in this agreement we have come up and said that we would obey what the WTO says. Our agreement says very clearly that any ruling by the WTO, the Congress is obligated to change the law. This is the interpretation and this is what we signed. This is a serious challenge, and we should not accept so easily this idea that we will just go one step further. This has not just happened 5 years ago, there has been a gradual erosion of the concept of national sovereignty. It occurred certainly after World War II with the introduction of the United Nations, and now, under current conditions, we do not even ask the Congress to declare war, yet we still fight a lot of wars. We send troops all over the world and we are involved in combat all the time, and our presidents tell us they get the authority from a UN resolution. So we have gradually lost the concept of national sovereignty. I want to use a quote from somebody that I consider rather typical of the establishment. We talk about the establishment, but nobody ever knows exactly who they are. But I will name this individual who I think is pretty typical of the establishment, and that is Walter Cronkite. He says, ``We need not only an executive to make international law, but we need the military forces to enforce that law and the judicial system to bring the criminals to justice in an international government.'' ``But,'' he goes on to say, and this he makes very clear, and this is what we should be aware of, ``the American people are going to begin to realize that perhaps they are going to have to yield some sovereignty to an international body to enforce world law, and I think that is going to come to other people as well.'' So it is not like it has been hidden, it is not like it is a secret. It is something that those who disagree with me about liberty and the Constitution, they believe in internationalism and the World Trade Organization and the United Nations, and they certainly have the right to that belief, but it contradicts everything America stands for and it contradicts our Constitution, so, therefore, we should not allow this to go unchallenged. Now, the whole idea that treaties could be passed and undermine the ability of our Congress to pass legislation or undermine our Constitution, this was thought about and talked about by the founders of this country. They were rather clear on the idea that a treaty, although the treaty can become the law of the land, a treaty could never be an acceptable law of the land if it amended or changed the Constitution. That would be ridiculous, and they made that very clear. It could have the effect of the law of the land, as long as it was a legitimate constitutional agreement that we entered into. But Thomas Jefferson said if the treaty power is unlimited, then we do not have a Constitution. Surely the President and the Senate cannot do by treaty what the whole government is interdicted from doing in any way. So that is very important. We cannot just sit back and accept the idea that the World Trade Organization, we have entered into it, it was not a treaty, it was an agreement, but we have entered into it, and the agreement says we have to do what they tell us, even if it contradicts the whole notion that it is the Congress' and people's responsibility to pass their own laws with regard to the environment, with regard to labor and with regard to tax law. So I think this is important material. I think this is an important subject, a lot more important than just the vote to trade with China. I think we should trade with China. I think we should trade with Cuba. I think we should trade with everybody possible, unless we are at war with them. I do not think we should have sanctions against Iran, Iraq or Libya, and it does not make much sense to me to be struggling and fighting and giving more foreign aid to a country like China, and at the same time we have sanctions on and refuse to trade and talk with Cuba. That does not make a whole lot of sense. Yet those who believe and promote trade with China are the ones who will be strongly objecting to trade with Cuba and these other countries. So I think a little bit more consistency on this might be better for all of us. Alexander Hamilton also talked about this. He said a treaty cannot be made which alters the Constitution of the country or which infringes any expressed exception to the powers of the Constitution of the United States. So these were the founders talking about this, and yet we have drifted a long way. It does not happen overnight. It has been over a 50-year period. Five years ago we went one step further. First we accepted the idea that international finance would be regulated by the IMF. Then we accepted the idea that the World Bank, which was supposed to help the poor people of the world and redistribute wealth, they have redistributed a lot of wealth, but most of it ended up in the hands of wealthy individuals and wealthy politicians. But the poor people of the world never get helped by these programs. Now, 5 years ago we have accepted the notion that the World Trade Organization will bring about order in trade around the country. Well, since that time we have had a peso crisis in Mexico and we had a crisis with currencies in Southeast Asia. So I would say that the management of finances with the IMF as well as the World Trade Organization has been very unsuccessful, and even if one does not accept my constitutional argument that we should not be doing this, we should at least consider the fact that what we are doing is not very successful. What I think we are seeing, when you get tens of thousands of people out on an issue that seems to be esoteric and start talking and demonstrating against our policy, essentially as they did in Seattle and Washington, I would say maybe the grassroots in America are starting to wake up a lot sooner than the people here in the U.S. Congress. So I think that it is very important that we think this through and think of it in the big context, not only in the very narrow context of voting for trade with China or not. The World Trade Organization does not represent free trade because it is management of trade. It accepts all the complaints from the countries who think that they are being undersold or the competition is getting a little tough for them. Just this week, the President has announced that he will send seven more complaints to the World Trade Organization, seven different countries who are being charged with unfair trade practices. The United States has not fared well with the World Trade Organization. The World Trade Organization has ruled against us on patents dealing with the playing of music, the World Trade Organization has ruled against us with regard to taxes, and also against us on some anti-dumping resolutions. But I am afraid that what is happening is, it is just another international bureaucracy that will be able to provide benefits for some very powerful special interests and ignore the little people who have a harder time to get an ear at the World Trade Organization. The China situation I think is an interesting one because we are spending a lot of effort trading with China. Of course, the tragedy really here is not free trade in trading with China; it has to do with China getting some of our top secrets which to me is more disturbing than trading and buying some things that we might want from China. But China, we have gone to this extent. They have received a tremendous amount. I think they have now received $13 billion from the World Bank. They are the largest recipient of the Export-Import Bank. And, at the same time we send these benefits to China, we still have Members in the Congress who seem to flip flop on the issues who will say well, no, I do not like China; I think China, they are not respectable enough and they will undermine what we are doing, so I do not want to trade with China and they will vote against trade with China, yet at the same time they continue to vote to subsidize China through the Export-Import Bank. That is hard for me to understand why, if one does not want to trade with China, why would one want to continue to send them money. Why would they not vote against the World Bank sending them money. Why would they not vote against the Export-Import Bank sending money over there, because that is subsidizing them. That is where the real harm comes from. Yet, we see that inconsistency all the time. Madam Speaker, I would like to discuss the third point about free trade that I made, and that is that free trade should lead to peace. I sincerely believe this, if we have free trade. But take an example of this: free trade is supposed to lead to lower taxes and lower prices. But here we have the World Trade Organization not telling us to lower taxes to be equal, that would not be quite as harmful, but here we have a World Trade Organization telling us to raise taxes to equal the competition. So it is working perversely. The same way in the military sense. We trade with China, we subsidize China, and yet China appears to be a threat to Taiwan. So what do we do? Do we say let us not send any more subsidies to China? No, what we do is we hurry up and say well, there could be a conflict between Taiwan and China, so we send more weapons to Taiwan. So in subsidizing the Communist system in China, as well as militarizing and sending the military weapons and promising that we will support Taiwan, we are bound and determined to stir up a fight over there with us in the middle. So this, in itself, should tell us that this is not free trade. Free trade means that we are less likely to fight with people and yet, we are stirring up trouble over there and literally, but rather typically, we are subsidizing and helping both sides, which we have done for many, many years. This is why the argument for national sovereignty and the national defense, a strong national defense makes a whole lot of sense, because we do not have to make these determinations. First, we do not have the authority to make the determination of the internal affairs of other nations. We do not have that authority. We probably do not have the wisdom to pick out who the good guys and the bad guys are, but we certainly do not have the finesse to do it by going in there and satisfying all sides. About all we do is we commit ourselves to these conflicts around the world, commit our troops and commit our dollars. Instead of trying to come back from some of these commitments of troops every place in the world, we are looking for more dragons to slay. We in the Congress are going along with the President, getting prepared to send billions of dollars down to Colombia to support a faction down there that has been in a civil war for decades and 30,000 people killed. And of course the grandiose explanation is that we are going down there and we are going to stop drugs from coming in here, which is a dream, because that is not going to happen. But the real reason why I think we venture out into these areas is to serve the financial interests, because it just happens that those individuals who like to sell helicopters and they like to sell airplanes and they like others who would like to protect oil interests are the ones who are more likely to lobby for us to be in areas like this. Madam Speaker, free trade, if it were true free trade, we would be less likely ever to fight with other countries. There was one free trade economist who stated that he had a rule, it was called the McDonald rule. He said he has watched it so far and up until now, the best he knows, there has never been two countries that have had McDonalds in each country ever fought a war. So that is rather simplistic, but I think there is a lot of truth to that, that we should trade and talk with people, give people the freedom and the right to spend their money the way they want. Do not take the money from the people who may have short-term disadvantages from free trade and tax them in order to subsidize the competition. That is where I think we really get off track and we do way too much of it. Madam Speaker, I would like to touch on another subject about trade that is rarely mentioned, and it may well be one of the most important aspects of trade. That has to do with the even flow of trade between countries and their currencies. Balance of payment deficits and current account deficits are very, very important in the long run, especially if they are accompanied by fiat money and not sound money and different currencies being inflated at different rates. This will cause imbalances which causes tremendous shake-outs like we had in Southeast Asia where all of a sudden there are devaluations and some of the protectionist sentiment in order to get an edge on the competitors will be frequently deliberate devaluations where they will prop up currencies in order to get an edge or keep a currency lower in order to get an edge. These things can work for a while, but they usually end up in a crisis, with a currency crisis, higher interest rates, inflations and a downturn in the economy. Now, fortunately, over the last 10 years, most other countries have done a poorer job than we have. The United States has had a built-in advantage in the 1990s since the breakup of the Soviet Union. We have remained the power house economically and militarily which conveys a certain amount of confidence to our currency and has given us license to counterfeit. It has given our Federal Reserve license to create credit out of thin air for all of the reasons they want to do, to stimulate housing or whatever. Also, to encourage some of these trade imbalances. So some of the protectionists will look and they will say, look how much we buy from China, look how much we buy from Japan. That is related to the fact that we have a currency that is artificially and temporarily rated very high and foreigners are willing to take our money, creating this imbalance. But that will all come to an end, because we cannot do this forever. When that happens, stocks go down, interest rates go up, the economy drops, and inflation comes back. The benefits that we have received over these past 10 years have only been temporary. So when we look at the imbalances created by the currency system and the monetary system, we should be prepared to find out that the World Trade Organization will do absolutely nothing to solve that problem. The IMF cannot solve that problem, the World Bank cannot solve that problem, and the World Trade Organization certainly will not solve that problem, because some of the imbalances have already been built into the system. Madam Speaker, we are the greatest debtor Nation in the world today. Our current account deficit is running at record highs. That will be reversed, and the value of the dollar will be reversed. This will cause some serious problems for all of us. It will be the paying back. We have borrowed money endlessly, the foreigners are willing to take our money, sell us cheap products. Our standard of living goes up, they loan us back the money, they buy into our stock market, so we have an illusion of wealth because we have the greatest counterfeiting machine in the world, and that is the Federal Reserve's ability to create credit out of thin air. It would be nice if it would last forever and these perceptions would persist, but if one looks at monetary history, one finds out that it never persists forever. It persists only for a limited period of time. There was a time in the 1980s they thought in Japan it would persist forever, and then all of a sudden the investment and the adjustments that were required from the over-capacity built into their system came about, and because they have not permitted the liquidation of the debt and the adjustment in prices and wages, their problems have persisted now for more than 10 years. So we will have to face up to that. The important thing there is that it is not a trade problem, it is a currency problem. One day, we in the Congress will have to decide whether or not we want a sound currency again, or whether we want to continue manipulating a paper currency, a paper currency backed up by nothing. Nothing but promises, promises that we will tax the American people, and that if the American people are not working hard enough and they are not paying enough taxes or the economy slips, all of a sudden that perceived value of the dollar will go down. So that is a very serious problem that we will be needing to address in the not too distant future. I would like to mention in a little bit more detail the H. J. Res. 90, because that is the number of the resolution that will be brought to the floor for a vote, and it is not a complicated piece of legislation, it is a single page. It just says that we do not want to be members of the World Trade Organization. People worry, well, what will this mean? It will mean that we believe in free trade. It means that we will trade with China and that we will have low tariffs and that we should not be subsidizing or managing trade for powerful special interests, but it will also mean that we do not endorse this concept that the World Trade Organization should be dictating to us the way we write our laws. The way this was stated is that we must accept the idea that we accept the rules of the WTO. I, of course, think that is a serious mistake, and that we should always work for free trade. Monesque was very clear on his ideas about what free trade should be and why we should have it in relationship to this issue of war and peace. That, of course, I think is the most important. He says, peace is the natural effect of trade. Two nations who differ with each other become reciprocally dependent, for if one has an interest in buying, the other has an interest in selling, and thus, their union is founded on their mutual necessities. That is true, but what we are doing today by subsidizing and supporting a regime like Red China, not trading with Red China, but subsidizing them at the same time we see the antagonism building with Taiwan and our only answer there is to rush to Taiwan and send them more weapons, and we decide to stand in between them, I think is a foolish policy that will lead to trouble. Madam Speaker, we should not be the policemen of the world. We should set a standard on free trade. We should set a standard in the ideas of liberty. We should be aware and think more seriously about what Patrick Henry said. If we are concerned only about the immediate financial benefit of some trade agreement, we forget about the bigger picture. And the bigger picture and the bigger the responsibility of all of us, my responsibility and your responsibility to our people, and the American people should think about this too. The most important thing is that we provide liberty for our people to let our people solve their problems. This blind faith in big government and this blind faith in international government and World Trade Organization, the United Nations, and this idea that we can police the world, that is a blind faith which I think has caused a lot of trouble and is bound to bring a lot more pain and suffering to us in the future. Madam Speaker, I am quite confident that in due time, it will be the undoing of our system if we do not change our ways. Because technically, we are a bankrupt Nation. We talk about huge surpluses, but the huge surpluses are fictitious. The national debt is going up at a rate of $100 billion a month. There is no surplus. There is a commitment made out there, and the wealth of this country is based on borrowed money and a belief that the dollar is going to be remaining strong forever and ever. That fiction will come to an end, and we will be forced to face up to reality, and then we have to decide what really is our purpose. Is our purpose to manage people, tell them how to live, tell them how to live their personal lives? Is our job to manage the economy and distort the general welfare clause and the interstate commerce clause to the point that we tell everybody what they can do with every item they buy? And are we going to permit agreements that are not treaties to act as treaties to undermine our national sovereignty and write laws for us in the Congress? I do not think that is a very good idea, and I think that is the direction that we are going. I think there is every reason to believe that if we go back to what America was all about and the importance of the American policies, what made America great, we will be all right. But we have too much emphasis on the commercialism of what people want from special advantage. Why is it that we here in the Congress are lobbied by lobbyists willing to spend $130 million a month? Why do they come here? Because their interests are best served because we are doing way too much. And I certainly do not believe that the answer is to regulate the lobbyists, regulate the elections or tell people how to spend their own money. What we should regulate is ourselves. We should regulate our insatiable desire to tell people what to do and how to live and how to run the economy and how the world should run. That is what we cannot seem to control. We seem to not have any ability to just back away and have some belief and conviction that a free society works; that freedom works; that protection of life and liberty is important; the protection of property is important. Madam Speaker, the World Trade Organization undermines property rights through the patent laws, which they have done; the Congress endlessly buying up land and confiscating land from the people, taking land from the people. We do not honor property rights. We interfere with contracts continuously. The Government should be protecting liberty. The Government is not here under the original agreement with the people and the Constitution. The Government, we the Congress, the Constitution was designed to protect our liberties, not to undermine them; and yet we spend most of our time here undermining the liberties of the people. Now the question is: Is that what the people want? Do the people really want us to do this and tell them what to do and how to live endlessly, and they will accept that because they will get things from us? As long as we take care of them and provide them free medical care and free education and everything is free, everybody knows we have all of that ability to create free things. Most people, though, I am afraid are on to us. They think the U.S. Congress and the United States Government creates nothing. They are incapable of creating anything. About all they can do is take from one and give to another, and then in the process undermine the principles of liberty. And by doing that, we will undermine the principles of the basic concept of what is necessary to produce a good standard of living. But we concentrate not on liberty, not on freedom. We concentrate on the things that are distributed and redistributed, the advantages and the disadvantages and how we are going to get bigger government. Not only bigger Federal Government, but bigger international government, never talking about what are the advantages to the people if we just give them their freedom. Just leave them alone. The people I have my greatest sympathies for are the low middle- income people. People who do not want to go on welfare and are getting ripped off by the system because they do have to pay taxes, and they are the first ones who suffer from job losses and suffer from the inflation, and they are the last ones to have any representation up here. If one is on welfare, they have representation. And if one is a giant corporation willing to send equipment overseas and fight wars, they have great representation. But if one is hard working, believes in freedom, accepts the responsibility for their own acts, believes they should take care of their family, would like to be left alone, then they are seen as an enemy of the State. The Government too often wants to do something to them, like tax them more and more. So I think it is time we as a Congress started thinking about something other than the transfer of wealth and the control and manipulation of people. Think again once more of the quote that I used as I started tonight by Patrick Henry: ``You are not to inquire how your trade may be increased, nor how you are to become a great and powerful people, but how your liberties may be secured. For liberty ought to be the direct end of your government.'' If we make liberty the direct end of our government, I do not believe for one minute that we will have to worry about the prosperity. Because we have neglected the liberties of our people, I am deeply concerned about the prosperity of our people and I am deeply concerned about the international conflicts that we tend to stir up and demand that we send our troops throughout the world. I think that can lead to trouble. It has in the past. It will in the future. Because we have drifted from this notion that the Government should be limited. Limited to protecting our liberty, making sure the marketplace is free, making sure that property rights exist, and making sure that we mind our own business. And quite possibly if we would do more of that, minding our own business and not spending this money overseas, we could literally do a better job taking care of our military. Madam Speaker, our military needs funding. They need a morale boost. They need better training. They need a better mission. And yet we send them hither and yon around the world spending hundreds of billions of dollars, at the same time our defenses are probably as low as they have ever been. But that is not a ``lack of money'' problem; that is a ``lack of mission'' problem. It is a lack of understanding what policy ought to be. Our policy ought to be, and our purpose ought to be, the preservation of liberty. The preservation of liberty means that we should have free trade and that we should talk to our so-called enemies and trade with them and deal with them, and we are less likely to fight with them. But we should never fall into the trap of talking and using words incorrectly, this idea that people come and talk so much about free trade and then do not defend free trade, or do not understand it. What they are talking about is managed trade by the World Trade Organization, and it means that we also subsidize our enemies and our competitors around the world. That is not free trade. That is not related to freedom. Freedom is not that complex. Fortunately for us, we have a document that is rather clear and simple that we all can read and understand. And, unfortunately, we do not read it often enough when we pass this massive legislation here on the House floor and get ourselves involved in too many things. So, hopefully, here in the next couple of weeks as we talk more about trade and we have a vote on China, as well as a vote on whether or not we should even be in the World Trade Organization, hopefully we will have more than five or 10 or 15 or 20, say: That makes sense. Why are we in the World Trade Organization? We can still believe in freedom, we can still believe in trade, we can still believe in the American dream without accepting the idea that free trade and freedom means we belong to the World Trade Organization. Hopefully, there will be enough people in this Congress to send the message and say at least let us question this. Why do we feel so compelled to belong to these international organizations, joining them not with a treaty but with a mere vote of this Congress and now they are dictating law back to us. Hopefully, those individuals who are a little bit annoyed with the World Trade Organization because they have encroached upon our lawmaking process dealing with trade law, dealing with labor law, and dealing with environmental law, dealing with tax law, that they will say maybe the problem is not mismanagement of the World Trade Organization; maybe we should not have that much confidence that if we get a few new managers in there, like they think they can do at the IMF. Maybe the problem is that we should not be in the World Trade Organization at all.

Mr. PAUL

Mr. PAUL. Madam Speaker, I move that the House do now adjourn.

Mr. PAUL

Mr. PAUL. Mr. Speaker, today I pay tribute to the Student Council Energy and Environment Committee of Bastrop High School in Bastrop, Texas. This dedicated group of students has been working diligently on projects to increase awareness about energy conservation and the environment. Some of their projects include trash pick-up, recycling, efficient driving and car maintenance training, and coordination of Earth Day festivities in Bastrop on the third weekend of April. They have also spread information by way of books, pamphlets and posters around their community. Not only has their work improved the safety and appearance of the campus and surrounding area, but it has also increased feelings of school unity and pride among the students. Their local focus is an example to all of us that local involvement is key to solving most problems faced by Americans today. I am proud to represent such a responsible and dedicated group of young people. Mr. Speaker, I urge my colleagues to join me in saluting the Student Council of Bastrop High School. This is an excellent way to show sincere appreciation for those who take the time and energy to improve their communities for themselves and others.

Mr. PAUL

Mr. PAUL. I thank the gentleman from Massachusetts. Mr. Chairman, I yield back the balance of my time.

Mr. PAUL. I yield to the gentleman from Massachusetts.

Mr. PAUL. I thank the gentleman from New York (Mr. Lazio) for the support.

Mr. PAUL. I yield to the gentleman from New York.