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Club for Growth: Ron Paul’s Economic Plan “Spectacular”

Club for Growth’s Andy Roth on Ron Paul’s Economic Plan:

“Ron Paul’s is actually spectacular and he’s got the track record to back it up. He wants to cut a trillion dollars right off the bat and then cut some more going further. He wants to get rid of five agencies. He wants to get rid of corporate subsidies. He wants to get rid of a lot of foreign aid. It’s very impressive, what he’s got, and I think he means it.”

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http://www.ronpaul2012.com/2012/01/10/club-for-growth-ron-pa...




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Neo cons like Club For

Neo cons like Club For Growth.
And Judicial Watch

“Give a man a gun, he can rob a bank. Give a man a central bank, and he can rob a country and the world.”
www.dailypaul.com/donate

I actually don't really like

I actually don't really like RP's economic plan in that I think that our economy is much more dependent on other things than things that the government can control. RP's policies can help shift it in a certain direction, but there is a limit.

After all, taxes are already at record lows (and play a very little part in job growth as the evidence shows). Demand for credit is very low; interest rates can't go any lower; raising interest rates can have a harmful effect. American manufacturing is prohibitively expensive because in other countries they essentially have slave labor...the lack of education in America for outsourced white collar jobs has much more to do with cultural trends than the federal education plan.

Moreover, I sincerely doubt RP can get much of this stuff done. He has to go throught Congress, a task that is going to be very tough because the Democrats will tend to oppose him based on party lines; the Republicans will tend to oppose him because of strong philosophical differences. For all his positive qualities, RP isn't a great debator or negotiator; he has a poor track record of navigating the muck that is Washington. He isn't a fighter, so to speak.

Maybe I am just being incredibly pessimistic....

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

You put forth a few misconceptions...

#1 - Taxes are NOT at historic lows. We didn't have a so-called income tax from 1789-1913, not to mention FICA, et al. (we essentially only had import and export duties)

#2 - The economy IS dependent on things the government ATTEMPTS to control but can't. That's the problem. It is impossible for government to control the economy because the economy IS every individual trying to fulfill their unlimited wants and desires with limited resources. Every time government tries to control this in any aspect, people change their behavior to compensate. This illustrates Henry Hazlitt's Economics in One Lesson - the law of unintended consequences.

#3 - Demand for credit is low for a variety of reasons, obviously, interest rates are NOT one of them. Rising rates would be VERY beneficial right now because this would encourage SAVINGS - REAL savings. This would then be lent out for new ventures, not more of the same malinvestment that needs to be liquidated.

#4 - American manufacturing is expensive because of several factors. Not because of external ones though. Chief among these is an ever depreciating currency. In this case, EVERYTHING is more expensive. Thus the most expensive in that chain will be even more so. Additionally, regulation upon manufacturing accounts for more than half the retail cost of products. There is also the not so small contributing factor of labor unions which demand ever higher wages for stagnant or falling productivity. They correctly identify a symptom - it gets more and more expensive to live every year. But they prescribe the wrong remedy - higher wages. All this does is drive up prices for everyone. The correct remedy is the one that address the culprit - monetary inflation.

#5 - more Americans are college educated for "white collar" work than ever before. The problem isn't cultural, the problem is those jobs left to be next to the manufacturing jobs. There is a reason for that. Engineers need to be able to make prototypes and models frequently. They need to be near physically to manufacturing processes. So, engineering has moved overseas as well. Then of course, management, executive, accounting, etc. follows. This all goes back to creating a hostile business climate with too much government.

#6 - A President can do a pile of stuff without Congress. The first thing he can do is outline everything that is unconstitutional. He can put a moratorium on enforcing it while he gives Congress the opportunity to come clean. If they don't, he'll simply stop enforcing unconstitutional law for good. Not the least of which are the Fed, the so-called income tax, and fiat currency. Those three right there would turn this economy around and have it booming inside of 6 months.

"Taxes are NOT at historic

"Taxes are NOT at historic lows. We didn't have a so-called income tax from 1789-1913, not to mention FICA, et al. (we essentially only had import and export duties)"

OK, they aren't at historic lows, but they are the lowest effective tax rates since the 50s. And the 50s were a period of tremendous economic growth.

"Every time government tries to control this in any aspect, people change their behavior to compensate. This illustrates Henry Hazlitt's Economics in One Lesson - the law of unintended consequences."

The problem with this line of thinking is the fact that if every time the government tries to control something, the people change their behaviour to compensate, people will also change their behaviour to the FACT that government is controlling something. For example, blaming malinvestment on government-fixed low interest rates makes no sense. Peopel woudl compensate for the fact that government was artificially lowering the rate.

"Demand for credit is low for a variety of reasons, obviously, interest rates are NOT one of them."

Exactly. Because low interest rates mean money is easy to borrow.

"Rising rates would be VERY beneficial right now because this would encourage SAVINGS - REAL savings. This would then be lent out for new ventures, not more of the same malinvestment that needs to be liquidated."

Rising rates would mean that people would invest even less because the risk woudl go up. My point is that demand for money is low even with low rates, because people don't see good investment opportunities. The well is drying up.

"American manufacturing is expensive because of several factors. Not because of external ones though. Chief among these is an ever depreciating currency."

A depreciating currency works both ways. It causes your costs to rise but can also justify you demanding more for your product. This is obvious.

"In this case, EVERYTHING is more expensive. Thus the most expensive in that chain will be even more so."

This doesn't make any sense.

What hurts American manufacturing is the simple fact that they can make it in a country where wages are lower and sell it in a country where purchasing power is high.

"Additionally, regulation upon manufacturing accounts for more than half the retail cost of products."

Proof?

"They correctly identify a symptom - it gets more and more expensive to live every year. But they prescribe the wrong remedy - higher wages. All this does is drive up prices for everyone. The correct remedy is the one that address the culprit - monetary inflation."

When you drive up prices, you drive up wages. When you drive down prices, you drive down wages. There is a reason that wages and inflation practically hug each other year-to-year. In other terms, if life became cheaper to live, demand for wages would be lower, and as a result wages would fall.

"more Americans are college educated for 'white collar' work than ever before."

No. More have a degree, more are not educated. The number of students doing engineering and science has remain unchanged, if not gone down. There are American companies who want to hire American workers but can't find any qualified ones.

"Engineers need to be able to make prototypes and models frequently. They need to be near physically to manufacturing processes."

Not the modern engineer. Maybe if you are in strucutural, chemical, or process chemistry. And honestly that could be simply solved with a few flights each year. Engineering has moved overseas because Chinese and Indian-trained engineers are not only cheaper, but they are very well-prepared for the job. Those educational systems take students and train them to be engineers as early as the age of 13. In America we wait until 18, if not 20!

"then of course, management, executive, accounting, etc. follows. This all goes back to creating a hostile business climate with too much government."

Yet management, executive, HR, accounting, finance has mostly stayed in the US?

"A President can do a pile of stuff without Congress. The first thing he can do is outline everything that is unconstitutional."

So the President is the sole decider of what is Constitutional or not? That is basically giving him dictatorial power. He can choose to ignore anything Congress does if he feels it is unconstitutional. He can ignore the court as well!

Ron Paul has himself admitted that the SC is what determines constitutionality. Congress and the Executive branch checks the SC by determining what is voted on, as well as by selecting the judges.

Your idea is a ridiculous idea.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

ya well as someone who actively invest i disagree with you

and i will at least settle with canceling each other out and settling with paul's honesty

besides, you aren't even describing the full aspect of the problem. honestly, even withdrawal of our troops might collapse the dollar, because in fact what's keeping the dollar stable isn't economic stability or any of that nonsense--it's military. it's not a coincidence why they were able to abolish gold standard a couple decades into the cold war, when we have spread ourselves all around the globe--we're not just any economic power. if everybody else collapses, we still have military presence around the world to control them.

this is why people didn't flee to euro in econ collapse. technically speaking they aren't really much worse off than us, purely on economics. but the point is this will be an economic slow death, because the whole system is unsustainable. look, just forget your theories. i can just tell you unabashedly that you're wrong. just trust the economic heads in this movement on what they say about paul. rely on instinct for the rest, forget bout your economics.

I actively invest as

I actively invest as well.

The military isn't keeping the dollar stable. It is the fact that no one believes the US government is going to default on its debt. The fact that no one thinks the US government can be conqueresd is what adds to the dollar's security. There is a reason why when the US's credit rating was downgraded, T-bill rates fell. They didn't go up.

And, quite frankly, the US is actually very far from having to renege on its debt. It could balance the budget very quickly with some simple reforms, mostly tax increases. That is what the market is actually seeing.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

You can almost see Neil Cavuto trying to...

stop his own neck from allowing his head to nod.

Cavuto is Paul friendly

I would love to see Sarah Palin come forward and say: Paul makes sense and I will vote for him.

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right

right

“Give a man a gun, he can rob a bank. Give a man a central bank, and he can rob a country and the world.”
www.dailypaul.com/donate