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Last week the Supreme Court heard oral arguments in the case of Masterpiece Cakeshop v. Colorado Civil Rights Commission. The case stems from the refusal of Masterpiece Cakeshop, a bakery, to bake a wedding cake for a same-sex couple. The bakery was found guilty of a civil rights violation and ordered to stop refusing to bake and design cakes because they are for same-sex weddings. The bakery was also required to file reports on the steps it takes to comply and whether it turns down any prospective customers.

The decision to force the bakery to change its business practices reflects a mistaken concept of rights. Those who support government intervention in this case view rights as a gift from government. Therefore, they think politicians and bureaucrats can and should distribute and redistribute rights. This view holds it is completely legitimate to use government force to make bakeries bake cakes for same-sex weddings since the government-created right to a cake outweighs the rights of property and contract.

This view turns the proper concept of rights on its head. Rights are not gifts from government, so the government cannot restrict them unless we engage in force or fraud. The bakery did not use force to stop any same-sex couple from getting a wedding cake. It simply exercised its right to decide who it would accept as a customer. No one would support private individuals forcing bakery employees to bake a cake at gunpoint, so why is it right for the government to do it?

Some people claim that forcing the bakery to bake the cake is consistent with libertarianism. The reason they make this claim is they view the bakery’s actions as rooted in bigotry toward homosexuals. But even if this were true, it would not justify government intervention. Bigots and others with distasteful views have the right to use their property as they choose. The way to combat bigotry is through boycotts and other means of peaceful persuasion.

Instead of considering whether Colorado has violated the bakery’s rights of property and contract, the Supreme Court is considering whether Colorado’s actions violate the bakery’s religious liberty. The argument for a religious liberty violation is based on the fact that the bakery owner’s refusal to bake the cake was rooted in his religious objection to same-sex marriage. Looking just at this argument means that a victory for the bakery would implicitly accept the legitimacy of laws dictating to whom private businesses must provide services, as long as an exemption is made for those with religious objections. This reduces property and contract rights to special privileges held by business owners with “sincere religious convictions.” It also allows judges, bureaucrats, and politicians to determine who is really acting on sincere religious convictions.

Just as business owners have the right to decide who to do business with, individuals have the right to form any arrangement they wish as long as they do not engage in force or fraud. This includes entering into what many consider unconventional or even immoral marriage contracts. What no individual has the right to do is use government to force others to accept his definition of marriage.

Even if the bakery wins in the Masterpiece Cakeshop case, its victory will only protect those businesses acting on a “sincere religious conviction.” Those who oppose forcing bakers to bake cakes and who support private business owners’ right to decide who to accept as customers should work to restore respect for everyone’s rights.

(Republished from The Ron Paul Institute by permission of author or representative)
 
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Do we need a third major political party? I often joke that I’d be happy if we actually had a second party, as when it comes to the big issues – war, monetary policy, civil liberties – the Republicans and Democrats are more alike than different. Perhaps that’s why a recent NBC News poll has found that nearly two-thirds of young people surveyed do not believe either the Republicans or Democrats are doing a good job and that a third major political party is needed.

I think this is an encouraging sign. I suspect the NBC News poll result reflects the fact that young people are not as easily hoodwinked by the mainstream media and by the two-party duopoly charade in Washington. This generation has grown up with the Internet and the abundance of alternative media that challenges what really is a one-party system in the United States. They have been exposed to many new ideas, including good ones like libertarianism and non-interventionism.

Currently, mainstream politics in the US is all about power – how to get it and how to keep it – and not at all about philosophy or ideology. It is about selling out principles at every turn in order to chalk up another point in the “win” column. On issues like war and spending, it’s incredible how easily the two major parties are able to “compromise.”

A serious effort to create a new political party could be very exciting, but only if that new party is based on real ideas rather than simply the desire for power. Creating a viable third party will not be easy. While there is plenty written in the media about foreign collusion in US elections, the real collusion is between the Republican and Democratic Parties to prevent new parties from joining them on the national stage and the ballot.

Unfortunately the Libertarian Party has failed to live up to what should have been its role as an ideological alternative to Washington’s one-party system. As was quite obvious in the 2016 presidential election, the Libertarians yielded to prevailing attitudes on war, welfare, the Federal Reserve, and more. In believing that winning was more important than standing for something, they ended up achieving neither.

I would still like to have some hope for the Libertarian Party, but to really fill its role as a challenger to our two party system (that is actually a one party system) it would need a major overhaul. It would need to actually embrace the core libertarian principles of non-aggression and non-intervention in the affairs of others.

At the end of my 2008 presidential campaign, I brought together the candidates of the “minor” political parties and proposed that we agree on some basic principles regardless of whether we are libertarians, conservatives, progressives, or greens. Among those was the idea that we should never go to war unless we were directly attacked or threatened, that the Federal Reserve should not be allowed to benefit the rich by creating money out of thin air, and that we should not endorse deficit spending.

If a new party could come together and agree on these basic principles while agreeing to disagree on other, less important priorities, we could begin a formidable movement toward peace and prosperity.

Let us hope that this NBC News survey provides the inspiration to a real pro-peace, pro-prosperity movement in the United States. I have much confidence in the youth of our country!

(Republished from The Ron Paul Institute by permission of author or representative)
 
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President Trump announced last week that he was returning North Korea to the US list of “state sponsors of terrorism” after having been off the list for the past nine years. Americans may wonder what dramatic event led the US president to re-designate North Korea as a terrorism-sponsoring nation. Has Pyongyang been found guilty of some spectacular terrorist attack overseas or perhaps of plotting to overthrow another country by force? No, that is not the case. North Korea is back on the US list of state sponsors of terrorism because President Trump thinks the move will convince the government to give up its nuclear weapons and ballistic missile program. He believes that continuing down the path toward confrontation with North Korea will lead the country to capitulate to Washington’s demands. That will not happen.

President Trump and Secretary of State Rex Tillerson argued that North Korea deserved to be back on the list because the North Korean government is reported to have assassinated a North Korean citizen – Kim Jong-Un’s own half-brother — in February at the Kuala Lumpur International Airport. But what does that say about Washington’s own program to assassinate US citizens like Anwar al-Awlaki and his 16 year old son under Obama, and later Awlaki’s six year old daughter under Trump? Like Kim’s half brother, Awlaki and his two children were never tried or convicted of a crime before being killed by their own government.

The neocons, who are pushing for a war with North Korea, are extremely pleased by Trump’s move. John Bolton called it “exactly the right thing to do.”

Designating North Korea as a state sponsor of terrorism will allow President Trump to impose the “highest level of sanctions” on North Korea. Does anyone believe more sanctions – which hurt the suffering citizens of North Korea the most – will actually lead North Korea’s leadership to surrender to Washington’s demands? Sanctions never work. They hurt the weakest and most vulnerable members of society the hardest and affect the elites the least.

So North Korea is officially a terrorism-sponsoring nation according to the Trump Administration because Kim Jong-Un killed a family member. Meanwhile, Saudi Arabia is in the process of killing the entire country of Yemen and no one says a word. In fact, the US government has just announced it will sell Saudi Arabia $7 billion more weapons to help it finish the job.

Also, is it not “state-sponsorship” of terrorism to back al-Qaeda and ISIS, as Saudi Arabia has done in Syria?

The truth is a “state sponsor of terrorism” designation has little to do with actual support for global terrorism. As bad as the North Korean government is, it is does not go abroad looking for countries to invade. The designation is a political one, allowing Washington to ramp up more aggression against North Korea.

Next month the US and South Korean militaries will conduct a massive military exercise practicing an attack on North Korea. American and South Korean air force fighters and bombers will practice “enemy infiltration” and “precision strike drills.” Are these not also to be seen as threatening?

What is terrorism? Maybe we should ask a Yemeni child constantly wondering when the next Saudi bomb overhead might kill his family. Or perhaps we might even ask a Pakistani, Somali, Iraqi, Syrian, or other child who is terrified that the next US bomb will do the same to his family. Perhaps we need to look at whether US foreign policy actually reflects the American values we claim to be exporting before we point out the flaws in others.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Foreign Policy • Tags: American Military, North Korea, Terrorism 
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It’s remarkable that whenever you read an article about Yemen in the mainstream media, the central role of Saudi Arabia and the United States in the tragedy is glossed over or completely ignored. A recent Washington Post article purporting to tell us “how things got so bad” explains to us that, “it’s a complicated story” involving “warring regional superpowers, terrorism, oil, and an impending climate catastrophe.”

No, Washington Post, it’s simpler than that. The tragedy in Yemen is the result of foreign military intervention in the internal affairs of that country. It started with the “Arab Spring” which had all the fingerprints of State Department meddling, and it escalated with 2015’s unprovoked Saudi attack on the country to re-install Riyadh’s preferred leader. Thousands of innocent civilians have been killed and millions more are at risk as starvation and cholera rage.

We are told that US foreign policy should reflect American values. So how can Washington support Saudi Arabia – a tyrannical state with one of the worst human rights record on earth – as it commits by what any measure is a genocide against the Yemeni people? The UN undersecretary-general for humanitarian affairs warned just last week that Yemen faces “the largest famine the world has seen for many decades with millions of victims.” The Red Cross has just estimated that a million people are vulnerable in the cholera epidemic that rages through Yemen.

And why is there a cholera epidemic? Because the Saudi government – with US support – has blocked every port of entry to prevent critical medicine from reaching suffering Yemenis. This is not a war. It is cruel murder.

The United States is backing Saudi aggression against Yemen by cooperating in every way with the Saudi military. Targeting, intelligence, weapons sales, and more. The US is a partner in Saudi Arabia’s Yemen crimes.

Does holding hands with Saudi Arabia as it slaughters Yemeni children really reflect American values? Is anyone even playing attention?

The claim that we are fighting al-Qaeda in Yemen and thus our involvement is covered under the post-9/11 authorization for the use of force is without merit. In fact it has been reported numerous times in the mainstream media that US intervention on behalf of the Saudis in Yemen is actually a boost to al-Qaeda in the country. Al-Qaeda is at war with the Houthis who had taken control of much of the country because the Houthis practice a form of Shi’a Islam they claim is tied to Iran. We are fighting on the same side as al-Qaeda in Yemen.

Adding insult to injury, the US Congress can’t be bothered to even question how we got so involved in a war that has nothing to do with us. A few conscientious Members of Congress got together recently to introduce a special motion under the 1973 War Powers Act that would have required a vote on our continued military involvement in the Yemen genocide. The leadership of both parties joined together to destroy this attempt to at least get a vote on US aggression against Yemen. As it turns out, the only Members to vote against this shamefully gutted resolution were the original Members who introduced it. This is bipartisanship at its worst.

US involvement in Saudi Arabia’s crimes against Yemen is a national disgrace. That the mainstream media fails to accurately cover this genocide is shameful. Let us join our voices now to demand that our US Representatives end US involvement in Yemen immediately!

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Foreign Policy • Tags: Saudi Arabia, Yemen 
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Shutting down the Department of Education and returning control of the education dollar to the American people is the key to improving education. The best way to put the people in charge of education is by shutting down all unconstitutional bureaucracies, repealing the Sixteenth Amendment, and ending the Federal Reserve’s money monopoly.

Since Congress is unlikely to restore constitutional, limited government in the near future, supporters of quality education must advance policies aimed at giving Americans control over the education dollar so they can seek alternatives to the federally-controlled system. This is why I have always supported education tax credits and deductions.

When I was in Congress, I introduced legislation providing tax credits for contributions to education scholarship funds. These funds provide K-12 scholarships to low-income-family students whose parents cannot afford private schools. These scholarship funds allow these children to escape government schools that have been ruined by federal “reforms” like No Child Left Behind and Common Core, as well as mandates such as the ones dictating what can be served in school cafeterias.

Including education scholarship tax credits in the tax reform bill currently before Congress would be a major step toward creating a free market in education. In a free market, parents could select the type of education that best suits the unique needs of their children, instead of the demands of politicians and bureaucrats. Schools could compete on the basis of academics, extracurricular activities, and even lunch menus. Those with unique and innovative education ideas would be free to establish schools and prove their models’ superiority.

Moving to a free-market education system would increase the amount of money spent on educating children. This is because in a free market resources would not be siphoned away from the classroom to support a bloated federal bureaucracy and schools would not be force to waste valuable resources proving they are complying with federal regulations.

By increasing competition, education scholarship tax credits encourage government-run schools to improve. The threat of losing more students may even cause local school boards and state boards of education to resist federal mandates. Thus, education scholarship tax credits can improve the education of all children.

Some libertarians oppose education scholarship tax credits on the grounds that they are a form of government “subsidy.” Since education tax credits allow people to use their own money to support education, this claim only makes sense if one believes that all income is owned by the government, so any income not taxed away is a gift from government. This is a strange position for a libertarian to take!

Other critics say that tax breaks for education (or any other item) distort the market. They also claim that these tax breaks cause income taxes to be higher than they would be without these credits. These critics may have a point, but the answer is to force Congress to cut spending and reduce or eliminate all taxes, not to take away existing tax breaks.

Almost all Americans agree that education should be generously funded. The only question is who should control the education dollar — the federal government or the people. Anyone looking for the answer need only consider how American education has declined as the federal government’s role has increased. Education scholarship tax credits are an important step toward restoring control of education to the American people and providing a quality education to children from low-income families. Congress should help American children and include education scholarship tax credits in the tax reform bill.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Ideology • Tags: Education, Public Schools, Taxes, Vouchers 
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Last Thursday, congressional Republicans unveiled their tax reform legislation. On the same day, President Trump nominated current Federal Reserve Board Governor Jerome Powell to succeed Janet Yellen as Federal Reserve chair. While the tax plan dominated the headlines, the Powell appointment will have much greater long-term impact. Federal Reserve policies affect every aspect of the economy, including whether the Republican tax plan will produce long-term economic growth.

President Obama made history by appointing the first female Fed chair. President Trump is also making history: If confirmed, Powell would be the first former investment banker to serve as chairman of the Federal Reserve. Powell’s background suggests he will continue Janet Yellen’s Wall Street-friendly low interest rates and easy money policies.

Powell is an outspoken opponent of the Audit the Fed legislation. In 2015, Powell delivered an address at Catholic University devoted to attacking Audit the Fed. Like most Fed apologists, Powell claims the audit would compromise the Fed’s independence and allow Congress to control monetary policy. However, like all who make this claim, Powell cannot point to anything in the text of the audit bill giving Congress any power over the Federal Reserve. Powell’s concerns about protecting the Fed’s independence are misplaced, as the Fed has never been free of political influence. The Fed has a long history of bowing to presidential pressure to tailor monetary policy to help advance the president’s political and policy agenda.

The Republican tax cut plan has some positive elements, such as increasing the standard deduction, creating a new family tax credit, eliminating the death tax, reducing the corporate tax rate, and lowering taxes on small businesses. It also has some flaws, such as the “millionaire surcharge” imposed on upper-income taxpayers. This provision reflects a belief that upper-income taxpayers only “deserve” a tax break if reducing their taxes serves the interest of government by increasing economic growth.

The worst part of the tax plan is that it adopts the chained consumer price index (chained CPI). Chained CPI is a way of measuring CPI that understates inflation’s effects on our standard of living. It does this by assuming inflation has not reduced Americans’ standard of living if, for example, people can buy hamburgers when they can no longer afford steak. This so-called full substitution ignores the fact that if individuals viewed hamburgers as a full substitute for steak they would have bought hamburgers before Fed-created inflation made steak unaffordable.

Chained CPI increases the inflation tax. The inflation tax may be the worst of all taxes because it is hidden and regressive. The inflation tax is not even a tax on real wages. Instead it is a tax on the illusionary gains in income caused by inflation. The use of chained CPI to adjust tax brackets pushes individuals into higher tax brackets over time.

Politicians love the inflation tax because it allows them to increase taxes without having to vote for higher rates. Instead, the Fed does the dirty work. Since their creation in 1913, the Federal Reserve and the income tax have both enabled the growth of the welfare-warfare state and the erosion of our freedom and economic well-being. The key to restoring our liberty and prosperity, as well as avoiding a major economic crisis, is reversing the great mistakes of 1913 by repealing the 16th Amendment and auditing and ending the Federal Reserve.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Ideology • Tags: Republicans, Taxes 
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Does anyone in the Trump Administration have a clue about our Syria policy? In March, Secretary of State Rex Tillerson appeared to be finally pulling back from President Obama’s disastrous “Assad must go” position that has done nothing but prolong the misery in Syria. At the time, Tillerson said, the “longer-term status of President Assad will be decided by the Syrian people.”

Those of us who believe in national sovereignty would say that is pointing out the obvious. Nevertheless it was a good sign that US involvement in Syria – illegal as it is – would no longer seek regime change but would stick to fighting ISIS.

Then out of the blue this past week, Tillerson did another 180 degree policy turn, telling a UN audience in Geneva that, “[t]he reign of the Assad family is coming to an end. The only issue is how that should that be brought about.”

The obvious question is why is it any of our business who runs Syria, but perhaps that’s too obvious. Washington’s interventionists have long believed that they have the unilateral right to determine who is allowed to head up foreign countries. Their track record in placing “our guy” in power overseas is abysmal, but that doesn’t seem to stop them. We were promised that getting rid of people like Saddam Hussein and Gaddafi would light the fire of freedom and democracy in the Middle East. Instead it has produced nothing but death and misery – and spectacular profits for the weapons manufacturers who fund neocon think tanks.

In Syria, Assad has been seen as a protector of Christians and other minorities against the onslaught of in many cases US-backed jihadists seeking his overthrow. While the Syrian system is obviously not a Switzerland-like democracy, unlike our great “ally” Saudi Arabia they do at least have elections contested by different political parties, and religious and other minorities are fully integrated into society.

Why has the Trump Administration shifted back to “Assad must go”? One reason may be that, one-by-one, the neocons who opposed Trump most vociferously during the campaign have found themselves and their friends in positions of power in his Administration. The neocons are great at winning while losing.

The real story behind Washington’s ongoing determination to overthrow the Syrian government is even more disturbing. In a bombshell interview last week, a former Qatari Prime Minister confessed that his country, along with Saudi Arabia, Turkey, and the United States, began shipping weapons to jihadists from the very moment Syrian unrest began in 2011. The well-connected Qatari former minister was trying to point out that his country was not alone in backing al-Qaeda and even ISIS in Syria. In the course of defending his country against terrorism charges leveled by Saudi Arabia he has spilled the beans about US involvement with the very groups claimed to be our arch-enemies. As they did in Afghanistan in the 1980s, the CIA supported radical Islamic terrorism in Syria.

Haven’t we done enough damage in Syria? Do we really need to go back to 2011 and destroy the country all over again? The neocons never admit a mistake and never change course, but I do not believe that the majority of Americans support their hijacking of President Trump’s Syria policy. It is long past time for the US to leave Syria alone. No bases, no special forces, no CIA assassination teams, no manipulating their electoral system. We need to just come home.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Foreign Policy • Tags: Donald Trump, Neocons, Syria 
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This week President Trump revealed his final five candidates for Federal Reserve chair. Disappointingly, but not surprisingly, all five have strong ties to the financial and political establishment. The leading candidates are former Federal Reserve governor and Morgan Stanley banker Kevin Warsh and current Fed governor, former investment banker, Carlyle Group partner, and George H.W. Bush administration official Jerome Powell. Gary Cohn, current director of the president’s National Economic Council and former president of Goldman Sachs, is also on Trump’s list.

Trump is also considering reappointing Janet Yellen, even though when he was running for president he repeatedly criticized her for pursuing policies harmful to the middle class. Of course candidate Trump also promised to support Audit the Fed and even voiced support for returning to the gold standard. But, he has not even uttered the words “Audit the Fed,” or talked about any changes to monetary policy, since the election.

Instead, President Trump, in complete contradiction to candidate Trump, has praised Yellen for being a “low-interest-rate-person.” One reason Trump may have changed his position is that, like most first-term presidents, he thinks low interest rates will help him win reelection. Trump may also realize that his welfare and warfare spending plans require an accommodative Fed to monetize the federal debt. The truth is President Trump’s embrace of status quo monetary policy could prove fatal to both his presidency and the American economy.

The failure of the Fed’s post-2008 policies of unprecedented money creation and record-low interest rates shows our experiment with fiat money is nearing its inevitable end. All of Trump’s potential picks are likely to continue the Fed’s current policies. Even the ones who say they favor higher rates will likely bow to the wishes of their friends in the financial and political establishment and make sure any rate hikes are minuscule. Appointing a Fed chair who will continue, or only make marginal changes to, these failed policies will hasten the collapse while making the resulting depression more painful.

Some say that Trump could make a radical change in monetary policy by appointing Stanford University professor and former George W. Bush administration Treasury official John Taylor. Professor Taylor is a leading advocate of a “rules-based” monetary policy. Advocates of forcing the Fed to follow specific rules say this will bring stability and predictability to monetary policy. However, a rules-based policy still allows the Fed to control the money supply and distort interest rates, thus still plaguing the economy with Fed-created bubbles and busts.

Trump would do well to appoint a Fed chair who follows the teachings of the Austrian school of economics and thus understands that the only thing the Fed can do to “fix” the economy is allow the correction to run its course. He should also use his bully pulpit to pass Audit the Fed and legislation legalizing competing currencies.

Fortunately, even if Trump is not speaking out on Audit the Fed, many Americans are demanding that Congress vote on and pass this bill. An increasing number of Americans are seeking alternatives to the Federal Reserve System, such as precious metals and cyber currency.

Another positive development is occurring in the states. Arizona recently passed legislation recognizing gold, silver, and other precious metals as legal tender. Wyoming will consider similar legislation next year. If Congress refuses to act to restore a free market in money by auditing and ending the Fed, more states are likely to pass these laws as more Americans reject fiat currency in favor of real money.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Economics • Tags: Donald Trump, Federal Reserve 
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President Trump has been notoriously inconsistent in his foreign policy. He campaigned on and won the presidency with promises to repair relations with Russia, pull out of no-win wars like Afghanistan, and end the failed US policy of nation-building overseas. Once in office he pursued policies exactly the opposite of what he campaigned on. Unfortunately Iran is one of the few areas where the president has been very consistent. And consistently wrong.

In the president’s speech last week he expressed his view that Iran was not “living up to the spirit” of the 2015 nuclear agreement and that he would turn to Congress to apply new sanctions to Iran and to, he hopes, take the US out of the deal entirely.

Nearly every assertion in the president’s speech was embarrassingly incorrect. Iran is not allied with al-Qaeda, as the president stated. The money President Obama sent to Iran was their own money. Much of it was a down-payment made to the US for fighter planes that were never delivered when Iran changed from being friend to foe in 1979. The president also falsely claims that Iran targets the United States with terrorism. He claims that Iran has “fueled sectarian violence in Iraq,” when it was Iranian militias who prevented Baghdad from being overtaken by ISIS in 2014. There are too many other false statements in the president’s speech to mention.

How could he be so wrong on so many basic facts about Iran? Here’s a clue: the media reports that his number one advisor on Iran is his Ambassador to the UN, Nikki Haley. Ambassador Haley is a “diplomat” who believes war is the best, first option rather than the last, worst option. She has no prior foreign policy experience, but her closest mentor is John Bolton – the neocon who lied us into the Iraq war. How do these people live with themselves when they look around at the death and destruction their policies have caused?

Unfortunately the American people are being neoconned into another war. Just as with the disastrous 2003 US attack on Iraq, the media builds up the fear and does the bidding of the warmongers without checking facts or applying the necessary skepticism to neocon claims.

Like most Americans, I do not endorse Iran’s style of government. I prefer religion and the state to be separate and even though our liberties have been under attack by our government, I prefer our much freer system in the US. But I wonder how many Americans know that Iran has not attacked or “regime-changed” another country in its modern history. Iran’s actions in Syria are at the invitation of the legitimate Syrian government. And why won’t President Trump tell us the truth about Iranian troops in Syria – that they are fighting ISIS and al-Qaeda, both of which are Sunni extremist groups that are Iran’s (and our) mortal enemies?

How many Americans know that Iran is one of the few countries in the region that actually holds elections that are contested by candidates with very different philosophies? Do any Americans wonder why the Saudis are considered one of our greatest allies in the Middle East even though they hold no elections and have one of the world’s worst human rights records?

Let’s be clear here: President Trump did not just announce that he was “de-certifying” Iran’s compliance with the nuclear deal. He announced that Iran was from now on going to be in the bullseye of the US military. Will Americans allow themselves to be lied into another Middle East war?

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Foreign Policy • Tags: Donald Trump, Iran 
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President Trump and the congressional Republican leadership recently unveiled a tax reform “framework.” The framework has a number of provisions that will lower taxes on middle-class Americans. For example, the framework doubles the standard deduction and increases the child care tax credit. It also eliminates the alternative minimum tax (AMT). Created in the 1960s, the AMT was designed to ensure the “wealthy” did not use “loopholes” to “get out of” paying taxes. Today the AMT is mostly a means to increase taxes on the middle class.

The framework eliminates the “death tax,” thus enabling family-owned small businesses and farms to remain family owned. It also helps the economy by lowering the corporate tax rate to 20 percent, reducing taxes on small businesses. The framework also adopts a territorial tax system, which means US companies would only pay tax on profits earned in the United States.

However, the framework is far from a total victory for liberty. Concerns have been raised that, depending on what income levels are assigned to what tax brackets, the plan could increase taxes on many middle- and lower-income Americans! This is largely due to the framework’s elimination of most tax deductions.

The framework also contains a stealth tax increase imposed via the chained consumer price index (chained CPI). Supporters of chained CPI clam the government is currently overstating inflation. The truth is exactly the opposite: government statistics are manipulated to understate inflation.

Chained CPI enhances the government’s ability to lie about inflation. One way it does so is by claiming that inflation does not lower our standard of living if we can substitute cheaper goods for goods made unaffordable by inflation. So inflation does not harm you if you can’t afford a steak dinner as long as you can still buy a cheeseburger.

Chained CPI allows the government to take maximum advantage of “bracket creep,” where individuals are pushed into higher tax brackets not because they are actually earning more money, but because inflation creates the illusion they are wealthier. In fact, by decreasing their purchasing power, inflation makes most people poorer. The inflation tax thus raises taxes on declining incomes. It is hidden and regressive, making it the most insidious of all taxes.

Most of the framework’s problems stem from Congress’ continued refusal to offset tax cuts with spending cuts. Instead, Congress continues to increase spending, with the only real debate over whether the government should spend more on welfare or warfare.

Pairing tax cuts with increases in federal spending and debt — and the drafters of the framework admit their plan will increase the debt by at least $2.2 trillion — means that the economic benefit from the tax cuts will be outweighed by the economic harm caused by the increase in debt. Increasing the debt also means the Federal Reserve will further devalue the dollar in order to monetize that debt. While the Republican tax and budget plans predict uninterrupted economic growth, the US economy is far more likely to undergo a major economic crisis caused by a rejection of the dollar’s world reserve currency status.

While all supporters of individual liberty and sound economics should support tax cuts, the Republicans’ failure to cut spending means that their tax plan will do little to increase liberty or prosperity. Instead of increasing debt, eliminating deductions, and relying on the inflation tax to “pay for tax cuts,” Congress should cut two dollars in spending on the military-industrial complex and other forms of corporate welfare for every dollar in tax cuts. Cutting both taxes and spending is the only way to protect prosperity and liberty.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Economics • Tags: Tax Cuts 
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