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One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians. For example, government interference in health care increased health care costs, making it difficult or even impossible for many to obtain affordable, quality care. The effects of these prior interventions were used to justify Obamacare.

Now, the failures of Obamacare are being used to justify further government intervention in health care. This does not just include the renewed push for socialized medicine. It also includes supporting new laws mandating price transparency. The lack of transparency in health care pricing is a direct result of government policies encouraging overreliance on third-party payers.

This phenomenon is also observed in foreign policy. American military interventions result in blowback that is used to justify more military intervention. The result is an ever-expanding warfare state and curtailments on our liberty in the name of security.

Another example of this is related to the reaction to President Trump’s tariffs. Many of America’s leading trading partners have imposed “retaliatory” tariffs on US goods. Many of these tariffs target agriculture exports. These tariffs could be devastating for American farmers, since exports compose as much as 20 percent of the average farmer’s income.

President Trump has responded to the hardships imposed on farmers by these retaliatory tariffs with a 12 billion dollars farm bailout program. The program has three elements: direct payments to farmers, use of federal funds to buy surplus crops and distribute them to food banks and nutrition programs, and a new federal effort to promote American agriculture overseas.

This program will not fix the problems caused by Tramp’s tariffs. For one thing, the payments are unlikely to equal the money farmers will lose from this trade war. Also, government marketing programs benefit large agribusiness but do nothing to help small farmers. In fact, by giving another advantage to large agribusiness, the program may make it more difficult for small farmers to compete in the global marketplace.

Distributing surplus food to programs serving the needy may seem like a worthwhile use of government funds. However, the federal government has neither constitutional nor moral authority to use money taken by force from taxpayers for charitable purposes. Government-funded welfare programs also crowd out much more effective and compassionate private efforts. Of course, if government regulations such as the minimum wage and occupational licensing did not destroy job opportunities, government farm programs did not increase food prices, and the Federal Reserve’s inflationary policies did not continuously erode purchasing power, the demand for food aid would be much less. By increasing spending and debt, the agriculture bailout will do much more to create poverty than to help the needy.

Agriculture is hardly the only industry suffering from the new trade war. Industries — such as automobile manufacturing — that depend on imports for affordable materials are suffering along with American exporters. AFL-CIO President Richard Trumka (who supports tariffs) has called for bailouts of industries negatively impacted by tariffs. He is likely to be joined in his advocacy by crony capitalists seeking another government handout.

More bailouts will only add to the trade war’s economic damage by increasing government spending and hastening the welfare–warfare state’s collapse and the rejection of the dollar’s world reserve currency status. Instead of trying to fix tariffs-caused damage through more corporate welfare, President Trump and Congress should pursue a policy of free markets and free trade for all and bailouts for none.

(Republished from The Ron Paul Institute by permission of author or representative)
• Category: Economics, Foreign Policy • Tags: Federal Reserve, Free Trade 
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  1. Dorian says:

    There is a major problem with your thesis Mr. Paul…

    As much as you’ve pointed out how inadequately these tariffs cause harm to not just the US economy and world trade, you have just as much miss directed the overall case of where to point the blame. There is no point in wagging your finger at the political class, on either the right or the left, for their lack of understanding of the economic and political ramifications of what these tariffs and for that matter we can also include sanctions, will do to over all trade.

    The US government, has not been under the oversight of the elected members of Congress for many decades. Asking elected members of Congress to think wisely about what they are doing is akin to people demanding effective and just governorship from a puppet government. Think for example, how Iranians demanded better and just government from the Shah, before he was summarily kicked out, or how the people of Ukraine today have to fight the fascist – and fast becoming Nazist – government which is backed by the US today, for justice and protection from the growing government back Nazi forces running around amok the country today.

    The United States Congress has never been in control of the country. You know very well that nothing can be passed through Congress without the sanctimonious blessing of the corporate elites, aka The Swamp, that belies all US activities inside and through the world.

    The United States is now in war mode. Its only source of trade, is trade through military conquest of economies around the world. The Creatures Of The Swamp, can not, and will not allow fair trade. Every single trade deal the US makes is always biased towards the US. The US now effectively goes around the world pirating other nation’s riches. In fact, the US has NEVER in its history done a fair deal with any one. Consider your famous Tea Party of Boston, it is now well known to be a entire fabrication, this shows how long the US government has been using lies to twist the economic advantage towards itself, all because the US has never, ever, competed in the world market place, fairly or honestly. This is further exemplified how the US began to use its military to force trade, starting off with Cmdr. Perry and Japan, this was the beginning of a long history of abuse US military might to force advantageous trade deals, which were chiefly one way, specifically, your corrupt elites.

    No, Mr. Paul, you’re not doing any service to your country or the people of the world, by falsely promulgating that simple solution as “free trade” – excuse me, while I choke on that – to solve your economic problems. Mr. Paul, you’re just as bad as the very swamp creatures that you enunciate are behind the problems of government. For where is your real conviction? You stand in office knowing full well that you are on the public purse. Leaching like the other swamp creatures.

    The US government is run by a wealthy elite that lingers in the shadows. Working as a member of Congress as what ever capacity only makes you a benefactor. Proof of this is how you do not focus on the real problems that are plaguing the US, but these irrelevant issues like trade, when there hasn’t been fair trade by the US since its inception in 1770 (oh, a note on that, did the US ever vote on a United States? No. Thus is the US even a legal entity? Its no more or less legal than when the Communists over ran Russia in 1917 to form the USSR. Aren’t the similarities striking, especially now that the United States is turning towards communism.)

    No Mr. Paul, you’re a false prophet. A hypocrite. An apologist. And above all, a deceiver. The real fight in the US is with criminal element that is running Congress and the Military. You know who they are, the old money. The talk of tariffs and trade deals are just comfort stories for the ignorant American.

    Something for the rest of the world to keep in mind: The US’s entire trade deficit over these war years, as of 2017, is \$9 Trillion. Their cost on wars since 9/11 is estimated to be to date, over \$6 Trillion dollars. The cost to the GDPs for these past years of war to Afghanistan, Iraq, Libya and Syria? Not even \$1 Trillion, and for what? Just so the US can important stolen cheap oil. That’s \$9T debt to \$7T in expenditure to the Public. Now what does that mean? Read…

    Think about that! This entire 17 years war was all about to make some robber barons richer by destroying \$1 Trillion dollars of economies around the world, so they import cheap oil. Now imagine what the trade deficit would really be like, if the US had to pay proper honest cost of oil! Do you really think a better trade deal is going to help the US to fix its trade problems? Its trade deficit is about \$700-800 billion per year, and guess what? Its military spending is \$800 billion per year. In fact, if you look closely at the data, its military spending pretty much follows its trade deficit. Think about that one! All that money that is going somewhere. What you are witnessing is the old financial con of pass off the debt to public while the elites make hay. For every dollar of trade deficit that occurs, this money is swapped for \$1 that goes into military spending and thus into the war mongers pocket. That is why the trade deficit is tracing the military spending. Its an exchange, to make the American people poorer, while the elites get richer.

    That’s why Mr. Paul’s argument of tariffs and trade ring hollow. For this is just all part of the game plan to make certain Swamp Creatures richer, and turn the rest of the gullible ignorant people of America into suckers.

    Mr. Paul if you really want to do good. Then stop working for the US Government Mafia. Its time the US Government was overthrown. If governments like Iran, East Germany, Romania can be overthrown for a lot less, its time the US Government was overthrown. The US Government is an evil conniving thieving plutocracy. You can’t change a government for the better when its corrupt like. Mr. Paul, you should know better.

    The time for revolution in the US, again, is long over due.

    • Replies: @Achmed E. Newman
  2. Anonymous[383] • Disclaimer says:

    Libertarian = free-market/open-borders.

    “In a free market economy, in a healthy economy, we have a shortage of labor. People who come over and want to work, they help us. They enhance our standard of living.” -Ron Paul

    Ron Paul on C-Span in 1988

    • Replies: @Achmed E. Newman
  3. @Dorian

    Your comment started off very good, in my mind, Dorian, through paragraph 3. Then, it all went to hell quickly. Are you really trying to tell me that the US has gotten good trade deals with, say, oh, I dunno, just to pick one, CHINA!? Come off of it, man. We have have had people in government, say, people named Clinton, who have given away trade secrets, let industrial/military spies in all over the country, and made trade deals that are lop-sided toward China, all for pieces of 40 y/o poontang, some from as far back as the PoonTang Dynasty.

    I agree with your points that there are people behind the scenes, and that most of the politicians at the high levels are nothing but puppets now. However, that does not make them mastermind puppet-masters. Puppet-masters can be just as stupid in the long-term as the rest of them. US manufacturing has been eviscerated over the last 25 years by bad-for-Americans trade policy. Ross Perot warned us, and Trump at least has made an effort on our behalf.

    Though I agree completely with your anger (as does Dr. Paul) at the US warmongering. the oil price discussion missed the mark, too. Oil is a commodity. We don’t pay any less than anyone else does, or else they would turn around and buy it from whomever we buy it from. However, what our Feral Government does do, IMO, is make war in order to support the US dollar and to attempt to keep it the “reserve currency” for world trade. Otherwise, the dollar will go down the toilet, and real money (which we don’t have much of, because without much manufacturing, we don’t create enough wealth) will prevail. Ron Paul writes and talks about real money and the travesty of the FED all the time. You should follow him more, before you write comments like this.

  4. @Anonymous

    I would think Dr. Paul has changed his tune on this issue over the last 3 decades, but I don’t know – do you have anything more recent? I told the man IN PERSON, in 2012 “if you want to win [state XX], you need to talk about illegal immigration.” Dr. Paul did not blow me off, but he just said something about believing in law (which he does – he was one of the ONLY followers of the US Constitution in the entire Congress over the last 30 years). This was before he was marginalized by the Lyin’ Press, so I sure wish he’d have taken my advice into immediate consideration.

    Yes, the newcomers to this country, or 95% of ’em, at least, couldn’t give a rat’s ass about the US Constitution and anything else true Libertarians rightfully hold dear.

    • Replies: @Anonymous
  5. Anonymous[123] • Disclaimer says:
    @Achmed E. Newman

    Yes, Ron Paul is a politician, and talks out of both sides of his mouth. However, Libertarians, if he still is one, have one position on borders: OPEN.

    Open Borders Is the Only Libertarian Immigration Position
    by Jacob G. Hornberger
    May 19, 2016

    There is a common misconception in the libertarian movement that there are two positions on immigration within libertarianism: the position favoring open borders and the position favoring government-controlled borders. Nothing could be further from the truth. Libertarianism is a consistent philosophy. It doesn’t encompass contradictory positions…

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