Keen on slashing the national debt? Ron Paul is your man

Ron Paul ranks as the one candidate among four whose announced policies would leave America with a lower national debt than it would have under a status quo course, according to a new analysis.

By Mark Trumbull | Christian Science Monitor – 2 hrs 20 mins ago

Ron Paul has touted himself as the strongest fiscal conservative running for the Republican presidential nomination, and according to one new analysis, he may be right.

The Texas congressman ranks as the one candidate among four whose announced policies would leave America with a lower national debt than it would have under a status quo course.

That's the tentative conclusion of the Committee for a Responsible Federal Budget (CRFB), a nonpartisan fiscal watchdog group, in a report evaluating the tax and spending policies of Representative Paul, Newt Gingrich, Mitt Romney, and Rick Santorum.

It's some basic math that any cash-strapped household would understand: His cuts to federal spending would outweigh his proposed tax cuts. The other candidates so far haven't fleshed out spending-cut plans that equal or exceed their tax cuts, which reduce expected federal revenues. In all, Paul's proposals would leave the United States with a national debt equaling 76 percent of one year's gross domestic product in 2021. That would be slightly higher than the debt is today, but lower than it would be in a base-line scenario that represents current policies pursued by Congress.

Former Massachusetts Governor Romney would leave public debt at 86 percent of GDP in 2021. Former US Senator Santorum would leave debt at 104 percent of GDP. Former House Speaker Gingrich would leave it at 114 percent of GDP.

In the base-line case, debt reaches 85 percent of GDP. This assumes a continuation of Bush-era tax cuts, an ongoing "patch" to keep more Americans from being hit by the alternative minimum tax, and an annual "doc fix" for physician payments under Medicare. In this status quo scenario, the deficit would amount to more than $1 trillion in 2021.

In public opinion polls, Americans see reducing annual deficits and the nation's overall debt as a top priority (behind economic growth and job creation) for government. Many economists say the debt is already rising into a zone that could threaten the economy's stability. Paul's prescription is to tackle the problem in libertarian fashion, with a major downsizing of the federal government. His proposals, as gauged by CRFB, would reduce federal spending by some $7.5 trillion over a nine-year period. (For comparison, federal spending will total $3.6 trillion in the 2012 fiscal year, the Congressional Budget Office estimates.)

Paul's cuts would span from the military to Medicaid and beyond.

In one TV ad, Paul's campaign has shown pictures depicting the Departments of Education, Interior, Energy, Commerce, and Housing and Urban Development blowing up as federal spending is reined in. "Later, bureaucrats," the narrator says.

His plan also calls for significant reductions in taxes on personal income, estates, and corporate income – totaling $5.2 trillion over the nine-year period that CRFB analyzed.

The CRFB analysis is tentative for several reasons. The group highlights estimates from an "intermediate scenario" for each candidate, based on policies each has spelled out in some detail. Romney doesn't get credit, for example, for his currently vague call for capping federal spending at 20 percent of GDP.

The CRFB says it will update its report as candidates revise or flesh out their economic plans.

The report also shows an alternative "low-debt" scenario, which essentially takes candidate pledges at face value, even if the proposals currently lack in detail.

In this scenario, Paul also leads the Republican pack in fiscal discipline, with debt falling to 67 percent of GDP. Romney and Santorum (who has a goal to cut $5 trillion in federal spending in five years) would also leave the US with lower debt than under the status quo case. Another caveat to the CRFB analysis: Paul's proposal to end the Federal Reserve would have wide and uncertain impacts on the economy. The CRFB takes only a first glance at this issue. It emphasizes an "intermediate-debt" scenario in which shutting down the Fed would cost the nation $430 billion over the nine-year period. That's because the Fed would no longer be making annual payments of surpluses from its operations to the US Treasury.

In the "low-debt" scenario, the CRFB credits the Paul plan with saving some $1.2 trillion by shutting down the Fed. But the group calls his idea "incomplete," saying that he proposes what amounts to a default by the Fed on the reserves it now holds for private banks. Some budget experts say these numbers regarding the Federal Reserve show only one implication of Paul's proposal. The bigger issue would be this: How would the economy function if the nation had no central bank to manage monetary policy?

"The impact on the budget would likely be major," said Alice Rivlin, a former Fed official who spoke at a Thursday panel discussion at the New America Foundation in Washington, at which the CRFB report was presented.

She didn't elaborate on the potential consequences. Many economists, while having varying views on optimal Fed policy, argue that the central bank played a key role in preventing the financial crisis of 2008 from pitching the economy into a 1930s-style depression. Paul has argued that a return to the gold standard would allow the economy to function with a "sound money" alternative to the current inflation-prone currency.

RECOMMENDED: The roar of Ron Paul – five of his unorthodox views on the economy Get daily or weekly updates from CSMonitor.com delivered to your inbox. Sign up today.

Economic Developments Around The Globe

By The Associated Press

A look at economic developments and activity in major stock markets around the world Thursday:
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BRUSSELS — Half the economies in the 17-nation eurozone are forecast to shrink this year, raising concerns that government austerity programs introduced to combat unsustainable debt levels are holding back growth.
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BERLIN — German business confidence has risen for the fourth consecutive month as Europe's biggest economy continues to outperform much of the rest of the debt-hobbled continent, a closely watched survey showed.
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BRUSSELS — The European Union is preparing regulations that will shut out Iran's banks from a major financial clearinghouse used by virtually every country in the world, a senior official said.
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LONDON — Markets were subdued as Greece pressed ahead with reforms demanded by its creditors in exchange for crucial bailout cash and as tensions rose in the Persian Gulf over Iran's nuclear program. Germany's DAX fell 0.5 percent while the CAC-40 in France was flat. The FTSE 100 index of leading British shares recovered from earlier losses to end 0.4 percent higher.
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TOKYO — In Asia, Hong Kong's Hang Seng dropped 0.8 percent and South Korea's Kospi lost 1 percent. But Japan's 225 Nikkei added 0.4 percent, its highest finish since Aug. 4, as the dollar traded near a seven-month high against the yen. That's a positive sign for Japan's powerhouse exporters, which have struggled amid a prolonged period of strength in the yen. In mainland China, the benchmark Shanghai Composite Index added 0.3 percent, its highest close in three months. The Shenzhen Composite Index advanced 0.5 percent.
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ATHENS, Greece — The Greek Parliament approved a massive bond swap that would wipe $142 billion off the country's privately-held debt, as new projections showed the economy will suffer the worst contraction in Europe this year.
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WARSAW, Poland — Poland's jobless rate rose to 13.2 percent in January from 12.5 percent the previous month, according to government statistics.

Santorum suggests Romney and Paul conspiring against him

Ron Paul, Rick Santorum and Mitt Romney (Jae C. Hong/AP) By Chris Moody
MESA, Ariz. -- Have Ron Paul and Mitt Romney made some kind of secret alliance to boost Romney to the nomination? Rick Santorum is starting to think so.

After months on the campaign trail, Paul has largely chosen to focus his attacks on candidates not named Mitt Romney, most recently going after Santorum, the latest candidate to pose a challenge to Romney's candidacy. The idea that Ron Paul would spare Romney--while attacking candidates with arguably stronger conservative records than the former Massachusetts governor--has Santorum wondering.

"You'll have to ask Congressman Paul and Governor Romney what they've got going together," Santorum told reporters after the Republican presidential debate in Mesa, Arizona on Wednesday. "Their commercials look a lot alike and so do their attacks." The idea might not be so far fetched. The Washington Post earlier this month reported that the Romney and Paul camps--as different as they are--have forged a behind-the-scenes alliance. "Romney's aides are 'quietly in touch with Ron Paul,' according to a Republican adviser who is in contact with the Romney campaign," the Post's Amy Gardner reported.

Although Paul has certainly landed a few punches on Romney over the course of the campaign, his efforts against him pale in comparison to the ads and comments he has made about the other candidates.

How Stupid Some People Can Be

Honestly, where does one find an ego that far out of touch with humanity, that they cry because someone moved something and or borrowed it and put it back exactly where it was. They are so caught up in their own world, they have forgotten who really Runs this shit. Step up and see what happens, I know exactly where I stand, and that is in The Right.

I mean my own brother, seriously he has not come to terms with the fact that very soon, nobody is going to own any type of materialistic goods. There will no longer be a need to outshine, or out-spend 'The Johnsons.' There will not be a cry for someone's ego trips, because nobody will care if that hurt your feelings or not. Just because you tell me not to take anything out of your room without permission, means I can't borrow something real quick and return it in the same condition it was in when I found it. You really need to blow off some steam, if that alone is causing you to flip your top.

You are not a Dictator, nor am I a servant. I am not gonna have my own Family treating me like an un-educated Animal anymore, it is very disheartening when they don't listen to you, they don't believe you, and they want you to do better, but aren't willing to go that extra step, to help you get back on the right track. It's easy to tell someone they are on the wrong track, but helping them get going in the right direction again is their problem, Right? Granted I have made a few mistakes along the way, but nobody is perfect. Needless to say, I feel unwelcome on this Planet, and it's only because I am too good for it!

Devlin-Blind Faith BBC Radio 1's Live Lounge

All Rights Reserved 2011.

"Blind Faith"
(with Ed Sheeran, originally by Chase & Status)

I am a man with a heavy heart,
And I dare not tear the pages
Fighting with automatic self destruction
I...

It's a blind faith
A cruel waste
One bitter taste
So I know why I
can't fight this sweet
sen-sa-tion.

Listen, music that we play somehow gets glued to your brain
I'm the future when I'm in the booth done like I'm living in 3008
This music gave me a lane to ride in, but there ain't cars in the sky yet, so hold tight
Because I'm in flight like a plane with a lift of a light
You know why? Because I got cold bars hard like crowbars
You can't gamble with no cards
What d'you wanna call it then you get stung like a phone charge
Music mentally uses me like a sailor might use sonar
To find where the flows are, upon an ocean floor that's so dark

Sweet sensation
The music that we play
Will ease your mind
Sweet sensation
Listen, listen, the music that we play
Will ease your mind

My heart falls heavy, like a bankers belly
But when I'm writing songs, I'm happy like chunk when you got away from the Portellies
And there's a musical vibe that usually moves inside of my mind
Therefore I've got a fortune already, and I ain't even talking in pennies
So ride on, my faith is blind like a man who requires a guide dog
And life's wrong, but I stride on regardless of anything I am strong
I got all that I need in a mic and a beat to see how alive I can be
And I got sweet sensation inside of me, because my mind's at ease

I am a man with a heavy heart,
And I dare not tear the pages
Fighting with automatic self destruction
I...
It's a blind faith
A cruel waste
One bitter taste
So I know why I can't fight this sweet sensation

Listen, I wanna say rest in peace, for children murdered on U.K. streets
While the country wages a war, there's a war going on in our very own streets
And I say that life's too short to end up in a morgue or a court
So why not give music a thought and use it to glide like a hawk
Listen, we all get down in the dumps
But when they hear the melody and base line pump
I feel my heart rate jump through the roof and then I run loose on my tongue
Confer with Morpheus if you need proof I'm the one
Or I'll put my heart on the scales to prove that my cardiac muscle weighs more than a ton

Sweet sensation
The music that we play
Will ease your mind
Sweet sensation
Listen, listen, the music that we play
Will ease your mind

I am a man with a heavy heart,
And I dare not tear the pages
Fighting with automatic self destruction
It's a blind faith
A cruel waste
One bitter taste
So I know why I can't fight this sweet sensation.