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Title: Blog by Novelist William S. Frankl, MD

The Paul Ryan Plan for Deficit and Government Spending Reduction vs the Federal Reserve

A most provocative article by Lewis E. Lehrman appeared in the Wall Street Journal, Tuesday, April 26, 2011 (wsj.com). The title of the article is “Monetary Reform: The Key to Spending Restraint.” I’d like to quote several lines from this article and urge everyone to read the whole piece.
“No man in America is a match for House Budget Committee Chairman Paul Ryan on the federal budget. No congressman in my lifetime has been more determined to cut government spending. No one is better informed for the task he has set himself. Nor has anyone developed a more comprehensive plan to reduce and ultimately eliminate the federal budget deficit than the House Budget resolution submitted by Mr. Ryan on April 5.
“But experience in the operations of the Federal Reserve system compelled me to predict that Mr. Ryan’s heroic efforts to balance the budget by 2015 without raising taxes will not end in success ––– even with a Republican majority in both Houses and a Republican president in 2012.
“Why? Because the House Budget Resolution fails to reform the federal reserve system that supplies the new money and credit to finance both the budget deficit and the balance-of-payments deficit. So long as the Treasury deficit can be financed with discretionary money and credit ––– newly created by the Federal Reserve, by the banking system, and by foreign central banks ––– the federal budget deficit will persist.”

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