On this Armistice Day, taking place in the week after midterm elections that promise to buttress US foreign intervention and President Barack Obama’sannouncement that he is sending 1,500 troops and desires $5.6 billion more in spending to escalate the war in Iraq and Syria, it seems fitting to consider Ron Paul’s explanation of how the Federal Reserve has helped finance US militarism.
On June 14, 2005, Paul, then a US House of Representatives member from Texas, summed up the Fed’s role — now spanning a century and counting — in US militarism. In his House floor speech “The Hidden Cost of War” Paul succinctly states:
The Federal Reserve was created in 1913, and shortly thereafter the Fed accommodated the Wilsonians bent on entering WWI by inflating and deficit financing that ill-begotten involvement. Though it produced the 1921 depression and many other problems since, the process subsequently has become institutionalized in financing our militarism in the 20th Century and already in the 21st. Without the Fed’s ability to create money out of thin air, our government would be severely handicapped in waging wars that do not serve our interests. The money issue and the ability of our government to wage war are intricately related. Anyone interested in curtailing wartime spending and our militarism abroad is obligated to study the monetary system, through which our government seductively and surreptitiously finances foreign adventurism without the responsibility of informing the public of its cost or collecting the revenues required to finance the effort.
Paul, the chairman and founder of the Ron Paul Institute for Peace and Prosperity, has a straightforward answer to the Federal Reserve’s enabling of US intervention and wars around the world: End the Fed.