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Randam Ron Paulism

Question: You wanna gut that safety net
Ron Paul: But the safety net doesn’t work.
Question: Tell me why it doesn’t work.
Ron Paul: It does work for some people, but overall it ultimately fails, because you spend more money than you have, and then you borrow to the hilt. Now we have to borrow $800 billion a year just to keep the safety net going. It’s going to collapse when the dollar collapses, you can’t even fight the war without this borrowing. And when the dollar collapses, you can’t take care of the elderly of today. They’re losing ground. Their cost of living is going up about 10%, even though the government denies it, we give them a 2% cost of living increase.
Question: So do you think the gold standard would fix that?
Ron Paul: The gold standard would keep you from printing money and destroying the middle class. Every country where you have runaway inflation, there’s no middle class. Mexico, there’s no middle class, you have a huge poor class, and a lot of wealthy people. Today we have a growing poor class, and we have more billionaires than ever before. So we’re moving into third world status…
Question: Who is the safety net that you’re speaking of, who does benefit from all those programs and all those agencies?
Ron Paul: Everybody on a short term benefits for a time. If you build a tenement house by the government, for about 15 or 20 years somebody might live there, but you don’t measure who paid for it: somebody lost their job down the road, somebody had inflation, somebody else suffered. But then the tenement house falls down after about 20 years because it’s not privately owned, so everybody eventually suffers. But the immediate victims aren’t identifiable, because you don’t know who lost the job, and who had the inflation, the victims are invisible. The few people who benefit, who get some help from government, everyone sees, "oh! look what we did!", but they never say instead of what, what did we lose. And unless you ask that question, we’ll go into bankruptcy, we’re in the early stages of it, the dollar is going down, our standard of living is going down, and we’re hurting the very people that so many people wanna help, especially the liberals…”

  —Ron Paul
 Interview by Mac McKoy on KWQW, December 17, 2007

FIO Focus, No. 63: Federal Reserve Requests Financial Data to Study Effects of …

MainHeader FIO Focus, No. 63: Federal Reserve Requests Financial Data to Study Effects of ...

On September 30, 2014, the Board of Governors of the Federal Reserve System (the Board) invited firms substantially engaged in insurance underwriting activities to participate in a voluntary data collection exercise known as a quantitative impact study (QIS). The results of the QIS will be used to analyze the impact of the Board’s regulatory capital framework on firms engaged in insurance activities and to allow further review of concerns that were raised by commenters during the Board’s rule-making process.

When the Board finalized its capital requirements for bank holding companies in July 2013, it exempted savings and loan holding companies (SLHC) with substantial insurance underwriting activity (insurance SLHC) from application of those rules. The idea was to provide the Board with more time to determine how capital and leverage rules should be modified for insurance SLHCs. According to the Board’s cover letter for the QIS, it wishes to better understand how to design a capital framework for insurance holding companies in light of the Collins Amendment to the Dodd-Frank Act. The letter explains that the Collins Amendment (§171 of the Dodd-Frank Act) requires the Board to establish minimum risk-based and leverage requirements for firms regulated by the Board that are no less than those that apply to insured depository institutions.

The QIS is a request for the voluntary submission of detailed financial data. According to the Board, the insurance holding companies that it supervises have been contacted about the QIS. The QIS itself is divided into four parts:

  • Part I: A section on regulatory capital components and ratios which calculate a common equity tier 1 capital ratio, a tier 1 capital ratio, a total capital ratio and a tier 1 leverage ratio
  • Part II: A calculation of risk-weighted assets
  • Part III: An analysis of separate account data
  • Part IV: A report of state or foreign risk-based capital requirements

The Board is requesting consolidated balance sheets prepared according to U.S. Generally Accepted Accounting Principles (GAAP). In the QIS instructions, the Board recognizes there will be challenges for entities that currently report only on a statutory accounting principles basis (SAP) or on some other non-U.S. GAAP basis. For example, the instructions make it clear that certain non-GAAP balances may have to be converted to GAAP amounts. The instructions acknowledge that this may present a challenge for many items on the balance sheet, including, for example, the valuation of certain intangible assets such as goodwill.

One of the items companies will report under Section IV will be the aggregate amount of state risk-based capital requirements for insurance underwriting activities.

Report submissions are requested by December 31, 2014, and submissions should be based on financial data as of December 31, 2013. Templates for submissions as well as instructions have been provided by the Board. The Board anticipates there will be additional follow up with the participating firms to better understand the submissions.

Without citing any specific authority, the Board indicated that “[D]ata and responses provided via the QIS will be used and maintained in a manner that is designed to preserve firm anonymity and confidentiality.” The Board stated that it may share the information with “other regulators” and that the information “may be published in aggregate form in a manner that preserves firm anonymity and data confidentiality in connection with the Federal Reserve’s supervisory or regulatory duties.”

Finally, one of the items is the estimated cost of developing U.S. GAAP- based consolidated reporting capability. In addition, the Board is seeking information about the cost of the initial implementation, the time required for a full conversion, the ongoing costs of such a conversion, including external audit fees, and any other information that would help the Board understand the effort necessary to establish U.S. GAAP-based consolidated reporting capability.


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