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Ron Paul on Budget & Economy

Republican Representative (TX-14); previously Libertarian for President


Fannie Mae and Freddie Mac should be auctioned off

Q: Gov. Rotwmney and Speaker Gingrich both acknowledge they made money from Fannie and Freddie. Should they return that money?

PAUL: That subject really doesn't interest me a whole lot. But the question is, what are we going to do about Fannie Mae and Freddie Mac. It should have been auctioned off right after the crash came. It would have been cleansed by now. It should have been sold. We know how the bubble came about. It was excessive credit, interest rates held too low, too long, the Federal Reserve responsible for that. The Community Reinvestment Act, which is Affirmative Action telling banks they have to make these risky loans. And at the same time, there was a line of credit which allowed Fannie Mae and Freddie Mac to, you know, make more money. And it was assumed that they would always be protected. I've talked a long time about cutting off that credit from the Fed. I was trying to prevent this stuff.

Source: CNN 2012 GOP primary debate on the eve of Florida primary , Jan 26, 2012

We're reversing 100 years of bad policy; audit the Fed

Q: You have actually sponsored 620 measures. Only four made it to a vote on the House floor, and only one has been signed into law.

PAUL: That demonstrates how much out of touch the US Congress is with the American people because I'm supporting things that help the American people. But as far as working with other groups, I think my record's about as good as anybody's because I work on the principle that freedom and the Constitution bring people together.

SANTORUM: One of the reasons people like Rep. Paul is his economic plan. But he's never been able to accomplish any of that.

PAUL: It's not exactly a simple task to repeal approximately 100 years of us sliding away from our republic. What about change in monetary policy? We've had that for 100 years. And right now we're winning that battle. The American people now agree. About 75% of the American people now say we ought to audit the Federal Reserve, find out what they're doing and who are their friends that they're bailing out constantly.

Source: Meet the Press 2012 GOP New Hampshire debate , Jan 8, 2012

Obama economic stances compared to Paul's

OnTheIssues' paperback book explores how Ron Paul's economic stances differ from Obama's, and where they are similar. We cite details from Paul's books and speeches, and Obama's, so you can compare them, side-by-side, on issues like these:

Ron Paul vs. Barack Obama on Economic Issues

Source: Paperback: Obama vs. Paul On The Issues , Jan 1, 2012

Destroying our currency transfers wealth to the rich

The middle class is suffering, but not only because we bail out the rich and dump on the poor and they lose their jobs and their houses. There's a characteristic about monetary policy. When a country destroys its currency, it transfers wealth from the middle class to the wealthy, and this is what you're seeing today: the elimination of the middle class. And it's going to get a lot worse unless we address overspending, over-borrowing, printing too much money, and understanding the business cycle.
Source: Yahoo's "Your Voice Your Vote" debate in Iowa , Dec 10, 2011

Let Italy fail; or we face 10-year recession

Q: Should we allow Italy to fail? Should we have a stake in what's going on in the eurozone right now?

PAUL: No, you have to let it liquidate. We've took 40 years to build up this worldwide debt. We're in a debt crisis never seen before in our history. The sovereign debt of this world is equal to the GDP, as ours is in this country. If you prop it up, you'll do exactly what we did in the depression, prolong the agony. If you do prop it up, you do what Japan has done for 20 years. So, yes, you want to liquidate the debt. The debt is unsustainable. And this bubble was predictable, because 40 years ago we had no restraints whatsoever on the monetary authorities, we had no restraints on the spending. And if you keep bailing people out and prop it up, you just prolong the agony, as we're doing in the housing bubble. We don't allow the market to determine what these mortgages are worth. If you don't liquidate this and clear the market, you're going to perpetuate this for a decade or two more.

Source: 2011 CNBC GOP Primary debate in Rochester MI , Nov 9, 2011

Let market determine interest rate, instead of Fed price-fix

Q: How does your tax plan help the economy?

A: If you want to get the economy going again, you have to get rid of price-fixing. And the most significant price-fixing that goes on, that gave us the bubble, destroyed the economy, and is preventing us fro coming out [of the recession], is the price-fixing of the Federal Reserve, manipulating interest rates way below market rates. You have to have the market determine interest rates if you want a healthy, viable economy.

Q: So you think the economy would be stronger if interest rates were higher right now?

A: You would have more incentive. You would take care of the elderly. They get cheated. They get nothing for their CDs. Why cheat them and give the banks loans at zero percent? And then they loan it back to the government at 3%. They are ripping us off at the expense of those on fixed incomes.

Q: Even though higher interest rates would make it much more expensive to borrow, mortgages.

A: What you want is the market to determine this.

Source: 2011 CNBC GOP Primary debate in Rochester MI , Nov 9, 2011

Go after crony capitalism; defend real capitalism

Q: Gov. Perry's critics in the state of Texas--you're a congressman from Texas--say he practices crony capitalism as governor. Are they right?

PAUL: I haven't analyzed it enough to call him a crony or not. But there is a lot of crony capitalism going on in this country. And that has to be distinguished from real capitalism, because this "Occupation" stuff on Wall Street, if you're going after crony capitalism, I'm all for it. Those are the people who benefit from contracts from government, benefits from all of the bailouts. They don't deserve compassion, they deserve taxation, or they deserve to have all their benefits removed. But crony capitalism isn't when somebody makes money and they produce a product. That is very important. We have to distinguish the two. And unfortunately, I think some people mix that. But this, to me, is so vital, that we recognize what capitalism is versus crony capitalism. When you have crony capitalism, and that's why we're facing this crisis today.

Source: 2011 CNBC GOP Primary debate in Rochester MI , Nov 9, 2011

1976: Let's put Uncle Sam on a diet; 2011: it's possible

Q: You had a billboard back years ago about the government and it said, let's put big government on a diet?

A: Right. We had a fat Uncle Sam, put big government on a diet.

Q: That was in 1976. Things not only haven't changed, they have gotten dramatically worse. You've come up with a plan to cut $1 trillion. How fast can you do it & where would that money come from?

A: Of course, it all depends on the people's understanding and the Congress willing to go with this. But you could do it at one time. People say, well, it's impossible to do this. But we had a pretty good history of slashing spending after World War II. We brought 10 million people home and we slashed spending by more than 50% in cut taxes and the economy was revived. I was concerned in the '70s because I thought the situation was set-up because of the change of the monetary system, that it would lead to endless spending and endless debt and that's where we are.

Source: Sean Hannity 2012 presidential interviews "Hannity Primary" , Oct 24, 2011

Don't bail out banks; bail out homeowners

Q: [to Cain]: Regarding "Occupy Wall St.", you said, "Don't blame Wall Street, don't blame the big banks. If you don't have a job, and you're not rich, blame yourself." Do you still say that?

CAIN: Yes, I do still say that. They might be frustrated with Wall Street and the bankers, but they're directing their anger at the wrong place. They ought to be over in front of the White House taking out their frustration.

PAUL: I think Mr. Cain has blamed the victims. There's a lot of people that are victims of this business cycle. We can't blame the victims. I'd go to Washington as well as Wall Street, but I'd go over to the Federal Reserve. The bailouts came from both parties. The banks were involved, and the Federal Reserve was involved. But who got stuck? The middle class got stuck. They got stuck. They lost their jobs, and they lost their houses. If you had to give money out, you should have given it to people who were losing their mortgages, not to the banks.

Source: GOP 2011 primary debate in Las Vegas , Oct 18, 2011

Auditing the fed revealed $5T loaned to foreign banks

Q: [to Bachmann]: Do you think it's right that no Wall Street executives have gone to jail for the damage they did to the economy?

BACHMANN: It was the federal government that pushed the subprime loans. They pushed the banks to meet these rules. We had artificially low interest rates. We had lending standards lowered for the first time in American history.

PAUL: We have made some inroads on the Federal Reserve. Last year, we got a partial audit of the Fed. We've learned a whole lot. They were dealing with $15 trillion, [of which] $5 trillion went overseas to bail out foreign banks. But we're getting to the bottom of it. If you want to understand why we have a problem, you have to understand the Fed, because the cause comes from the business cycle. We shouldn't be asking what to do exactly with the recession--obviously we have to deal with that--but you can't cure the disease if you don't know the cause of it. And the cause is the booms. When there are booms, and they're artificial, , they burst.

Source: 2011 GOP debate at Dartmouth College, NH , Oct 11, 2011

Housing bubble was predictable; we had too many houses

Q: Would you get the federal government out of housing?

PAUL: Absolutely. I mean, there's no need to.

Q: No Freddie Mac, no Fannie Mae, nothing?

PAUL: No, that's where the distortions come. That's where the moral hazard & mal-investment come from. It was predictable. Unfortunately we've been living with Keynesian economics for many, many decades, and everybody who was right about predicting the bubbles were the Austrian economists. They said they were coming. And yet they're also saying--and I agree with them--that everything that we're doing right now is wrong. So what we did with the housing bubble, yes, we had too many houses. It was glaring in our face. The bubble was doomed to burst, and it came because of Fannie Mae, Freddie Mac, easy credit, and also the Community Reinvestment Act. So who got into trouble? Wall Street got the bailout. The middle class lost their jobs. They lost their houses. This whole system is all messed up.

Source: 2011 GOP debate at Dartmouth College, NH , Oct 11, 2011

We spend $1.5T on wars; start by cutting there

Q: If you were president, would you repeal prescription drug benefits for seniors under Medicare?

PAUL: Well, we shouldn't have ever started it. I voted against it. But that sure wouldn't be high on my list. I would find a lot of cuts a lot of other places. We spend $1.5 trillion overseas in wars that we don't need to be in and we need to cut there, and then put this money back into our economy here. And that is the only way to achieve it. Then it still wouldn't be enough in order to get some people out. What we need to do is cut the Department of Education, the Department of Energy, and all these departments, and get rid of them. Then we can do it.

Source: 2011 GOP Tea Party debate in Tampa FL , Sep 12, 2011

1980s had huge deficits, despite Reagan's message

PERRY: You wrote a letter to Ronald Reagan and said I'm going to quit the party because of the things you believe in.

PAUL: I strongly supported Ronald Reagan. I was one of four members of Congress from Texas that supported Reagan in '76. And I supported him all along, and I supported all his issues and all his programs. But in the 1980s, we spent too much, we taxed too much, we built up our deficits, and it was a bad scene. Therefore, I support the message of Ronald Reagan. The message was great. But the consequence, we have to be honest with ourselves. It was not all that great. Huge deficits during the 1980s, and that is what my criticism was for, not for Ronald Reagan's message. His message is a great message.

Source: 2011 GOP debate in Simi Valley CA at the Reagan Library , Sep 7, 2011

Country is bankrupt & we can't keep spending

Q: When Standard & Poor's downgraded the country's credit rating last week, they cited gridlock in Washington.

PAUL: Well, S&P didn't downgrade it because [Congress] couldn't come to a conclusion. They couldn't come to a conclusion because they didn't know what was going on. The country's bankrupt, and nobody wanted to admit it. And when you're bankrupt, you can't keep spending. And all these proposed cuts weren't cuts at all. What you have to do is restore sound money. You have to understand why you have a business cycle, why you have booms and busts. If you don't do that, there's no way you can solve these problems. And the booms and busts comes from a failed monetary system that--the interest rates that are way lower than--than they should be encourages malinvestment and debt. And to get out of that, all this other tinkering, you cannot do that unless you liquidate debt. You don't bail out the people that are bankrupt and dump the debt on the people. That is what's happened.

Source: Iowa Straw Poll 2011 GOP debate in Ames Iowa , Aug 11, 2011

Bailout confiscates productive money for failing companies

Congressman Ron Paul of Texas, for instance, gave a simple but important critique of the bailouts:

In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones. By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use. An essential element of a healthy free market is that both success and failure must be permitted to happen when they are earned. But instead with a bailout, the rewards are reversed--the proceeds from successful entities are given to failing ones. It is obvious to most Americans that we need to reject corporate cronyism, and allow the natural regulations and incentives of the free market to pick the winners and losers in our economy, not the whims of bureaucrats and politicians.

Source: Obamanomics, by Timothy P. Carney, p.134 , Nov 30, 2009

Economic crisis demonstrates that Fed must come to an end

The Fed has one power that is unique to it alone: it enables the creation of money out of thin air. Sometimes it makes vast new amounts. Sometimes it makes lesser amounts. The money takes a variety of forms and enters the system in various ways. And the Fed does this through techniques such as open-market operations, changing reserve ratios, and manipulating interest rates, operations that all result in money creation.

We are talking about an awesome power. It is the power to weave illusions that appear real as long as they last. That is the very core of the Fed's power.

Of course not everyone is instinctively against this illusion-weaving power, and many even welcome it. Tragically, the innocent who understand little about the complexity of the monetary system suffer the most, while those who are in the know reap great profit whether the market is going up or down.

Source: End the Fed, by Rep. Ron Paul, p. 2-3 , Sep 16, 2009

Security or growth: you can't have both

As bank customers, we tend to believe that we can have both perfect security for our money, drawing on it whenever we want and never expecting it not to be there, while still earning a regular rate of return. In a true free market, however, there tends to be a tradeoff: you can enjoy a money warehouse or you can hope for a return on your investment. You can't usually have both. The Fed, however, by backing up this fractional-reserve system with a promise of endless bailouts and money creation, attempts to keep the illusion going.

Even with a government guarantee, the system is always vulnerable to collapse at the right moments, namely, when all depositors come asking for their money. Banking legislation can be seen as an elaborate attempt to patch th holes in this leaking boat. Thus have we created deposit insurance, established the "too big to fail" doctrine, created schemes for emergency injections, and all the rest, so as to keep afloat a system that is inherently unstable.

Source: End the Fed, by Rep. Ron Paul, p. 17-18 , Sep 16, 2009

Wall Street is dumping its trouble onto Main Street

Q: Pres. Bush said about the $700 billion financial bailout bill, “The risk of doing nothing far outweighs the risk of the package.” So, what do you say?

A: That’s a mistake because we don’t have the money. But that doesn’t mean you have to do nothing I mean, we could reform the system. We could return to sound money. We could balance our budget. There’s a lot of things that we can do. But the worst thing that we can do is perpetuate the bad policies that gave us this trouble in the first place. And that is that we no longer, over the last quite a few decades, believed in free-market capitalism.

Q: But what the Treasury secretary, the chairman of the Federal Reserve, the president--what they’re saying is, this is no longer simply a bailout of these huge Wall Street firms. This is a bailout of Main Street, because people’s life savings.

A: No, you could look at it the other way. This is Wall Street in big trouble and sucking in Main Street, now, and dumping all the bills on Main Street.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer , Sep 21, 2008

Mortgage & Financial Institutions Trust: more of the same

Q: Sen. McCain said about the $700 billion financial bailout bill, “I will lead in the creation of the Mortgage and Financial Institutions Trust, the MFI. The MFI is an early intervention program to help financial institutions avoid bankruptcy, expensive bailouts and damage to their customers.” Is he on to something?

A: Hardly. I mean, it’s just more of the same, more government, more programs, more spending, more regulations, trying to prop up a system that has been undermined. The market is saying it’s nonviable, and everything they’re doing is trying to patch it up. The bubble has been blown up. It needs to deflate, and they won’t allow it. So it’s a contest between deflation and inflation. Everybody in Washington wants to inflate because it’s painful to get off this dependency on perpetual deficit spending and inflation. So, no -- this is sticking it to Main Street and sticking it to the taxpayer.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer , Sep 21, 2008

There’s payback for guns and butter

There’s payback for guns and butter. In the ‘70s when I was motivated first to run for Congress, I realized it wasn’t going to last because that is when the gold standard finally lost its last wing. We ushered in the ‘70s and they were tough. High unemployment rates, interest rates of 21%, high inflation rates. But we did pay back. We paid back for all the spending of the Democrats in the ‘60s...guns and butter. Now we are starting to pay for the guns and butter and we don’t even see an end to it.
Source: Speeches to 2008 Conservative Political Action Conference , Feb 7, 2008

Great nations and empires end for financial reasons

The Constitution says: no emitting bills of credit, no paper money, only gold and silver can be legal tender. And today we allow big government to grow. Whether it’s on the conservative side or the liberal side, if they want something, they usually have compromise--spend it on both. Then they resort to printing money, and that is where our trouble is coming from, and that’s the crisis we’re facing. All great nations and great empires end for fiscal, financial reasons. That’s how the Soviet system was defeated. We didn’t have to invade them; we didn’t have to fight them. Their system collapsed. And that is what’s happening today, the middle class is getting wiped out, the middle class is getting poor, endlessly, because they can’t keep up with the cos of living. And the solution isn’t printing more money, and spending more money, and allowing the Federal Reserve to pretend they can solve the problem. The answer is found in fiscal conservatism: live within our means, is what we have to do.
Source: Speeches to 2008 Conservative Political Action Conference , Feb 7, 2008

Live within our means and start paying down the deficit now

We’re told that this war is going to go on for a long, long time. That means that the next generation--the burden is being placed on these young people. That is why the college kids are coming out. Because they’re getting ripped off. We have undermined their liberties, we’re giving them a foreign policy where it’s their lives on the line, the threat of a draft is coming for men and women as this war is likely to spread--and what are they inheriting? Less freedom and a lot of debt! Entitlements up to 60 trillion dollars and they can’t pay it. A group of young people going into the work force which is smaller than the ones who are in retirement. The baby boomers are retiring and they’re going to demand what they put into the system and it’s just not there. What we need to do is not only live within our means, but start paying down the deficit, and offer an opportunity at least for the next generation to get out.
Source: Speeches to 2008 Conservative Political Action Conference , Feb 7, 2008

Stimulus package means more printing & devaluing the dollar

What is the bailout package all about? Our side of the aisle proposes it and the Democrats want to increase it.$150 billion? No, let’s up it $200 billion! Where does it come from?--the government has no money. Well, can we tax people?--no, you can’t tax anymore. What are they gonna do?--they’re gonna print the money, devalue the dollar, & that’s the problem we have. The dollar is low, prices are high, the people are suffering, the middle class is shrinking. So we offer the same old pabulum, the same old baloney, and then we turn around and say, “Well, why don’t we ask the Federal Reserve to create more money? Nobody seems to have enough money. If we just had more money, maybe it would prop up the stock market.” So we go to the Federal Reserve and say we need more money. So they crank it out. You can’t lower interest rates unless you print more money. So they lower interest rates dramatically, like never before. So we’re in a bind, we’re in a fix, and I’ll tell you what: we overspend. Everywhere!
Source: Speeches to 2008 Conservative Political Action Conference , Feb 7, 2008

Economic Revitalization Plan: “Prescription for Prosperity”

    “Prescription for Prosperity”: The Four-Point Plan
  1. Tax Reform: Reduce the tax burden and eliminate taxes that punish investment and savings, including job-killing corporate taxes. Eliminate taxes on dividends and savings. Repeal the death tax. Cut taxes for working seniors. Eliminate taxes on social security benefits. Accelerate depreciation on investment. Eliminate taxes on capital gains. Eliminate taxes on tips.
  2. Spending Reform: Eliminate wasteful spending. Reduce overseas commitments. Freeze all non-defense, non-entitlement spending at current levels.
  3. Monetary Policy Reform: Expand openness at the Federal Reserve and require the Fed to televise its meetings. Return value to our money.
  4. Regulatory Reform: Repeal Sarbanes/Oxley regulations that push companies to seek capital outside of US markets. Stop restricting community banks from fostering local economic growth.
Source: 2008 House campaign website, www.RonPaul2008.com, “Plan” , Feb 3, 2008

We’re worse off than in 2000, due to Bush & Congress

Q: Are we better off than we were eight years ago?

A: No, no, we’re not better off. We’re worse off, but it’s partially this administration’s fault and it’s the Congress. But it also involves an economic system that we’ve had for a long time and a monetary system that we’ve had and a foreign policy that’s coming to an end and we have to admit this. The Republicans were elected in 1994 to change direction of the country, because people sensed there was something wrong, we were going the wrong direction, but we didn’t do anything. We were elected in the year 2000 to have a humble foreign policy and not police the world, and yet what are we doing now? We’re bogged down in another war. We’re bankrupting our country and we have an empire that we’re trying to defend which costs us $1 trillion a year. And the standard of living is going down today. It’s going down and the middle class is hurting because of the monetary policy. When you destroy a currency, the middle class gets wiped out.

Source: 2008 Republican debate at Reagan Library in Simi Valley , Jan 30, 2008

The people, not government, are supposed to run the economy

The Constitution is very clear that the president is commander in chief of the military, but the president is not the commander in chief of the economy or of the people. When we get reflection of conventional wisdom, but of a lot of lack of understanding of how the economy works. The president is not supposed to manage and run the economy. The people are supposed to do this. The government is supposed to give them sound money, low taxes, less regulation. The people are supposed to run it.
Source: 2008 Republican debate at Reagan Library in Simi Valley , Jan 30, 2008

Economic stimulus ok, but not via spending & printing money

Q: The president’s economic stimulus plan would send out 116 million checks to American homes. Should government have any role at all in stimulating the economy like this?

A: Well, sure, indirectly. They shouldn’t stimulate it by interfering in the market rate of interest. That’s where our basic problem comes from. And when you do that, you get into these problems, and then everybody wants to solve the problem by printing more money and spending more money and asking the Federal Reserve to, you know, lower interest rates. And that just makes the problem that much worse. The government does have a responsibility: to lower taxes, get rid of regulations, and devise a monetary policy that makes some sense. But to continue to say that we just appropriate more money, which is more deficit, and then expect us either to borrow it or expect the Federal Reserve to monetize it, it makes our problems worse.

Source: 2008 GOP debate in Boca Raton Florida , Jan 24, 2008

Dollar crashing due to trillions spent on maintaining empire

Look at what’s happening today. The dollar is crashing. [Our debate moderator] suggests that we think of the economy, but not in foreign policy. You can’t do that. They’re one and the same. That’s where all the money’s going. We’re spending nearly a trillion dollars a year overseas maintaining this empire.

And then there’s never been a war fought without inflation and destruction and devaluation of a currency. And this is what we’re doing today to ourselves, is we’re literally spending ourselves into oblivion.

But nobody here is willing to even suggest that we cut something overseas. But we have to. We don’t need to cut anything here at home. I’d like to see things frozen. I’d like to see massive tax cuts. But we need deregulation.

So this is the kind of thing we need. We need the government out of the way, but it should have sound money, low taxes, less regulations, and a sensible policy where we’re not wasting our money overseas.

Source: 2008 GOP debate in Boca Raton Florida , Jan 24, 2008

Waving a flag the whole time on spending

I was waving a flag the whole time saying, slow up, slow up; this isn’t going well. And here we are. We’re at the verge of bankruptcy. We’re moving into a new era, believe it or not. With the dollar and our economy and the world economy, this is a new era.
Source: 2008 GOP debate in Boca Raton Florida , Jan 24, 2008

Give up American empire; that reduces debt without sacrifice

Q: What sacrifices would you ask Americans to make to lower the country’s debt?

A: I think it’s absolutely unnecessary to sacrifice. It’s unnecessary. We can cut by looking at our foreign policy. We maintain an empire which we can’t afford. We have 700 bases overseas. We are in 130 countries. We cut there, and then we have a better defense of this country, and the people get that money and they get to spend it here at home. There’s no need to sacrifice.

Source: 2007 Des Moines Register Republican debate , Dec 12, 2007

Restore GOP by returning to less gov’t & fiscal conservatism

Q: What are you going to do to recover the lost ground for the Republican Party, especially with Hispanics?

A: You know, if anybody votes for the Republican Party, they’re voting for conservative values. They’re voting for less government, not more government. In the last seven years, we’ve gotten a lot more government. You know, in the year 2000, we ran on a pro-peace policy. We were condemning Clinton for warmongering, for nation-building and policing the world. And we did exactly the opposite. Now we’re mired down in the Middle East. America should be pro-peace, not pro-war. The war has created so much expenditures. We’re spending our money overseas instead of here. We’re neglecting our needs here. We’re bombing and building bridges overseas and we’re neglecting our bridges here at home. We’re supposed to be the fiscal conservatives. We’re not. This is why we lost the election last year, is because we didn’t stand by our principles of pro-peace and pro-liberty and pro-America.

Source: 2007 Republican primary debate on Univision , Dec 9, 2007

Weak economy is source of resentment against immigrants

Q: Four out of five Hispanics are either legal residents or American citizens. Many of them feel affected by the negative tone of the immigration debate. What would you do to curb this anti-Hispanic sentiment?

A: We have to realize where the resentment comes from. I believe it’s related to our economy. When the economy is weakening and there’s resentment because of our welfare system; jobs are going overseas; pay is going down. There’s a lot of resentments because the welfare system is based on mandates from the federal government to put pressure on states like Florida and Texas to provide services which the local taxpayers resent. Some of our hospitals are closing. So it’s an economic issue, too. If we deal with the welfare state and a healthy economy and sound money and all this wasteful spending overseas, we would have a healthy economy; I think this problem would be greatly reduced.

Source: 2007 Republican primary debate on Univision , Dec 9, 2007

Can’t legislate economic fairness; so make government small

You can’t legislate economic fairness, like so many want to do. Freedom means freedom. It means the government should be very small.

So, we need to decide what we’re gonna do. Are we going to live within the law, or are we going to pretend the government can take care of everything possible? We are now nine trillion dollars in debt, we have a dollar that’s crashing, and we keep financing this by taxing, borrowing, and then, what do we resort to? We resort to printing the money!

We should look to the Constitution. We should make sure that we get rid of our central bank, the Federal Reserve, and have only gold and silver as legal tender. This is the reason our government gets so big, because we give them license to steal, license to inflate, license to tax, and license to borrow, and politicians will always do it.

Source: 2007 GOP Values Voter Presidential Debate , Sep 17, 2007

Prioritize spending based on Constitution--and lower it too

Real conservatives have always supported low taxes and low spending. But today, too many politicians and lobbyists are spending America into ruin. We are nine trillion dollars in debt as a nation. Our mounting government debt endangers the financial future of our children and grandchildren. If we don’t cut spending now, higher taxes and economic disaster will be in their future--and yours.

In addition, the Federal Reserve, our central bank, fosters runaway debt by increasing the money supply-- making each dollar in your pocket worth less. The Fed is a private bank run by unelected officials who are not required to be open or accountable to “we the people.”

We cannot continue to allow private banks, wasteful agencies, lobbyists, corporations on welfare, and governments collecting foreign aid to dictate the size of our ballooning budget. We need a new method to prioritize our spending. It’s called the Constitution of the United States.

Source: 2008 House campaign website, www.ronpaul2008.com, “Issues” , Sep 1, 2007

Government out of regulating economy & out of our bedrooms

The government should be out of regulating the economy. I think the monetary issue is important. I don’t believe government should be able to print money out of thin air to pay their bills because that causes a lot of problems. The government should be out of our bedrooms. I don’t think they should be regulating any personal behavior if it’s non-violent. That means we have to tolerate people who do things that sometimes are dumb and sometimes are irritating, but in a free society you tolerate that.
Source: Jill Morrison on KUHF, Houston Public Radio , Jan 17, 2007

Oil prices rise in part because of the weak dollar

If you look at the price of oil in the last 10 years, if you look at it in terms of dollars, it went up 350 percent. If you look at it in euros, it went up about 200 percent. If you look at it in the price of gold, it stayed flat. It’s the inflation, it’s the printing of money, it’s the destruction of the value of the dollar. Added on to this, the notion that we go to protect our oil. Oil was $27 when we went over there to get the oil and protect the oil and take the oil from Iraq There’s less than about half the production now in Iraq right now. And we’re threatening Iran. And that pushes prices up. It pushes up the concept of supply and demand. But you can’t deal with the price of oil without dealing with the supply and demand of dollars. When you devalue the dollar--and the dollar is going down every day. The further the dollar goes down, the higher the prices of oil are going up. We have to understand that.
Source: 2008 Facebook/WMUR-NH Republican primary debate , Jan 5, 2006

We can’t afford a trillion-dollar war in Iraq

We’re fighting a trillion-dollar war and we shouldn’t be doing it. Those resources should be spent back here at home. There is an inflationary factor. We can’t afford it. We do have good medical care, but the costs are so high now that our people in this country are actually going to India & getting their heart surgery done. They pay the plane ticket, the hospital and the hotel and they get it for half-price. So it’s inflation, but if you don’t understand how inflation comes, we can’t solve this problem. It comes from deficit financing with this war-mongering foreign policy we have. We run up the deficits. We tax. We borrow from the Chinese. We can’t borrow enough. Then what do we do? We print the money, and then you wonder where the inflation comes. The value of the dollar is down and the prices go up, where the government gets involved in things like housing or medical care or education, prices are skyrocketing. You have to deal with the monetary issue to solve the problem of the medical issue.
Source: 2008 Facebook/WMUR-NH Republican primary debate , Jan 5, 2006

Maintaining American empire diminishes dollar

The day is approaching when we no longer will be able to afford the burden of foreign intervention. For now governments are willing to loan us the money needed to finance the cost of worldwide military operations. It may seem possible because we have bee afforded the historically unique privilege of printing the world’s reserve currency. Economic law eventually will limit our ability to live off others by credit creation. Eventually trust in the dollar will be diminished, if not destroyed. Those who hold these trillion plus dollars can hold us hostage if it’s ever in their interest.

That’s when the true wealth of the country will become self-evident and we will no longer be able to afford the extravagant expense of pursuing an American empire. No nation has ever been able to finance excessive foreign entanglements and domestic entitlements through printing press money and borrowing from abroad.

Source: House speech, in Foreign Policy of Freedom, p.285 , Jun 3, 2004

We’ve come to accept debt, wealth confiscation, & big gov’t

We have been conditioned to accept debt as part of every aspect of our lives. The short-term benefit of government borrowing is a political expediency that, in spite of the rhetoric of the balanced budget, is growing ever more popular.

Sadly, we rarely hear serious proposals for limiting the role of government to that of protecting liberty.

In the 20th century we have come to accept demands and needs as rights at the expense of someone else’s rights. Responsibility for our own acts and livelihood has been replaced by lawsuits demanding unrealistic settlements.

Government has come to mean something entirely different than what was intended by the writers of the Constitution. It is an entity capable of confiscating and distributing wealth ad infinitum. Government no longer serves the people by guaranteeing equal rights to all. Government is now expected to provide profits, medical care, jobs, homes, and food whenever the people demand these benefits as a right.

Source: Freedom Under Siege, by Ron Paul, p. 2 , Dec 31, 1987


Ron Paul on Federal Reserve

I'm delighted that auditing the Fed has become mainstream

Q: [to Gingrich]: You call for auditing the Fed and stripping it of its banking powers. But Rep. Paul thinks the Fed needs to be abolished to create lasting prosperity. Why is the Fed worth saving?

GINGRICH: Well, I think that having some kind of central bank is an important part of how you deal with monetary policy in the modern world. I think that it is a scandal that the Federal Reserve is secret. And I think, frankly, their monetary policy since the late 90s has been a major factor in the economic pain we're now going through.

Q: [to Paul]: Is Speaker Gingrich wrong to want to save the Fed? PAUL: Not exactly. Because my position isn't that I'd closed the door down immediately, you can phase it out. But there are some other things that we could do in a transition phase. For instance, and I'm delighted that mainstream is catching up with this, these days, for auditing the Fed. This is great.

Source: Iowa Straw Poll 2011 GOP debate in Ames Iowa , Aug 11, 2011

If we want to cure the bust, don't create the boom

The Fed aims for even lower interest rates by creating trillions of dollars of new money, all while increasing spending and debt. Grade-school math can show you why this won't work. Over the decades, Keynesianism has generated a false confidence--a moral hazard of immense proportion. The Federal Reserve & Congress have systematically taught the American people to trust the government and that caution in spending is harmful to the economy. All the mistakes of the past decades are now clearly revealing themselves. And yet, since Washington has not changed its ways in the slightest, the needed corrections will be long in coming. If blame is to be placed for the mess we're in, don't just pick on George Bush and Barack Obama. Blame Lord Keynes and all his followers who rejected the business cycle. It is bad theory that is the root of the problem. Simply put: If we want to cure the bust, don't create the boom. Economic growth must be based on real factors, not phony stimulus provided by the central bank.
Source: Liberty Defined, by Rep. Ron Paul, p. 27 , Apr 19, 2011

Fed has ominous power with no oversight & no control

In 1980, I expressed my concern to Fed Chairman Volcker that reserve requirements could be lowered to zero and the Federal Reserve could buy any asset, including foreign debt.

Volcker assured me he would never lower reserve requirements to that degree or buy up worthless assets; just the authority to have free rein in raising reserve requirements at will. I said that, although I didn't expect that he would use these extreme powers, who knew if in the future we might just have someone who would. The future is now here.

The fact is that not only has this come to pass with Bernanke, but a great deal more authority has been usurped by Fed, while Congress says little about it. The Fed today has ominous powers that Congress barely understands. There is essentially no oversight, no audit, and no control. And the Federal Reserve chairman has no obligations to answer questions. Trillions of dollars can be created and injected into the economy with no obligation by the Fed to reveal who benefits.

Source: End the Fed, by Rep. Ron Paul, p. 48-50 , Sep 29, 2010

All bets are off if a cataclysmic dollar devaluation occurs

The welfare programs will end overnight if you have a cataclysmic devaluation of the dollar, and all bets are off on what will happen under those conditions, if you look at history. There’s no reason why we have to pay for the defense of Japan, Korea, an Europe--we’re going broke! And if we do that, if we do that, we literally can take care of our people and work our way out of this. If we had our freedoms, and we had the responsibility to care for ourselves, and we had sound money, within a year or two we’d be back on our feet again. But the most important issue is to make sure that we have our liberties. Understanding what private property means, understanding what sound money is all about, and also understanding what national sovereignty means. Once again we ought to be protecting our borders and not allowing this North American Union to come into effect.
Source: Speeches to 2008 Conservative Political Action Conference , Feb 7, 2008

We owe foreigners $2.7 trillion and more printing won’t do

We as conservatives have drifted a long way from the positions that we used to hold of limited government. We have to talk about what conservatives stand for and should be doing, because we’re going in the wrong direction. There’s not a whole lot of time left. If we continue what we’re doing we’re going to have a financial crisis, because you can’t continue to spend too much. Because there’s limit on how much you can tax, and we’re taxed to the hilt. Then there’s a limit to how much borrowing we can do, and we’re borrowing to the hilt. We’re dependent on China, and Saudi Arabia, and all these countries because we are the greatest debtor in the whole world today. This is different than the 1970’s when we had to pay for guns and butter. Today we’re paying for guns and butter again, but today our good jobs are overseas, we owe 2.7 trillion dollars, the whole country is in debt and what do we do now when we need more government? We print more money.
Source: Speeches to 2008 Conservative Political Action Conference , Feb 7, 2008

Federal Reserve creates money and prints it out of thin air

Q: Does the federal government have a role in stimulating the economy?

A: Yes, by lower taxes and less regulation. They could do a whole lot by having sound money, where we don’t print the money out of thin air. That causes the business cycle. That causes your bubbles. We’re always dealing with the symptoms of the disease & never saying, “how did this come about?” It comes about because we have a Federal Reserve that creates money & prints it out of thin air. There is a lot of malinvestment. That’s the most important thing to understand about the inflation of the monetary system, is the malinvestment. Then, later on, people suffer. You wipe out the middle class. But the evil of it all is the vehicle for financing wars that we shouldn’t be in and a welfare state that we shouldn’t be doing. So, yes, we have a role to play, but it’s a negative role. We want the people to be free. We don’t want to manage the people and tell them how to live.

Source: 2008 Republican debate at Reagan Library in Simi Valley , Jan 30, 2008

Lower interest rates CAUSED housing bubble & can’t solve it

The housing market’s already in depression and a lot of people are hurt and the standing of living in this country is going down. Look at what’s happening to the dollar.

And what is being offered? Lower interest rates. Well, lower interest rates is the problem. Artificially low interest rates is the artificial stimulus which causes the bubble, which allows the inevitable recession to come.

We need to deal with monetary policy and not pretend that artificial stimulus by more spending is going to help.

Source: 2008 GOP debate in S.C. sponsored by Fox News , Jan 10, 2008

The longer the Fed delays recession, the worse the recession

I believe we’re in a recession. I think it’s going to get a lot worse if we continue to do the wrong things that we’ve done in the past. You have to understand that over-stimulation in an economy by artificially low interest rates by the Federal Reserve is the source of the recession.

The recession has been predictable. We just don’t know exactly when it will come. If you do the wrong thing, it’s going to last for a long time. The boom period comes when they just pour out easy credit and it teaches people to do the wrong things. There’s a lot of malinvestment, debt that goes in the wrong direction, consumers who do the wrong things, and businessmen who do the wrong thing.

So we have to attack this and understand the importance of Austrian theory of the business cycle. If you don’t, we’re going to continue to do this and the longer you delay the recession, the worse the recession is, and we’ve delayed a serious recession for a long time.

Source: 2008 GOP debate in S.C. sponsored by Fox News , Jan 10, 2008

Maintain the value of the dollar, unlike Federal Reserve

If you’re really serious about protecting people’s incomes, you’ve got to consider how you’re going to protect the dollar. If you don’t have the dollar maintaining its value, no matter where you put the money you’re not going to have any value.

That’s where the crisis [in Social Security] is coming. You’re going to go up with all these cost of living increases but you’ll never keep up with the cost of living because the dollar’s going down, the cost of living is going up.

Our dollar today is worth 4 cents compared to the dollar of 1913, when the Federal Reserve took charge of it. And if you don’t deal with the dollar there will be no retirement for anybody. We’re going to have chaos.

And that is why you have to cut spending. That’s why we need a new foreign policy. We need to tie it to people over here in this country. That’s the only way we can solve the problem.

Source: 2007 GOP primary debate in Orlando, Florida , Oct 21, 2007

Monetarism is unworkable; feds cannot control money supply

The obvious failure of the discretionary monetary system has prompted the popularization of monetarism in recent years. This is the view that the federal government should manage the nation's money system and supply, increasing the number of dollars each year by between 3% and 5%. The monetarists share our view that the Federal Reserve's discretionary policy of the last several decades has been the cause of our inflation. However, we are confident that the monetarist solution is unworkable. Since October of 1979, the Federal Reserve has directed its attention to regulating the money supply and has abandoned its traditional intense concentration on manipulation of interest rates. Yet we now are witnessing more erratic movement in the money supply (and interest rates) than ever before.
Source: The Case for Gold, by Ron Paul, p. 11 , Jul 1, 1982

Friedman monetarist policy is better, but still inflationary

Another outrage associated with inflation is the endorsement of the process by most economists. Even the monetarists endorse sustained inflation, albeit at a lesser rate than is presently the case. The best-known monetarist, Dr. Milton Friedman, says the Fed should expand the money supply at 3% to 5% a year; the growth of the money supply is to coincide with economic growth. The actual figure being less important that the absence of fluctuations.

But even this amount of inflation inevitably introduces malinvestment as those getting the new money put it to uses that only later recessions show to have been unproductive. The Friedman approach may produce milder booms and recessions, but it nevertheless is inflationary and a product of the old discredited idea that government, rather than the market, should be planning the economy.

The politicians and many bankers, union leaders, businessmen, and bureaucrats who profit from inflation are glad, of course, to have the intellectuals justify their fraud.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 37-38&43 , Dec 31, 1981


Ron Paul on Gold & Currency

Paper money in unconstitutional; only gold is legal tender

The authors of the Constitution were very much aware of the dangers of inflation and the need for commodity money.

The Constitution is clear about no paper money. Only gold and silver were to be legal tender. Since the states caused themselves harm whe they issued their own paper money, the states were prohibited as well from issuing paper currency in Article I, Section 10. So there you have it, plain and simple: paper money is unconstitutional, period.

The Constitution is silent on the issue of a central bank, but the Tenth Amendment is quite clear: if a power is not "delegated to the United States," it doesn't exist. There is no mention whatsoever of a central bank being authorized. Even is a central bank were permissible, it could not legally repeal the legal tender mandate for gold and silver coins.

Because of the runaway inflation of the continental dollar in the 1780s and the Founders' disdain for paper, no paper money was officially issued by the US government until the Civil War.

Source: End the Fed, by Rep. Ron Paul, p.165-166 , Sep 29, 2010

Reagan was very sympathetic to the gold standard

Q: Would Reagan endorse you? And if so, why?

A: I supported Reagan in 1976, and there were only four members of Congress that did. And also in 1980. Reagan came and campaigned for me in 1978. I’m not sure exactly what he would do right now, but I do know that he was very sympathetic to the gold standard, and he told me personally that no great nation that went off the gold standard ever remained great. And he was very, very serious about that So he had a sound understanding about monetary policy. And for that reason, I would say look to Reagan’s ideas on money because he, too, was concerned about runaway inflation and what it does to a country when you ruin the currency. That’s what’s happening today. The dollar is going down and our country is going to be on the ropes if we don’t reverse that trend.

Source: 2008 Republican debate at Reagan Library in Simi Valley , Jan 30, 2008

We spend too much, tax too much, & print too much money

Q: Does our country’s financial situation creates a security risk?

A: It’s absolutely a threat to our national security because we’ve spent too much, we tax too much, we borrow too much, and we print too much. When a country spends way beyond its means, eventually it will destroy the currency, and we’re in the midst of a currency crisis. Our dollar is going down rapidly as we speak. It’s because we have lived beyond our means. We can’t afford the foreign policy that we have. We have to cut back. We have to live within our means. If we’re going to spend money, we ought to spend it at home, and that is why we have to change this foreign policy. We can’t afford it to do what we’re doing today because it will destroy our dollar.

Source: 2007 Des Moines Register Republican debate , Dec 12, 2007

Currency inflation counterfeits prosperity & destroys poor

Q: Is there any downside to this amazing bonanza in the hedge fund & the private equity firms?

A: Yes. I think this is not a consequence of free markets. What’s happening is there’s transfer of wealth from the poor and the middle class to the wealthy. This comes about because of the monetary system that we have. When you inflate a currency or destroy a currency, the middle class gets wiped out, so the money gravitates to the banks and to Wall Street. See, that’s why you have more billionaires than ever before. Today this country is in the middle of a recession for a lot of people. Poor people know about it. The middle class knows about it. Wall Street doesn’t know about it. Washington, D.C., doesn’t know about it. We’re depending on the creation of money out of thin air, which is nothing more than debasement of the currency. It’s counterfeit. And it is a natural, predictable consequence that you’re going to have people benefit from it and other people suffer.

Source: 2007 Republican debate in Dearborn, Michigan , Oct 9, 2007

Fiat money causes economic & political imbalances

The reform of monetary policy is absolutely necessary for freedom and prosperity. Many economic distortions and political imbalances result from a world filled with paper money, where governments maintain the monopoly right to counterfeit at will. Just as our interventionist foreign policy will end out of necessity, so too will the fiat dollar system.
Source: A Foreign Policy of Freedom, by Ron Paul, p.370 , Jun 15, 2007

Gold standard limits deficit spending

A major reform of our monetary system must come. There are four reasons why governments reject gold’s discipline and promote paper money.
  1. 20th century economists have taught three generations that gold is a relic of the past.
  2. A gold standard limits government deficit funding and both liberals and conservatives need a central bank to monetize debt.
  3. The knowledgeable elite who are in charge of the affairs of state use control of the money to control the wealth of the nation.
  4. Ignorance of what money is and how the Federal Reserve operates prompts many citizens and members of Congress to avoid getting involved in the issue.
For 50 years now, essentially all economists teaching at our major universities justified economic intervention, credit creation, and deficit financing. The result is what we have today: a Congress filled with members who know little else, staffers who spout their professor’s clich‚s, and a press that regurgitates the same nonsense.
Source: Freedom Under Siege, by Ron Paul, p.128-129 , Dec 31, 1987

Alternative to gold standard: legalize competing currencies

We offer two methods, one through the legalization of competing currencies, the other a government-directed gold standard of the classical variety. Only future events and attitudes will determine the best method. We do know that current monetary policy cannot continue indefinitely, and we are obligated to prepare for better times. This report established the foundation of which a sound monetary system can be built.
Source: The Case for Gold, by Ron Paul, p. ix-x , Jul 1, 1982

All great inflations end with gold replacing paper money

More and more people are asking if a gold standard will end the financial crisis in which we find ourselves. The question is not so much IF it will help or IF we will need to resort to gold, but WHEN. All great inflations end with the acceptance of real money--gold--and the rejection of political money--paper. The stage is now set; monetary order is of the utmost importance. Conditions are deteriorating, and the solutions proposed to date have only made things worse. Although the solution is readily available to us, powerful forces whose interests are served by continuation of the present system cling tenaciously to a monetary system that no longer has any foundations.
Source: The Case for Gold, by Ron Paul, p. ix , Jul 1, 1982

No return to gold standard; forward to modern gold standard

This report makes the point that we need not RETURN to a gold standard--which had many shortcomings--but we can learn from the mistakes of the past, improve upon past systems, and go FORWARD to a modern gold standard. By contrast, all the effort and planning imaginable cannot make paper money work. There is no way paper can be "improved" as money. Whenever governments are granted power to purchase their own debt, they never fail to do so, eventually destroying the value of the currency. Political money always fails because free people eventually reject it. For short periods individual countries can tell their citizens to use paper money, but only at the sacrifice of personal and economic liberty.
Source: The Case for Gold, by Ron Paul, p. x-xi , Jul 1, 1982

Market values currency in terms of gold, regardless of rates

There have been attempts to operate localized fixed rate systems amidst the generalized floating. Foremost among these attempts have been the two efforts of that most cohesive and interdependent group of countries, the European Common Market.

The first thing stabilizing attempts was the Common Market "snake," so-called because all the currencies moving up or down within predetermined limits called to mind the undulations of a moving snake. Begun in 1972, it was over by 1976, simply because several different governments, each with its own inflation rate, from the start moved away from each other, flinging accusations of bad faith at each other while they did.

The market has not been fooled by any of this. It knows how to value currencies--in terms of gold. And that valuation has been since 1971 embarrassing for every currency. One-tenth of an ounce of gold will today buy as many dollars as one ounce did 10 years ago.

Source: The Case for Gold, by Ron Paul, p.138-139 , Jul 1, 1982

Gold standard is superior to any form of paper standard

Our historical experience illustrates the overwhelmingly superior case for the gold standard against any form of paper standard. There has never, in peacetime American history, been any sustained rate of inflation to match the inflation since 1941. It is not an accident that the highest, most accelerated rate of inflation has taken place since 1971, when the US went off the international aspects of the gold standard and went over completely to fiat paper.

He same conclusion is true if we consider price stability.

Bimetallism doesn't work either, as America learned painfully from a century's experience.

The dollar must be redefined as a unit of gold again, and gold coins should be encouraged to actually circulate among the public, to be used not simply as long-range investment but as a medium of exchange functioning as money.

Source: The Case for Gold, by Ron Paul, p.140 , Jul 1, 1982

Depreciating currency is greatest threat to middle class

The greatest threat facing middle and working class Americans is our depreciating paper currency.

All aspects of the interventionist system threaten freedom and social peace, but money is the major issue, since it is the life-blood of all economic transitions. If we are to reverse the trends of the past six or seven decades, honest money and monetary debasement must become top concerns of ordinary Americans.

Fifty years of systematic monetary destruction now threaten the existence of our constitutional republic. The American people are frightened by what they see, and they are demanding that the inflation stop. More citizens are realizing that Congress and the Federal Reserve have generated a flood of paper money with no intrinsic value.

It is rare to find anyone today who believes that wealth can come out of a printing press. The corporate bailouts, guaranteed loans, government contracts, and welfare gimmicks all have failed, and the people can no longer be duped.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 15-16 , Dec 31, 1981

Gold standard avoids need for government promises

During most of the 19th century, we had a functioning gold standard. Combined with classic liberal economic policies and limited government, this set the stage for the greatest economic growth in history.

Although many Americans today see sound money as the exception, and paper as the rule, the opposite is true. Even the American dollar had a connection with gold up until 1971. Since the severing of that tie, the debasement of the dollar has accelerated, with the money supply doubling. Prices have more than doubled in the last ten years, not to mention the economic distortions that accompanied this inflation.

There is no law of economics stating that only gold can be used as money in a free society. But gold has served as the principal medium of exchange throughout history because its value does not depend on a government fulfilling its promises, especially in times of crisis.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 20 , Dec 31, 1981

Gold standard means minimal inflation

The gold coin standard, although imperfectly adhered to, permitted startling economic growth combined with falling prices in the 19th Century. In the 67 years since the abolition of the gold standard, the Consumer Price Index has gone up 625%. In the previous 67 years, under an imperfect gold coin standard, the CPI increased 10%. In his 1848 Communist Manifesto, Karl Marx urged: “Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” Sixty-five years later, the United States followed his advice, and passed the Federal Reserve Act of 1913.
Source: Gold, Peace, and Prosperity, by Ron Paul, p. 23 , Dec 31, 1981

Dollar as fiat currency only benefits politicians

When Nixon declared that foreign holders of dollars could no longer exchange them for gold, the gold exchange standard came to a miserable end. It had made possible the inflation which financed the Vietnam War and the Great Society, as well as massive business malinvestments. But the worst was yet to come.

The dollar died on August 15, 1971; after that date, it had no independent value for anyone. The new rules, with the dollar now simply a managed fiat currency, ushered in even greater inflation, economic turmoil, and set the stage for total loss of confidence in the dollar This will happen eventually, and perhaps in the near future, though no one knows exactly when.

Source: Gold, Peace, and Prosperity, by Ron Paul, p. 31-32 , Dec 31, 1981


Ron Paul on Voting+Sponsorships

Wasteful government spending backed by both parties

Truth is treason in the empire of lies. There is an alternative to national bankruptcy, a bigger police state, trillion dollar wars, and a government that draws ever more parasitically on the productive energies of the American people. It’s called freedom.
Source: The Revolution: A Manifesto, by Ron Paul, p. x-xi , Apr 1, 2008

Voted YES on terminating the Home Affordable mortgage Program.

Congressional Summary: Amends the Emergency Economic Stabilization Act of 2008 to terminate providing new mortgage modification assistance under the Home Affordable Modification Program (HAMP), except with respect to existing obligations on behalf of homeowners already extended an offer to participate in the program.

Proponent's Argument for voting Yes:
[Rep. Biggert, R-IL]: The HAMP Termination Act would put an end to the poster child for failed Federal foreclosure programs. The program has languished for 2 years, hurt hundreds of thousands of homeowners, and must come to an end. This bill would save $1.4 billion over 10 years. To date, the HAMP program has already consumed $840 million of the more than $30 billion of TARP funds that were set aside for the program. For this extraordinary investment, the administration predicted that 3 to 4 million homeowners would receive help. HAMP has hurt more homeowners than it has helped. The program has completed about 540,000 mortgage modifications. Another 740,000 unlucky homeowners had their modifications cancelled.

Opponent's Argument for voting No:
[Rep. Capuano, D-MA]: This is a program that I'm the first to admit has not lived up to what our hopes were. This program we had hoped would help several million people. Thus far we've only helped about 550,000 people. But to simply repeal all of these programs is to walk away from individual homeowners, walk away from neighborhoods. I'm not going to defend every single aspect of this program, and I am happy to work with anyone to make it better, to help more people to keep their homes, & keep their families together. To simply walk away without offering an alternative means we don't care; this Congress doesn't care if you lose your home, period. Now, I understand if that makes me a bleeding-heart liberal according to some people, so be it.

Reference: The HAMP Termination Act; Bill H.839 ; vote number 11-HV198 on Mar 29, 2011

Voted NO on $192B additional anti-recession stimulus spending.

Proponent's argument to vote Yes:Rep. LEWIS (D, GA-5): This bipartisan bill will provide the necessary funds to keep important transportation projects operating in States around the country. The Highway Trust Fund will run out of funding by September. We must act, and we must act now.

Opponent's argument to vote No:Rep. CAMP (R, MI-4): [This interim spending is] needed because the Democrats' economic policy has resulted in record job loss, record deficits, and none of the job creation they promised. Democrats predicted unemployment would top out at 8% if the stimulus passed; instead, it's 9.5% and rising. In Michigan, it's above 15%. The Nation's public debt and unemployment, combined, has risen by a shocking 40% [because of] literally trillions of dollars in additional spending under the Democrats' stimulus, energy, and health plans.

We had a choice when it came to the stimulus last February. We could have chosen a better policy of stimulating private-sector growth creating twice the jobs at half the price. That was the Republican plan. Instead, Democrats insisted on their government focus plan, which has produced no jobs and a mountain of debt.

Reference: Omnibus Appropriations Act Amendment; Bill H.R. 3357 ; vote number 2009-H659 on Jul 29, 2009

Voted NO on modifying bankruptcy rules to avoid mortgage foreclosures.

Congressional Summary:Amends federal bankruptcy law to exclude debts secured by the debtor's principal residence that was either sold in foreclosure or surrendered to the creditor.

Proponent's argument to vote Yes:Rep. PETER WELCH (D, VT-0): Citigroup supports this bill. Why? They're a huge lender. They understand that we have to stabilize home values in order to begin the recovery, and they need a tool to accomplish it. Mortgages that have been sliced and diced into 50 different sections make it impossible even for a mortgage company and a borrower to come together to resolve the problem that they share together.

Sen. DICK DURBIN (D, IL): 8.1 million homes face foreclosure in America today. Last year, I offered this amendment to change the bankruptcy law, and the banking community said: Totally unnecessary. In fact, the estimates were of only 2 million homes in foreclosure last year. America is facing a crisis.

Opponent's argument to vote No:

Sen. JON KYL (R, AZ): This amendment would allow bankruptcy judges to modify home mortgages by lowering the principal and interest rate on the loan or extending the term of the loan. The concept in the trade is known as cram-down. It would apply to all borrowers who are 60 days or more delinquent. Many experts believe the cram-down provision would result in higher interest rates for all home mortgages. We could end up exacerbating this situation for all the people who would want to refinance or to take out loans in the future.

Rep. MICHELE BACHMANN (R, MN-6): Of the foundational policies of American exceptionalism, the concepts that have inspired our great Nation are the sanctity of private contracts and upholding the rule of law. This cramdown bill crassly undercuts both of these pillars of American exceptionalism. Why would a lender make a 30-year loan if they fear the powers of the Federal Government will violate the very terms of that loan?

Reference: Helping Families Save Their Homes Act; Bill HR1106&S896 ; vote number 2009-H104 on Mar 5, 2009

Voted NO on additional $825 billion for economic recovery package.

Congressional Summary:Supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for fiscal year ending Sept. 30, 2009.

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): This country is facing what most economists consider to be the most serious and the most dangerous economic situation in our lifetimes. This package today is an $825 billion package that does a variety of things to try to reinflate the economy:

  1. creating or saving at least 4 million jobs
  2. rebuilding our basic infrastructure
  3. providing for job retraining for those workers who need to learn new skills
  4. moving toward energy independence
  5. improving our healthcare system so all Americans can have access to quality treatment
  6. providing tax cuts to lessen the impact of this crisis on America's working families.

Opponent's argument to vote No:

Rep. JERRY LEWIS (R, CA-51): Most of us would agree that the recent $700 billion Troubled Asset Relief Program (TARP) is an illustration of how good intentions don't always deliver desired results. When Congress spends too much too quickly, it doesn't think through the details and oversight becomes more difficult. The lesson learned from TARP was this: we cannot manage what we do not measure. We cannot afford to make the same mistake again.

Sen. THAD COCHRAN (R, MS): We are giving the executive branch immense latitude in the disbursement of the spending this bill contains. We are doing so without any documentation of how this spending will stimulate the economy. Normally, this kind of information would be contained in an administration budget. For items that have a short-term stimulative effect, most of us will feel comfortable debating their merits as an emergency measure. But there is a great deal of spending that is not immediately stimulative.

Reference: American Recovery and Reinvestment Act; Bill H.R.1 ; vote number 2009-H046 on Jan 28, 2009

Voted NO on monitoring TARP funds to ensure more mortgage relief.

Congressional Summary:Requires specified depository institutions under the Troubled Asset Relief Program (TARP) to report periodically on their use of TARP assistance. Requires federal banking regulatory agencies to examine annually the use of TARP funds made by the deposit institutions.

Proponent's argument to vote Yes:Rep. BARNEY FRANK (D, MA-4): Last year, after we responded to the urgent pleas of the Bush administration to authorize the $700 billion deployment of Federal funds to unstick the credit markets, many of us became very unhappy, [because Bush] repudiated commitments to use a significant part of the fund to diminish foreclosures. If we do not pass this bill today, we will make no progress in what is the single biggest economic problem we've been facing, namely, the foreclosure crisis.

Opponent's argument to vote No:Rep. RON PAUL (R, TX-14): There has been a lot of money spent to try to bail out the financial industry, and nothing seems to be working. I think it's mainly because we haven't admitted that excessive spending can cause financial problems, & excessive debt and inflation can cause problems.

Actually, the recession is therapy for all of the mistakes, but the mistakes come, basically, from a Federal Reserve system that's causing too many people to make mistakes. Interest rates are lower than they should be, so they don't save. That contributes to what we call "moral hazard" as well as the system of the Fannie Mae and Freddie Mac system. With the assumption that we're all going to be bailed out, people say, "Well, no sweat because, if there is a mistake, the government will come to our rescue." A private FDIC would never permit this massive malinvestment. There would be regulations done in the marketplace, and there would not be this distortion that we've ended up with.

Reference: TARP Reform and Accountability Act; Bill H.R.384 ; vote number 2009-H026 on Jan 21, 2009

Voted NO on $15B bailout for GM and Chrysler.

Congressional Summary:

Proponent's argument to vote Yes:Rep. BARNEY FRANK (D, MA-4): This economy is in the worst shape that it has been in since the Great Depression. This Congress voted 2 months ago to advance $25 billion to the auto industry to promote innovation. This $15 billion is an additional "bridge loan."

Opponent's argument to vote No:Rep. SPENCER BACHUS (R, AL-6): We all understand that the bankruptcy of either GM or Chrysler would have a cascading effect on other manufacturers. But I cannot support this plan because it spends taxpayer money without any real promise to return the industry to profitability. I see several glaring flaws. We are creating a new car czar to manage these companies from Washington; not a CEO, but a car czar. Second, this legislation actually imposes new and expensive mandates on our automobile companies. Third, this legislation imposes Federal Government management on the Big Three, the wisdom of Washington. It is clear that the management of these companies have made mistakes, many mistakes, but to set up a command and control Federal bureaucrat is exactly the wrong solution.

Rep. RON PAUL (R, TX-14): The problems that we are facing today date back to 1971. But we don't seem to want to go back and find out how financial bubbles form and why they burst. Instead, we just carry on doing the same old thing and never look back. We spend more money, we run up more debt, we print more money, and we think that is going to solve the problem that was created by spending too much money, running up debt, printing too much money. Today, we are talking about tinkering on the edges without dealing with the big problem.

Reference: Auto Industry Financing and Restructuring Act; Bill HR.7321 ; vote number 2008-H690 on Dec 10, 2008

Voted NO on $60B stimulus package for jobs, infrastructure, & energy.

Congressional Summary:
    Supplemental appropriations for:
  1. Infrastructure Investments: Transportation: DOT, FAA, AMTRAK, and FTA
  2. Clean Water (EPA)
  3. Flood Control and Water Resources (ACE)
  4. 21st Century Green High-Performing Public School Facilities (ED)
  5. Energy Development (DOE)
  6. Extension of Unemployment Compensation and Job Training
  7. Temporary Increase in Medicaid Matching Rate
  8. Temporary Increase in Food Assistance

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): Congress has tried to do a number of things that would alleviate the squeeze on the middle class. Meanwhile, this economy is sagging. Jobs, income, sales, and industrial production have all gone down. We have lost 600,000 jobs. We are trying to provide a major increase in investments to modernize our infrastructure and to provide well-paying construction jobs at the same time.

Opponent's argument to vote No:Rep. JERRY LEWIS (R, CA-41): Just 2 days ago we were debating an $800 billion continuing resolution. Now in addition to being asked to pay for a bailout for Wall Street, taxpayers are being asked to swallow an additional $60 billion on a laundry list of items I saw for the first time just a few hours ago. The Democratic majority is describing this legislation as a "stimulus package" to help our national economy. But let's not fool ourselves. This is a political document pure and simple. If these priorities are so important, why hasn't this bill gone through the normal legislative process? We should have debated each of the items included in this package.

It doesn't take an economist to tell you that the economy needs our help. But what does this Congress do? It proposes to spend billions more without any offsets in spending. The failure to adhere to PAYGO means that this new spending will be financed through additional borrowing, which will prove a further drag on our struggling economy.

Reference: Job Creation and Unemployment Relief Act; Bill S.3604&HR7110 ; vote number 2008-H660 on Sep 26, 2008

Voted NO on defining "energy emergency" on federal gas prices.

Congressional Summary: