2008 Republican debate at Reagan Library: on Budget & Economy

John McCain: Things are tough now, but we’re better off than in 2000

A: You could argue that Americans overall are better off, because we have had a pretty good prosperous time, with low unemployment and low inflation and a lot of good things have happened. A lot of jobs have been created. But let’s have some straight talk. Things are tough right now. Americans are uncertain about this housing crisis. Americans are uncertain about the economy, as we see the stock market bounce up and down. But I think what we’re trying to do to fix this economy is important. We’ve got to address the subprime housing problem. We need to make the Bush tax cuts permanent, which I voted for twice to do so. I think we need to eliminate the alternate minimum tax.

Q: It sounds like that we’re not better off, is what you’re saying.

A: I think we are better off overall if you look at the entire eight-year period, when you look at the millions of jobs that have been created, the improvement in the economy, etc.

John McCain: May have to go further to fix the subprime lending situation

A: Yes, and it’s tough here in California, it’s tough in Arizona, it’s tough particularly all over, but it’s very tough particularly in the high growth states. The efforts that have been made so far are laudable. We may have to go further, but the fact that the FHA and the other organizations of government under Secretary Paulson’s direction, and he is doing a good job of sitting down and fixing at least a significant number of these problems. We’ve got to return to the principal that you don’t lend money that can’t pay it back. There’s some greedy people on Wall Street that perhaps need to be punished. There’s got to be a huge amount more of transparency as to how this whole thing came about so we can prevent it from happening again. If necessary, we’re going to have to take additional actions and particularly in cleaning up a mortgage.

John McCain: Recession is partly psychological and not inevitable

Mike Huckabee: We’re worse off than in 2000, due to Congress’ over-spending

A: I don’t think we are. And the real issue, though, let’s not blame President Bush for all of this. We’ve got a Congress who sat around on their hands and done nothing but spend a lot of money and they’re spending, leaving us $9 trillion in debt that we’re passing on to our grandchildren. I don’t blame the president solely for that. But are we better off? Well, new home starts are down 40%. That’s going to have a cascading impact on everybody who is in the building trades. And all over our economy, with unemployment up to 5% across the nation, that means there are a lot of families today that don’t have a paycheck. And I think what Americans are looking for is somebody to be straight with them and tell them that, no, it’s not better and it’s not going to get better unless we have some serious leadership in Washington that says that we’re going to have policies that touch the people not just at the top, but the people at the bottom.

Mike Huckabee: Rebates of $150 billion help China; widening I-95 helps US

A: Well, if we end up with the rebates, we’re going to borrow the $150 billion from China. When we turn it into rebates, most people are going to go out and buy some consumables like a pair of shoes that they probably don’t even need, but they’re going to buy them, and they’re most likely an import from China. My point is, whose economy are we stimulating when we do that? The Heritage Foundation did a pretty interesting study on past rebates & found it does not really stimulate the economy in the way that we hope it will. If you really want an economic stimulus package, look at what infrastructure investment does.

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

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.

Ron Paul: The people, not government, are supposed to run the economy

Ron Paul: Reagan was very sympathetic to the gold standard

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.

Ron Paul: Federal Reserve creates money and prints it out of thin air

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.