1.Federal budget deficits
From a statement released by Ron Paul on April 25, 2011:
"Last week the financial markets were roiled by Standard & Poor’s announcement that they will change their outlook on the fiscal health of the United States over the next two years from 'stable' to 'negative'....
"Even the most conservative budget that has been proposed by Republican leadership requires raising the debt ceiling by an additional $9 trillion by 2021. This demonstrates absolutely that no one in power right now has any real intention of addressing our spending problems or paying down the debt. They simply expect to continue to borrow and run up more debt forever, without limit.
"Yet they always imagine our dollar will have value no matter how many we print. This expectation is foolish and naïve. I guarantee that those buying our debt are not foolish and naïve enough to go along with this charade forever."
Taxes and the size government
Uygur: What do you think should be the proper income tax rate?
Paul: Well, the best would be zero. I mean, we lived most of our history with zero income tax. But you would have to have the proper sized government. You would have to have the proper role for government.
You can't be the policeman of the world and not have an income tax. So I would not have all my troops around the world. I would be bringing the troops home.
And I wouldn't have a military industrial complex that demands so much, but I wouldn't have a welfare state either.
And under those conditions, you don't need an income tax. And I think that's the way it should be....
I think when people take money from you and give it to somebody else, that's the equivalent of stealing from you. I don't want to take any of your money. I want
you to invest it and create jobs.
The gold standard
From a congressional hearing, Sept. 17, 2000:
"A characteristic of paper money, of fiat money, is that some benefit and others lose. And a good example of this of how Wall Street benefits, certainly Wall Street is doing very well, but just the other day I had one of my shrimpers in my district call me. He says he's tying up his boat. His oil prices have more than doubled, and he can't afford it, so for now he will have to close down shop.
"So he suffers more than a person on Wall Street. So it is an unfair system. And this is not unusual; this is a characteristic well-known, that when you destroy and debase a currency, some people will suffer more than others....
"If you increase the supply of money, you have inflation."
From a congressional hearing, July 16, 2008:
"Our government tells us, well, there is no recession so things must be all right. A lot of people are very angry....
"From my viewpoint, what we need is a world-class dollar, you know, a dollar that is sound, not a dollar that continues to depreciate and not a system where we perpetually just resort to inflation and deficit-financing to bail out everybody. And this is what we've been doing.... The handwriting on the wall is, there's a limit to how many times we can bail the dollar out, because conditions are so much worse today than they have ever been.
"You know, we talk a lot about predatory lending, but I see the predatory lending coming from the Federal Reserve – interest at 1 percent, overnight rates, loaning to the banks, encouraging the banks and investors to do the wrong things, causing all the malinvestment."
From a congressional hearing, March 24, 2009:
Paul: The question really comes out, who should allocate capital? Is it the free market, or should it be government? And I think that we had a system where the free market wasn't working, and we didn't have capitalism. The allocation of capital came from the direction of the Federal Reserve and a lot of rules and regulations by the Congress.
We had essentially no savings, and capital's supposed to come from savings; and we had artificially low interest rates. So look at all that, and this means we'd have to look differently at what our solutions should be. Everybody loves the boom. That was great. Nobody questions all this. But when the bust comes, everybody hates it.....
So where do you put the blame, on the market or on crony capitalism that we've been living with probably for three decades?
Federal Reserve Chairman Ben Bernanke: Congressman, I certainly do not reject capitalism. I don't think this was a failure of capitalism per se.... It is nevertheless the case that we've seen over the decades and the centuries that financial systems can be prone to panics, runs, booms, busts. And for better or worse, we have developed mechanisms like deposit insurance and lender of last resort to try to avert those things. Those protections, in turn, require some oversight to avoid the build-up of risk....
Paul: Isn't that what creates the moral hazard, though? Isn't that the problem, rather than the solution?