October 17, 2008
U.S. Rep. Ron Paul, who has been an opponent of the government's bailout
plan, spoke Friday with CNN's Kiran Chetry on "American Morning."
"Give up on this
idea that inflation solves everybody's problems."
The Texas Republican says the bailout's infusion
of government money will lead to inflation, that our current monetary system
is coming to end, and the market, not politicians, can best solve the
Kiran Chetry: The last time you were
with us you explained why you were against the government's bailout
plan, why you were voting against it, and you didn't believe focusing on
buying these troubled assets was the smart thing to do. Since then,
they've tweaked it and decided to buy stakes in some U.S. banks. Do you
think that's a better strategy to help heal the economy?
U.S. Rep. Ron Paul: They tweaked it up. It started out as a
three-page document and went up to 450 pages. Instead of $700 billion
it's up to $850 billion. Reuters had a story out today. They estimate
it's going to cost the American taxpayer about $5 trillion. It's
tweaking in the wrong direction, and I don't think it's going to do any
Chetry: The credit markets are starting to loosen up a bit, at
least from what we've seen this week. Is that a sign that maybe it is
Paul: Maybe to some degree in the short run, but that just
means we'll have more inflation. You can't create $5 trillion out of
thin air and not expect inflation. So although the dollar may be up a
little bit right now because the markets are a little calmer, this just
means that in time we're going to all suffer and pay for this, and we're
going to pay for it with higher prices (watch video far below.)
This is the serious problem. It's the attack on the dollar system.
They're trying to save the dollar, but this system that we've had since
1971 is nonviable, and it's coming to an end. That's what this whole
story is about, the end of a monetary system that we've had since 1971.
Something has to give. You just can't create more money out of thin air
and propping up everybody. It's an immoral system. You're asking the
poor people to bail out the rich. You're asking the innocent people to
bail out the guilty. You're asking people to just totally defy the
Constitution because there's no place in the Constitution that says that
we can do these things.
Besides, economically, it's a disaster. This is going to cause a great
deal of harm. It's like a drug addict taking a strong fix, and he feels
better for a day or two, but believe me, we're going to kill the
patient. And the patient here is the dollar system and our entire world
I would say let's get off this addiction.
Chetry: Congressman, have you heard anything from either of the
presidential candidates about their economic plans that you think are
good things that need to be implemented?
Paul: No, not really, but it's tough to find out the good parts. I do
think that John McCain has a better approach to the medical problem, and
Obama has a better approach to trying to save some money by coming home
from Iraq. We're spending $10 billion a month over there. We could save
a lot of money, and that money should be spent back here. Quite frankly,
how can we trust anybody? When it comes to the bailout, how do they
Both McCain and Obama come rushing back to Washington and vote
for the bailout.
Chetry: It was approved in both houses. I know you voted against it.
That leads me to another question. If Barack Obama ends up winning, it
looks like the Democrats would have a trifecta in Congress, both houses
and the White House. What does that mean for the American people and
also for the GOP?
Paul: I mean, it's a disaster for the country and everybody because,
even with all the shortcomings of John McCain, his strongest argument to
be president is keep the Congress and the presidency in separate hands.
The American people are going to be a lot better off if they're fighting
a little bit instead of just having no restraints whatsoever.
poor reason to argue for McCain.
Chetry: I know what you're saying. Staff members writing on your own Web
site say the Democratic takeover of both houses of Congress and the
White House this November would be a "repudiation of false conservatism
of the Republican Party." How do you get back to some of those fiscally
Paul: It's going to be tough because you have to convince the American
people that that's what we need. And everybody now is realizing in the
country there's something seriously wrong with our whole financial
system and our governmental system.
But the big question is:
Does the majority of the American people
believe the government can still take care of us, or should we get the
government out of the way, quit spending money, balance the budget,
bring our troops home, and let the American people keep the money they
That means drastically reducing taxes.
Get the government out of this overregulation, and give up on this idea
that inflation solves everybody's problems. If inflation, that is the
creation of new money, could solve everybody's problems, which they're
claiming right now, nobody would ever have to work again. If $5 trillion
could save this economy, why work? Just print money, and everybody will
They don't understand the idea that people have to work. People have to
save, instead of consumers spending more money.
The market is saying you should back off, spend less money, and save
money. Everybody says, no, don't save money. You're supposed to go out
there and spend money.
The people who have saved in the last five years have money in the bank,
and cash is good right now. They're going to buy up the bargains.
They're going to get a good deal on a house. Prices on houses should
come down. We shouldn't keep them artificially high. We shouldn't try to
stimulate housing. There are too many houses. We should let the market
make these decisions.
It's arrogant for the politicians and the bureaucrats to believe they
can plan the economy and sort this all out. We've been doing it for all
these years, and the monetary system is so confusing and so corrupt,
that the sooner we get back to believing in ourselves, believing in
freedom, believing in sound money, believing in the Constitution, we're
going to solve these problems.
Right now there's a fight going on in this country. Our numbers are
growing. We're not the majority, but our numbers are growing. And as
this situation deteriorates, more people are going to say, hey, maybe
it's right. Maybe limited government and freedom works. Maybe freedom is
popular, and maybe freedom really works.
And this idea that we have to
depend on government for all these programs is an illusion.
'We're going to suffer' (Ron Paul)