Ron Paul Talks Money, Debt [VIDEO]
Presidential candidate visits with Concord business owners, civic leaders.
Presidential candidate U.S. Rep. Ron Paul made a number of campaign stops in Concord on Aug. 18, speaking first to the N.H. House Business Coalition/the Greater Concord Chamber of Commerce breakfast event at the Kimball-Jenkins Estate.
The event, the second co-sponsored by the groups, featured Paul talking about the failings of the current American economic system, Constitutional principles, and a short question and answer session.
Paul admitted that it wasn’t easy for him to explain why the economy was in such rough shape because “it took a long time for us to get here.” He said the federal government has a lot of responsibility to assist with business and job creation, not unlike states. But regulation and taxes were causing problems. Paul said labor unions in states like Michigan had pushed the cost of doing business up while right-to-work states like Texas had not. He said limited state income taxes also helped the economy of Texas.
Paul said the Founders attempted to make the states as strong as possible, with sovereign rights, because the young country’s leaders didn’t want a strong federal system. One thing that was agreed upon was to have a strong currency, he said, with regulations stipulating that there would be no paper money. A strong interstate commerce clause was also created and used to regulate everything, Paul claimed.
“That distortion we have put up with for a long time,” he said. “That has been detrimental.”
For a long time, Paul has been talking about the Federal Reserve and how it manipulates the currency and causes ups and downs in the economy and the business cycle. He said there was no need for a central bank like the Fed creating massive inflation. Paul said the Federal Reserve is essentially “a price fixer” for financial and banking institutions, and it was the biggest problem facing the economy. He said price controls by the Fed, not unlike food price controls, have caused shortages because it controls the interest rate instead of allowing the free market to determine the rates.
“We put up with price controls in half our economy and that is, the monetary system, the interference of the Fed controlling interest rates,” Paul said. “When that is done, the businessman, the consumers, and the savers, everybody, gets bad information.”
Since going off the gold standard in 1971, the world accepted American currency as valuable even though it had no gold or silver backing it up on the marketplace, he said. It turned a relatively affluent nation into a debtor and creditor nation, he said. As time went on, the country consumed its wealth, spent more money, and buried the country in debt.
“It was all an illusion,” Paul said. “And we have suffered the consequence.”
Paul said confidence in the market and in the future was also having an adverse affect because no one in the world knows what is going to happen next.
The pyramiding of debt by the Federal Reserve was also a problem because the debt created an expansion of federal spending, Paul said, likening it to a person who has great credit and buys things like homes, boats, and cars, but doesn’t have the money to pay the debts back. At some point, he said, the individual or business borrowing money has to stop and pay it all back.
“Most people understand that, as an individual, but they don’t want to think about it in a nation,” he said. “It’s politically unpopular to, all of a sudden, say we need to live within our means. But the governments have this advantage, not only do they have a credit card, but they have the power of taxation and the power of a printing press.”
Paul said another problem was the trade policy. While he didn’t advocate for tariffs or protectionist policies, he did say that the exporting of all of the country’s money to buy goods overseas was costing the country jobs.
“That has to change, we have to invite capital back in,” he said, while advocating for lower capital gains and corporate taxes.
Paul said that regulatory burdens on business were also causing economic problems and he suggested that they be lowered in order to create better jobs.
The candidate was also critical of the arguments by the left and the right about the debt ceiling debate earlier this month. He said the $2 trillion “cut” in the budget deficit was actually a change in the level of debt increases expected from future spending. He said, eventually, the United States would probably default on the debt, which would create hyperinflation.
“It’s destructive to the middle class,” said. “I think we’re embarked on a road like other nations have done.”
Also, Paul warned any support for a United Nations currency idea that is being floated.
In the end, the candidate said, the road to prosperity was a better understanding of economics by everyone, a sound currency, and freedom.
“Freedom really gives us the answer,” he said. “Our Constitution gives us our answer, our traditions give us our answer, and we do not have to sacrifice our freedoms and we do not have to sacrifice our wealth. What we have to do is understand economics and understand how freedom works, and I believe we’ll get back on our feet in a short period of time.”
The N.H. House Business Coalition breakfast previously played host to presidential candidate Newt Gingrich and is in the process of inviting other candidates to participate. Later in the day, Paul met with local real estate brokers and a radio station.