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Commodity and Futures - Physical commodity and financial futures markets.
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Posted by CycleSurfer on January 23, 2008, 3:26 pm
More on www.GlennBeck.com
January 23, 2008 - 12:54 ET
GLENN: I thought I would get Ron Paul on the phone and find out where
he stands on the economy, what the problems are with the economy, what
he thinks is coming in our future and how he would correct it if he
was President of the United States, and he's on with us now, hello,
Ron Paul.
PAUL: Hello, nice to be with you.
GLENN: Nice to be with you, sir. First of all, tell me what's
happening with the economy.
PAUL: Well, it's making the correction that was inevitable due to the
malinvestment and the unbelievable debt accumulated due to a federal
reserve policy. Once they create credit out of thin air, they cause
business people, savers to do the wrong thing and you always have to
have a correction. So dealing with the recession is very difficult
because the cars with a few years ago and we have to work our way out
of this, which means there has to be a correction.
GLENN: Okay. If you were President of the United States, what would
you do?
PAUL: Well, the advice would be return to the market economy. First
we would have to deregulate. We had a crisis a few years ago, at least
a supposed crisis with Enron and they superregulated. So I would
repeal certainly major portions of the Sarbanes-Oxley. So we would
argue for deregulation. Then, of course, there should be major, major
tax reform and --
GLENN: Hang on. Before we go into tax reform, let me just start with
Sarbanes-Oxley. I don't want to get all -- that's way deep. So let's
kind of surface skim here so we don't make people's heads spin off
their shoulders. The deregulation, some people will say that part of
the problems, for instance, with the bonds is that these insurance
companies, they had no regulation. So they just kept insuring people
even though they didn't have the money.
PAUL: Yeah, but that was all government, you know. When you have the
FDIC or the FHA or whatever ones. The main problem is that we don't
save money. That's where capital's supposed to come from. Instead we
print money. We create money. We call it capital and then interest
rates may be 1 or 2 or 3% and business people think, well, there's a
lot of savings going on out there. So they do the wrong things. If
interest rates were very high, they would be more cautious but instead
we create the bubbles. People start building houses to extreme and
then they overbuild and then you have to rest in order for the markets
to catch up. And that's when the bubble collapses, and we're in the
midst of that. But government does it in both ways, excessive credit
and also pushing money into certain areas such as housing or the
financial markets and they overprice. Then the prices have to come
down. So it's a very difficult situation, but the main goal should be
the restoration of the market economy.
GLENN: Okay. So now, you mentioned tax cuts. Congress, both sides of
the aisle are talking now about $800 tax rebates to the poorest people
in America. I don't know about you, but I've never seen a job created
by a guy who's at the bottom of the ladder. This seems just like a
plan to get people to spend which to me is what got us here in the
first place.
PAUL: Yeah, you are right. And all you do is you encourage
consumption and we're overdoing consumption right now. It's not a tax
rebate if you send somebody a check for $800 for not paying taxes.
That's a welfare check.
GLENN: Thank you.
PAUL: And that money really doesn't go to producing jobs. What you
have to do is restore the savings and encourage capital investment.
You have to eliminate taxes on capital gains and we have to do
whatever we can, get rid of the taxes, the death tax and eliminate
taxes on dividends and savings. All these things would encourage
savings and then have a market rate for interest rates to give us the
signal on whether we should be investing or saving or spending. But
that doesn't exist anymore and that's why we have these perpetual
bubbles. I think this bubble right now that has been kept together for
quite a few years is a major problem and the unwinding of this problem
is very critical. The biggest bubble's in the dollar bubble and now
the dollar is coming under attack. And what are they proposing?
Excessive spending, you know, deficit spending which, where are they
going to get the money? They don't have any money in Washington. They
either have to borrow from China or print it, which means there's more
inflation. Or the Federal Reserve comes in and said, like yesterday,
drastically lowering interest rates? How do they lower interest rates?
They print a lot more money. Yesterday when they announced that, the
dollar immediately reversed itself and sharply went down and it's the
weakening of the dollar that is the crisis that we face because
everybody suffers from that. You and I suffer because all of a sudden
the dollar in that wallet buys 80 cents worth of goods instead of a
dollar's worth. So we all get poor and we have to stop that cycle.
GLENN: Nobody understands that, well, they say let me give $800 to
the poorest, they are really not doing that much because the dollar is
worth so little. The poorest are being hit by inflation harder than
anybody else.
PAUL: That is exactly right. The do-good liberal who said we have to
take care of everybody -- and they are well intentioned. The more debt
they run up to give to the poor, the poorer the people get because
they cannot keep up. Take, for instance, even Social Security
recipients. Their inflation rate might be 10 or 12% and we give them a
cost of living increase of 2%. So they're losing. And you just can't
keep that cycle going. You have to balance the budget, you have to
live within our means and then we have to restore confidence to the
dollar. So it's a major, major undertaking. But we have to reverse
it.
I think the most immediate thing is to cut back on spending, not
increase spending, and get the money back into the hands of the market
of savers and investors and people who are spending. But government
economic planning does not work and that's what we're coming to the
realization.
GLENN: Well, when you say government economic planning, the Fed is
not the government and the Fed just made the largest cut that they
have made since 1984. It is the first emergency cut since right after
September 11th. There's talk now that they may cut another quarter,
which is insanity. There's just no more that you can cut unless you
destroy the dollar. What are your thoughts on the Fed?
PAUL: Well, they are the culprit. They caused it. They caused it by
keeping interest rates artificially low. How are they trying to solve
the problem? Keeping interest rates low. For an hour or to the markets
rebounded because they're conditioned to listen to that and they
figure, oh, the market's going to go up because interest rates are
coming down but today I predict the market's going to go down again
because that was only temporary. You cannot change the long-term trend
of the market. You can temporarily tinker with it. You can
artificially make them go up. But eventually the market is more
powerful than the Fed and the government and the rejection of the
dollar is the crisis that we face and we face that because we create
too much money and we do that because we spend too much, both overseas
and domestically and we have to deal with this. We have to live within
our means. If we could just freeze all spending domestically and I
know we disagree on the overseas expenditures but why do we pay for
the defense of Europe and Japan and Korea? We could save hundreds of
billions of dollars. So this is my argument and it's well received.
Yeah, why do we pay for defense of Europe?
GLENN: Right.
PAUL: If we could save that money, why don't we spend that money
here? Just think of all the money that would float back to this
country if all those military personnel were stationed here spending
the money in this country. We wouldn't be less safe. I think we would
be more safe.
GLENN: I'm not necessarily, I'm not necessarily opposed to pulling
troops out of some parts of the world but I don't want to get into
that today.
PAUL: Yeah, with he don't need to get into that today.
GLENN: We can get into that some other time. I really want to focus
on the economy and the gold standard. You are one of the only people
that is talking about the return of the gold standard. It was -- I
mean, honestly, I mean, Ron, you know, jeez. I don't want to sound
like a conspiracy theorist but you know what, at times I believe I am
a conspiracy theorist because there's a lot of stuff that just, if you
read history and you go back all the way to Woodrow Wilson, you can
see that the foundation was laid for one-world government, the
foundation was laid for socialism, and I really, truly believe that
these -- you know, Hillary Clinton says she's not a liberal, she's,
quote, a modern day Progressive. Anybody who knows what a Progressive
is, that is a nightmare. It is the road to socialism.
Do you believe that there is any intentional intent to take us down
these roads and bankrupt us because anybody with a clue would know
what's coming around the corner with Social Security, Medicare,
Medicaid and I don't know how you can say I want to do universal
healthcare as well.
PAUL: You know, I guess there's a lot of evidence for that. It's
awfully tempting. I always try to say, well, they are doing it out of
ignorance and lack of understanding of how the market economy works
rather than saying, oh, I'd like to bring on a Depression. I think
they actually believe that they are good managers. Alan Greenspan once
told me -- because he used to be a gold standard person and he's
written very well about that in his early years. But he says, no, he
says, we central bankers have learned to make paper money act as if
it's gold. You know, they come to believe in themselves that there is
good and they can manage as well as the market, and I told him after
that, I said, you know, if you do that, this will be the first time in
all of history that anybody could do that, you know, to make paper
money act like gold money.
You know, you should never be embarrassed about the gold standard
because one of our most favorite Presidents, Ronald Reagan, told me
personally once, he says, you know, he says, I'm interested in gold
because, he says, if you study history, you find out any great nation
that has gotten off the gold standard will no longer remain great. And
we just got off the gold standard totally in 1971 and if you look at
the statistics, in '71 when it comes to spending and deficits and
inflation and the value of the dollar, I mean, they're dramatic. And I
just want to make sure we wake up before the dollar totally collapses
because that is a real tragedy if we let that happen.
GLENN: How come Ronald Reagan didn't put us on the gold standard? I
mean, if anybody had the clout to do it, how come he didn't do it? And
if you were President, how would you propose we would do that?
PAUL: Well, it's not easy but what I would do is not want to close
down the Federal Reserve because that is dramatic and it wouldn't
happen. It would be chaotic, too. All I want to do is legalize the
Constitution, let you and me use gold if we want, which means you have
to remove sales taxes and capital gains tax off gold and let it
circulate just like currency circulated around the world. So if you
want to save for your kids' education, you can put them in gold bonds
and if the dollar, if you've got, the dollar's going down more rapidly
than the price of education goes up, you could save in gold. You could
get paid in gold and if we --
GLENN: Hang on.
PAUL: Then paper will not be used anymore.
GLENN: Wait a minute. But what you're proposing, you're this close to
being arrested if you -- I mean, if you went and actually did that,
they already have. The liberty dollar guys. They have tried to arrest
the guy and say, you are trying to compete with the currency of the
United States of America. What you're talking about now, you can be
arrested for.
PAUL: Yeah. So the Constitution is being violated by law and it's
supposed to be the other way around. And this is why I used to term
this legalize the Constitution, this legalize gold and silver which is
in the Constitution. So you would have to change the tax code. You'd
have to persuade the congress to do this, but it would be less
chaotic. This is exactly what I proposed in the early 1980s when I was
on the gold commission, competing currencies. Economists think you can
have competing currencies easier today than in the past because the
world's always have competing currencies. Just allow gold and silver
to do the same thing.
GLENN: When you were on my program on television, you said something
that I didn't correct because I didn't -- I mean, it sounded so
outlandish but I let it go because I didn't have the facts and you
sounded so convinced of it that I thought, hmmm, I've got to check
into that and I'll correct it the next time he's on or I'll correct it
the next day. What you said was, if we got rid of the income tax, the
Government would still take about the same amount of money in as they
had ten years ago.
PAUL: Approximately.
GLENN: We looked into it and it's accurate. Can you explain that and
how do we get that message out to people?
PAUL: Well, it's just that the growth of spending is so rapid that
people don't realize that freezing budgets would be a tremendous
benefit and that's one of my proposals in my economic reforms is just,
freeze nondefense and nonentitlement spending which would go a long
way to coming to the balance. I think $1 trillion less 10 years ago, I
think government was adequate size 10 years ago. But we have this
notion that everything that is to have perpetual growth. Just think of
our friends in the Republican party that used to run against the
Department of Education. What did we do when we finally got in charge?
We doubled the size of the Department of Education. We create new
departments. We never slow up. Do we do anything to unwind the
dependency of the farmers on centralized planning for farmers which
pushes cost of food up? You know, it just doesn't make any sense. The
people demand change, or they did in '94 and the year 2000, no wonder
they're aggravated with us.
GLENN: Wait, wait.
PAUL: We need to at least freeze things without cutting anything.
GLENN: Hang on just a second. The people demand change. Well, the
people are demanding change now so much that the voice of the people
is so clear that everybody has as their slogan or on their little yard
signs either "Change" or in your case "Revolution." And it is -- I
mean, it's everywhere. Everybody knows we want change and yet the
people are going to the polls and they are voting for Hillary Clinton
or John McCain. How do you explain that?
PAUL: Well, it's not easily explained but I think there's a lot of
information lacking from these people. A lot of people, you know, you
and I and others talk about, you know, the issues and the politics of
it but, you know, probably 80 or 90% of the people feel like it's
their patriotic duty to vote but they only think about voting about
two or three days before the election. We think everybody's
interested. You know, we get on a stage and have a debate. We think,
boy, everybody's paying attention to us. 80 or 90% of the people are
looking at football games but they still feel like they have to vote.
It will be very vague information. But all I can see is the people
that support me do a lot of reading and they know what's going on and
they know what they're supporting and they know about the economic
issues and they know about the gold standard and they know they don't
like the income tax. So that's a little bit different. And the other
thing is they always know I've voted the way I've talked and right now
there's a lot of disenchantment with people saying one thing and doing
something else.
GLENN: Will you run as a third candidate if you done get the
nomination?
PAUL: No, I don't want to do that. I have no plans of doing that.
This is a tough enough job right now.
GLENN: Really? Well, why is that? You don't think -- I mean, if it
was McCain and Clinton, you don't think there would be a lot of people
going, well, jeez, I can't vote for either of them?
PAUL: I think it's the system that bothers me the most. You know, the
job of getting on the ballot, I probably spend millions of dollars and
half of my effort just wondering if I could even get on the ballot.
Then the debates wouldn't be available to me and you probably wouldn't
have me on your program or something.
GLENN: Yes, I would.
PAUL: I wouldn't be a major party.
GLENN: Yes, I would. Yes, I would. You know what, I'm very offended
by some of your supporters because they always say that, you know, I
won't listen to you or I won't have you. I'm probably the guy on talk
radio, mainstream talk radio that will at least say I agree with you
on a lot of things. I just disagree with you vehemently on others.
PAUL: And I appreciate that.
GLENN: I mean, you know, we just -- I just happen to disagree with
you, but I respect you, sir, for your opinion. I have said this, you
know, behind your back. So let me say it to your face. I think you are
the closest we have running to a founding father. You seem to be the
only guy who has actually read the federalist papers. So I appreciate
your efforts, sir.
PAUL: Well, thank you very much.
GLENN: You bet. We will talk to you again.
PAUL: Thanks for having me.
GLENN: You bet. Bye-bye.
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