A Chat with Ron Paul
By Jeff West
The following article appeared in the December 12, 2007 issue of The Times Examiner
Ron Paul recently held a rally in Greenville and prior to the event, Rep. Paul gave this writer an exclusive interview for The Times Examiner. As the apostle Paul stated, the love of money is the root of all evil, and since the U.S. is experiencing the results of unprecedented greed with our deteriorating economy, the subprime loan disaster and a plunging dollar, we focused our discussion on these extremely serious economic problems which directly affect every American.
Rep. Paul stated, “The way I see this is, superficially, it looks like we’re still OK, you know, there’s not people out in the streets, the unemployment level’s not real high. But I think the subtle signs are that we’re in big trouble because we’ve been able to maintain a sense of prosperity because we’ve been able to borrow. The dollar has been stronger than it really, really deserved. So you take a look at this housing bubble, I mean they believed because prices were going up they could borrow against their equity, and they lived way beyond their means, the individuals. Of course, the prices are going down now, and they have to renegotiate their mortgages, and people are going to get a lot poorer. When an individual or a country lives beyond its means, eventually they have to live beneath their means in order to make up. And I think that’s what we’re in the middle of, we’re in the middle of a transition.
“I think even since this campaign has started the economy has become much more significant, because the economy’s weakened, the dollar’s going down. And I will frequently bring the two issues together, the foreign policy as well as our economy, because this huge debt that we have, the reason we have to borrow so much, is because of this, trying to maintain our empire overseas. It’s a big drain, and I’m afraid we’re going to be making the mistakes that others have made throughout history, as they spread themselves to far and wide around the world.
“In the old days empires would be built by invading, and stealing their gold, and then they lived off the gold until finally people back home had bread and circuses, and they didn’t produce anymore, then they couldn’t keep up and the gold would run out. And the way we do that, too, our gold has been the willingness of foreigners to accept our dollar. And that is what’s being undermined. I think that is the lynchpin. When the world rejects our dollar, the end stages are always very, very rapid. You can lose confidence quickly. The dollar’s been drifting like this, but eventually it could topple over and that would be very dangerous...
“[T]here’s a loss of sense of wealth. If you have stocks worth a $100,000, and the stock value goes down to $70,000...the worst part is you become less wealthy and you still might have inflation, because the government’s still cranking out a lot of money. It doesn’t raise the price of your house, it doesn’t raise the price of your stock. The money circulation pushes up the cost of your medical care. So it’s the worst thing. You get poorer, people’s wealth goes down, their house is not worth as much, and still their cost of living is going up. So, that I think is what is making people feel very uneasy, and it’s not been translated into total net unemployment statistics, but the good jobs, the textile industry, the cars and the very good manufacturing jobs, have disappeared. And that compounds it too, because in a sense their wages have been deflated, their real wages are going down, even if their nominal wages haven’t. But if you lose a good job at a textile plant here, and you go to work in the service industry, you might make half as much...There are a lot of things that enter into it, but the country’s getting poorer...
“A lot of things like the supply and demand of oil, demand is up, supplies are down, it pushes prices up. The dollar’s important, too. That’s a lot of what the other people, other than the Austrians, they don’t think about it. Because if the value of the dollar goes down, that also is pushing up these prices...See everybody said “What we need is a weaker dollar [so] our exports go up.” Yeah, maybe, until our prices go up. Then all of a sudden, the things we buy like oil, you can’t quit buying the oil, and so the weaker dollar means we’re paying more there, so for all the so-called benefits, you have more disadvantages than you have advantages.
So, since the Federal Reserve is destroying the value of our currency, how can we get rid of them? Rep. Paul said, “Not easily, because they’re pretty powerful. My position...is not to try and do it in one day, I just want to legalize the competition and allow us to circulate gold and silver and not have to pay taxes, sales taxes and capital gains tax and make it act like money...I have some new legislation I’m trying to put all together to really, know how to go ‘A, B, C, D’ to have a truly competing currency. Because the worse this gets, the more people will say, ‘Oh, you mean I can put my money in a savings account which is a gold savings account? If the value of the gold goes up, my value of my dollar, my gold dollar goes up?’ I think people, especially those who are saving maybe for their kids, for their education, you could buy gold bonds, figuring, ‘I know gold is not going to crash in the next twenty years, where the dollar might not be worth anything in twenty years.’ I think people would start using it. That way, there would be a transition without any radical changes.
“That’s what you have to do, they’re not quite ready for it yet, they don’t even think about it up there. A lot more people think about the Federal Reserve and money outside of Washington. I get a lot of response when I talk about the Federal Reserve. But in Washington, they either don’t know or don’t care, or sort of know how it helps take care of the debt, you know, monetizing debt is a real convenience, because that just sort of delays the payment. Then [with an honest monetary system] we can see what you’re doing, instead of borrowing and taxing us.”