Ron Paul: Failure of dollar will dwarf current crisis
President-elect Barack Obama has started warning that getting the country out of its current economic hole may mean trillion-dollar deficits for years to come -- but Rep. Ron Paul has very different ideas.
"I think it's just more of the same," the former presidential candidate told CNN's John Roberts on Wednesday. "I don't think it'll solve the problems. It's turning the spending responsibility over to government rather than individuals, and that's not the way you make an economy work."
"To me it's a philosophic problem," Paul insisted. "Why are we spending all this money? ... We cannot solve our problem by doing exactly the same thing that got us into this mess."
"How much pain could this leave for our children and grandchildren?" Roberts asked.
"I'm afraid that this generation's going to suffer," Paul replied. "I think the confidence eventually will be lost. ... The financial system broke down because they lost confidence in it ... but soon they're going to lose confidence in the dollar. Now that'll be a crisis that'll be much bigger than the crisis we're facing today. ... I would balance the budget and I would tell people to save their money."
When Roberts pointed out that Nobel Prize-winning economist Paul Krugman has suggested we need an immediate, massive stimulus, Paul replied, "I doubt if he ever read Austrian economics. I don't even know if he knows who Mises is, and Hayak, and Rothbard -- the people who talk about free market."
In fact, Krugman is fully aware of the economists Paul mentions -- and doesn't think much of them. He recently referred back in his New York Times blog to a column of ten years ago, in which he wrote, "A few weeks ago, a journalist devoted a substantial part of a profile of yours truly to my failure to pay due attention to the 'Austrian theory' of the business cycle -- a theory that I regard as being about as worthy of serious study as the phlogiston theory of fire."
"We haven't had free market policies in this country for a long, long time," Paul concluded. "The economists you hear from in our
universities and from Warshington D.C. are all interventionists, they're liberals. ... The culprit is really the Federal Reserve ... and once that's realized and we have enough people, it will change."
This video is from CNN's American Morning, broadcast Jan. 7, 2009.
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