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Ron Paul on CNN: Economic Conditions Have Not Changed

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Well, if you're feeling better about the economy you're in good company. More than 90 percent of leading economists say they see the recession ending this year. They were surveyed by the National Association for Business Economics, and these expert forecasters say they expect a moderate recovery but unemployment, often known as a lagging indicator, continuing to rise. And in a recent CSPAN interview, President Obama was asked about the $1.7 TRILLION debt the government has racked up, along with an $11 trillion deficit, and he had this sobering response: "We're out of money." One member of Congress has been sounding the alarm on out of control spending. He's Texas Republican Ron Paul,and he joins us this morning from Clute, Texas. Congressman, as always it's good to talk to you this morning. Good morning. It's nice to be with you. So President Obama says that in the short term government needs to spend this money to salvage the overall system. Do you agree that short term spending is ok so long as it's not protracted? The end goal is to reduce our debt and deficit? (Paul) But he contradicts himself. He wants to spend more money, but he admits we don't have any money. So the question is, where does he get the money? Well, we can't tax the people any more. They're overtaxed, the economy is weak. The common sensible thing to do is to cut spending, but nobody wants to cut spending. Everybody gets everything that they want in Washington, whether it's overseas spending, or any welfare's endless. Just this week the President promised $100 BILLION to the IMF, and he says that we don't have any money? I mean, it makes no sense. It's just absurd. People are outraged over this. They can't figure out what we're doing in Washington, and I go there on a regular basis. I can't figure out what they're doing. They seem to live in a different world, and they're not living with reality. To get out of bankruptcy, when you don't have any money, the goal is to spend more money, run up more debt, makes no sense what so ever. (Anchor) Does Congress have the ability and the will to try to put some strings on that, as you guys talk about these budgets? Are there timelines in place so that it's not just rhetoric, but there is an actual process of showing how we're going to eventually try to make sure we pay this money back? (Paul) Yes, they have the absolute responsibility, but they also ought to realize that history shows that once you get a certain amount of debt run up by a government, it's never paid back. And we're past that point. Debt is always liquidated. The only question is how do you liquidate debt? Now General Motors is going through a liquidation of debt and that's the way you should do it. Now governments don't do it that way. They liquidate debt by devaluing the currency and paying back their debt with money that has no value.That's what they're working on. They want inflation. They want to be able to take this huge amount of debt, and if we owe $11 trillion and you have a 50% inflation rate, you know, you're down to $5, $5½.... (Anchor) Right. (Paul) $5½ trillion dollars.That's what they're working on. They're begging and pleading for inflation. (Anchor) The interesting thing, I mean, you've talked a lot about your concerns over the value of the dollar, and the fact that the Fed can just print money. You call that whole notion absurd. Yesterday we saw a little bit of a bounce in the dollar. People still want our debt across the world. (Paul) Yes, that is true because everybody else has a fiat currency too, so when the dollar goes down, it doesn't necessarily mean the yen and the euro is going to do well. It means that prices may go up and will likely go up in all currencies, but once they panic and get out of the dollar... so far they're going to the dollar, that's right. The financial system has collapsed, the house of cards has come unglued, and that's why we're in such trouble. So the dollar fiat's standard has broken down but people will hold dollars, they will buy Treasury bills, China's buying them, but they're between a rock and a hard place. because they don't want to destroy the dollar but eventually it has to happen, because you can't create $2 trillion in one year and run up deficits of that magnitude and not expect the value of the dollar not to go down. It's coming. It's coming soon, maybe a year or two or three, but it will come, and it will be a lot worse than what we have just gone through. (Anchor) So what about.... (Paul) So this reprieve that we're having... Go ahead. (Anchor) No, I know what you're saying. What about some of these assessments that we *are* seeing some signs of life in the economy as we just talked about before we brought you on.Some of the leading economists see the end of this recession coming sometime in 2009. Perhaps does that support the notion that maybe some of this spending to get the economy back on track has been working? (Paul) Well, I think a lot of people believe that, but I think they're totally dreaming about it, You can look at spurts in the 1930's but it usually just led to bigger trouble down the road.. In 1939 unemployment was like 18%, so it never improved with all this interference in the '30's and we're doing the same thing again, only thing is, it's a much bigger problem we have this time. So because you have these blips, people are always hopeful, but conditions have not changed. We have not liquidated the debt. We have not liquidated the malinvestment. We still have 19 million uninhabited houses up for sale, and we're trying to prop up housing prices, and we're trying to get people to build more houses. It makes no sense. Even the bankruptcies. General Motors should have been bankrupt a year ago and it would have been cleaned up, but now we're involved in the bankruptcy and it's become politicized. Our government is dictating what the laws should say. Our courts should deal with this. We shouldn't decide which bondholders get the benefit. So it is a mess that we've created, and we believe it's a lack of regulations that we need. But believe me, free enterprise and sound money did not bring on this problem. It was interventionism, corporatism, and crony capitalism. This is what gave us our problem. We're going to remain in this mess until we realize what we need is more freedom, sounder money, get the government out of the way, and let the debt be liquidated, and get rid of the malinvestment. We don't need more of the same that created our problem. (Anchor) Alright! Well, Congressman Ron Paul it's always great to have you to get your point of view and your take on things.Thanks for being with us this morning. (Paul) Thank you! (Anchor) We always know where he stands when he wraps up an interview.

Video Details

Duration: 6 minutes and 22 seconds
Country: United States
Language: English
Producer: KramerDSP
Director: KramerDSP
Views: 223
Posted by: kramerdsp on May 30, 2009

Ron Paul appeared on "CNN American Morning" to talk about President Obama, the Dollar and the economy.

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