Ron Paul to Congress: You’re Going to Guarantee a Depression!

Ron Paul’s address to Congress, Oct. 3, 2008

“Madam Speaker, I rise in strong opposition to this bill, because it won’t solve our problem. It is said that we’re in a liquidity crisis and a credit crunch, and all we need is more credit. The Federal Reserve has already injected over a trillion dollars worth of credit, and it hasn’t seemed to help a whole lot. Injecting another 600 or 700 billion dollars will not solve the problem.

I think one of the reasons why we’re floundering around here is that we don’t understand the problem, because instead of it being a credit crunch I think a lot more serious than that and that is, I think what’s happening in the market today is signalling something much more draconian.

Because it’s probably telling us that our government is insolvent, that we’re on the verge of bankruptcy, and big things are starting to happen, and we don’t quite understand it, so we fall back on the old cliches: What we need is more appropriations, more spending, more debt, and more credit in the market, that means more inflation by the Federal Reserve system. And yet that is what caused the trouble.

We want to do this, it is said, to prevent the recession or depression, because that is “unbearable”. But the truth is, you should have thought of that about 10 or 15 years ago, because the financial bubble created by the excess of credit and the lowering of the interest rates is the cause of the recession.

The recession is a demand. It’s a must. You can’t avoid it. Yes, it’s been papered over several times over these last several decades, but that just made the bubble bigger. But the message now is you can’t paper it over any longer, so the recession and/or the depression will come.

My sincere conviction is that by doing more mischief and not allowing markets to adjust, debt to be liquidated, you’re going to guarantee a depression. It’s going to be prolonged, the agony is going to be there a lot longer than if you allow markets to adjust. Liquidation of debt, let the bankruptcy occur, let the good assets come up, and let it react.

This idea that there’s just not enough regulation is completely wrong. There’s too much regulation and lack of regulation of the Federal Reserve system and the Exchange and Stabilization Fund.

Earlier today, Ron Paul was interviewed on Fox Business:

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  • Dmonypeny

    I have a question. What countries economies are not credit based? I would suspect China. The way our money is even created is around debt. You can not have money without debt crazy as that sounds. What countries do it different and do it right? I imagine they will be the big winners when this card house comes down.

  • GlenDora

    It really comes down to the American consumer. About 3 years ago, I was approved for a sub-prime ARM. My then girlfriend and I really sat down and considered it, thinking we would be able to refinance when we had better jobs, more money saved, etc. Then reality set in. She and I wisely came to the conclusion that there was no way that we were going to be able to afford that mortgage if the rate went any higher than it was at that time. WE MADE THE WISE DECISION. We did not risk our credit or our lives for a house that we knew we might not be able to afford. And as a reward, my tax dollars are going to bail out the retards that signed on the dotted line and to bail out the corrupt companies that lent to people that they knew would never be able to repay the loans.
    I say to hell with them all. Both poarties made a choice. They chose greed over wisdom. And now you must reap what you sow. Eventually, citizens and companies acting irresponsibly have to stop running home to Auntie and Uncle Sam to bail them out when they mess up big. Where is the self-accountability?

  • I agree with Andrew and Dan, I love it when idiots try to argue with Ron, have I been the only one to notice that people don’t TRULY understand what he’s saying, like they’ll listen to him make a statement, and then they’ll like generalize it and then try to rebuttle. But Dan your right, Ron isn’t even affected he’s just like no you don’t understand a damn thing i just said, this is what i said and this is why your stupid and should be fire. at least that’s what I hear… He’s got way more patience than I, i would of reached for the closest piece of rebar and just started brow beating people with a smile on my face, cuz i’d just plain flat lose it.

  • kim carrier
  • kim carrier

    Congress will continue to ignore their constituents at their own peril and at the peril of the entire country. The vast majority of the public did not take on more debt than they could afford, and they [the public] are not as ignorant as lawmakers would try to make us believe. Maybe the people were woefully ignorant in the early days following the birth of this nation, thus we have the electoral college, but that was a communication infrastructure issue that is not relevant today with mass media and internet, etc. We would be better served by direct democracy than by this perversion of a democracy or capitalistic feudal system that we have now; controlled by and serving special interest– not the people. The American public are mostly decent hard-working, honest people, who’s only fault has been the misplacing of trust in corrupt leaders.

  • Dan Beaulieu

    Andrew Said:

    “I love the ridiculous comment about how we are a credit based society and we just have to live with that.”

    I agree and good ol’ Ron really shut her up!

  • I’m really scared Ron

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  • jojo

    Pelosi eyecandy? you must be from the UK

    I’ll vote for Palin
    a) because she pisses other women off
    b) we’re all screwed so choose your poison. hate to think what she’ll look like in two years though..

  • Andrew

    I love the ridiculous comment about how we are a credit based society and we just have to live with that. Thats the problem, duh. We shouldn’t be a credit based society. The constitution doesn’t allow for it because this is the problem it solves. Is she supposed to be an expert journalist? Oh wait she’s probably just there for eye candy so people’s heart rates jump when they see her and they think their new found surge of blood is the crust of intellect rising in their brain, when its just a hormonal response to some T and A.

  • jojo

    Did you see Nancy Pelosi’s face last Monday after the House vote? .. someone must have told her something along the lines that according to the Bank for International Settlements the amount at risk in the entire derivatives market was $15 trillion.

  • Ben

    Our country is embarrassing! What a bunch of fools!