Venue: Joint Economic Committee Hearing
Ron Paul: Thank you, Madam Chairman and welcome, Dr. Brummer. I appreciate this opportunity to attend this hearing. I’m sorry I have to leave shortly to do some votes, but I did want to make a couple of points and maybe you can follow upon this later on.
In the several years that I have been here I have never met anybody that is not for a sound economy, everybody is for the economy. Everybody debates the issues and what we should do. We have a Federal Reserve that dictates the money supply and what the interest rates should be. And they want a sound economy and then the Congress rates the regulations. We have regulating agencies that are supposed to give us a sound economy, and yet we have probably real unemployment close to 20% and still a lot of problems.
Although I find that everybody wants a sound economy, nobody talks about a sound dollar. And I know you’re interested and have worked in the monetary field. But we don’t talk about what sound money is, and I don’t know how you can have a sound economy without a sound dollar. As a matter of fact, we talk too often about a weak dollar. We allow the Fed to devalue the dollar by printing too much money to accommodate the Congress. At the same time, we say that the secretary of treasury has the job of maintaining a strong a dollar, at the same time the dollar keeps going down.
And this has a lot to do without our imbalance of payments and all the problems that we face. But a lot of people say this is great, you know, a weak dollar is good for exports. Well, you know if you look at it from an individual level and you’re a saver, who wants a weak dollar? Who wants to have their dollar lose their purchasing power? And yet we actually say “Yeah, we should”. And I hear comments that come across that say, “Well, it’s okay to have a weaker dollar as long as it’s orderly”. Well, if a weak dollar is bad, if it goes down suddenly or orderly, you’re still hurt and you’re paralyzed. There should be no […] in economics that argues the case it is good to have a weakening dollar and see your purchasing power dried up.
So my concern is that we don’t talk about the value of money. On the books still, and the Constitution still say that there is a definition for a dollar in terms of a weight for something that governments can’t create… precious metals. But at the same time, under the law… and the laws says that the Federal Reserve notes are legal tender and everybody has to obey all he laws doing it, because a Federal Reserve note is a dollar. If you’re asking, “What is a dollar?”. Well, we don’t know what a dollar is, but there is nothing on the books that says that a Federal Reserve note is a dollar. This is like building a building with a measuring rod that constantly changes. I cannot see how you can ever have a sound economy without a sound dollar and getting back to defining what a dollar really is. Our founders knew about this, they advised us and we have ignored it and we’re in a mess.
I yield back.