Channel: Fox Business
Neil Cavuto: With me now is the guy who really was the clarion call in all of this before it was cool: former presidential candidate, Texas Congressman Ron Paul. Congressman, what do you make of these developments today?
Ron Paul: Well, I think they’re responding to what they’re hearing, but they still don’t quite understand it. I would say the congress as well as the president know there is something going on; but they’re lost at what to do because they can’t change the philosophy of government. They can’t change the welfare state or the warfare state. So they have to talk about this. Now this talk of freezing a few of the expenditures, but it doesn’t start until 2011, and it won’t happen. You know, that proposal of Obama actually would allow foreign aid to go up, but the air traffic controllers would be frozen. Can you imagine that passing the Congress? This is just talk.
Neil Cavuto: But you know what makes it odd though, congressman, as you astutely pointed out on this show and many others in the past, is that it’s like we’ve been on great old binge… I’m going to commit to starting it out, let’s say, January 1st, but on December 31st all I’m doing is pegging out the whole day; one last hurrah. But now we had a year of the last hurrah, of spending that’s been out of control and in fairness to this president, was also out of control with the last president. Now all of a sudden we found discipline? I’m not sure I see it.
Ron Paul: Well, see that’s in total conflict with their philosophy. Because the philosophy that is prevailing here in Washington is that when you’re in a slump, you need the government to spend more money. And some of us believe the government should spend less money and the people should get their money back with lower taxes, and they should spend the money and make the decisions. So that isn’t changing. So let’s hope I’m completely wrong about the economy, I think it’s going to get worse. What are they going to do? Hesitate, and not give us…
Neil Cavuto: Wait a second, congressman. So you don’t think that we’re going to go back into a double dip here? Another recession? What do you think?
Ron Paul: Well, they call it ‘double dip’, but who go the benefits of last year’s Wall Street? You think those 20% who are unemployment or underemployed have felt like things are doing better? So, no. We can call it a double dip, whatever you want to call it. But I think there will be a need. Look at the housing market, the commercial property market. I mean, there are just so many more problems, and how long is it going to be until we get our manufacturing jobs back? I see the slump having gone on for over 10 years when the NASDAQ bubble collapsed. We haven’t seen any real jobs being built. I mean we continue to lose jobs it’s just so much more dramatic in this last year or so.
So yes, we’re going to slip and slide, but we may have another major crisis the way we’re going since we think that spending money and borrowing money and printing money works, that we’re going to end up with a dollar crisis and then all these numbers won’t have any meaning whatsoever. If you went through an inflationary period and a slump, and if you have something worse than the inflation of the 1970s, revenues crash, inflation costs go up and these numbers which seem to be astronomical now…
Neil Cavuto: You might be right, congressman, but that hasn’t happened yet. And the argument is things might be too weak to see inflation gallop out of control. You don’t buy that?
Ron Paul: Well, no. Take, for instance, the suggestion made that they will tax reserves. What are the banks going to do? They might push them out the door, they’ll get more lacks of regulations or go back to this whole idea of trying to stimulate the economy. Yes, the natural market forces want people to back off and not spend and save and pay down their debt. But government does exactly the opposite. They want you to spend and borrow and inflate.
As a matter of fact, the government wants inflation because they can never pay this debt. So they look for a devalued currency, because you pay back ten cents on the dollar and it’s not as big a difficulty as paying off the debt. So that’s what they’re working on. They’re frustrated because they don’t have the inflation that they’re looking for, because they [...] inflation with the healthy economy, and that is not the case at all.
Neil Cavuto: Very good points, congressman. Thank you very much. Good to see you again.
Ron Paul: Thank you, Neil.