Ron Paul appeared on The Mangru Report and talked about the financial crisis, the Financial Reform Bill, Glass-Steagall Act, a potential VAT tax, term limits, and… his dream of becoming a singer!
Show: The Mangru Report
Original Air Date: 05/22/2010
Date of Interview: 05/13/2010
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Dan Mangru: Now joining us for another Mangru one on one from Washington DC is former 2008 presidential candidate and current Republican US congressman from Texas, Dr. Ron Paul. Dr. Paul, glad to have you on the show today.
Ron Paul: Good, thank you. Good to be with you.
Dan Mangru: White House budget director Peter Orszag recently stated that the US is in no imminent danger of a Greece-like crisis. However, not everyone shares that opinion. What’s your take on this situation?
Ron Paul: I don’t think it’s going to be next week or next month, but we’re destined to reach that point someday if we continue to do what we’re doing. The only reason we’re not there already is because of perceptions. We are a wealthy country, we still have more wealth than any other country, and also it is perceived that our dollar is strong compared to other currencies. So therefore there’s a lot of trust placed in us. Currency and the system can be trusted not only because of economic wealth but also of military power. So there are subjective elements involved. But we have embarked on too much spending and we are at a point now where our debt is so great, we can’t pay for it. And when you get to this point, debt has to be liquidated, and that’s what the market is fighting. The market says “Liquidate the debt, get rid of mal-investment.” The politicians always say “No, patch it up, keep it going, keep inflating, keep the bubbles going.” Eventually, we will meet the same fate as the Greeks have, and then it will be trouble. It might not work it’s way out just as it had in Greece, because somebody’s going to come to the rescue of Greece, that’s going to be papered over. But when it hits us, there’s nobody to come to paper it over. And there are signs already that inflation is raising its ugly head and in truth, if you measure our dollar in terms of gold, the dollar is getting weaker every day.
Dan Mangru: Well, since the Goldman-Sachs SEC lawsuit, the financial reform bill has been getting a lot of attention. Debt problems such as subprime, deficit spending, and easy money Fed policies are not even mentioned in the bill. Could there ever be financial reform without addressing these issues?
Ron Paul: Absolutely not. It can’t be, because what they’re doing is they’re patching up a frail financial system by doing more of the same. We got into the trouble because we had too much spending and too much debt, too much regulation, and too much printing money. And once we hit the trouble a couple of years ago, what we did was we increased all of those things and it just delays the inevitable. It’s like giving drugs to a drug addict. Yes, the addict feels a little bit better, but eventually the patient dies if you don’t get them off the drugs.
Dan Mangru: Now some experts point to the repeal the Glass-Steagal act, which separated banking from stock trading and is one of the precursors of the bank crisis of 2008, where banks were allowed to take excessive risks. Would you be in favor of bringing back this regulation?
Ron Paul: You know it’s interesting, I voted on the Glass-Steagal change and I voted against it. The free market though would not have a Glass-Steagal. Banks could do what they want and they have to suffer the consequence. The reason I voted against it, that bill did have some bad parts to it, but one of the reasons I argued against it, repealing it, it was that it was going to put a greater burden on the banks and the taxpayer was at risk, at greater risk through the FDIC and other insurance programs of the government. So I saw that as a greater burden on the taxpayer and voted against it. But I’m for the free market and free market banking, therefore you would have no rules against banks being involved in commercial and investment banking.
Dan Mangru: It’s no secret that you’re against any type of new tax, and recently the Obama administration has been floating out the idea of implementing a VAT tax. Would you support a VAT tax if it were accompanied let’s say by a elimination of the corporate tax or a personal income tax removal as a more efficient means of taxation?
Ron Paul: Well, there’s a slight possibility if it was very very clean and you absolutely prohibited an income tax or corporate tax from existing, if you had only a value added tax or a sales tax to replace it, you had certainty that’s what would happen, yes, I’d be pretty tempted to go along with it. I had not gone on any bills like that, whether it’s so-called fair tax or a VAT tax because inevitably they always need more money here. And just the whole idea that, let’s say we come up with a VAT tax. Oh, we’re only going to make it one percent. It’s not going to be a great burden, it’s going to take care of all our problems. I would be absolutely opposed to it, because that of course is the way the income tax started. One percent tax, and before you know it, look at the tax code that we have now. So unless the people are sincere about cutting back, you can’t really revamp the tax code. The tax code and the burden of taxation is a secondary consequence to the attitude of the American people they have for what they want their government to do. As long as the American people think that we have to police the world and have this world empire and that we have to take care of people from cradle to grave, no tax system will work. You have to change the philosophy of government. Then you can do away with the income tax and not replace it with anything just as we had before 1930.
Dan Mangru: Now for some time the US has tried to label China as a currency manipulator and has publicly pressured China to revalue their currency. If you were in charge, what would your approach be to this?
Ron Paul: Just totally ignore them. I mean, we manipulate our currency all the time. I mean, we work real hard at weakening our currency. It’s interesting that we have a weak currency. To me, that is a problem and we’re demanding that we need an even weaker policy against the Chinese Yuan.
Dan Mangru: Now, with the Tea Party gaining movement here in the United States, there’s a growing amount of Americans that feel that once you’re elected to government office, you should do your job and then leave as opposed to being in the office for life, as many modern day politicians tend to do. Do you support that stance and and would you ever call it a day in Congress after your 20 plus years of service?
Ron Paul: I don’t think ultimately term limits will solve the problem. I think the only thing that solves the problem is the philosophy of government and what the attitude is of the people and what they think the world government ought to be. Because terms limits would be fine if you knew the people that were coming in had new ideas and different ideas and want to change things. That is not the answer but if the vote came up again, I’d probably still support term limits because it would be a token help but not a solution.
Dan Mangru: A final question. Congressman Paul, you’ve dedicated your life to medicine, finance, and government, yet there’s still many talents you possess that a lot of people just don’t know about. For instance, you were track and field champion growing up. If you had to choose a different career path, what do you think you’d be?
Ron Paul: Well, if my knees were to have held up, maybe I could have made it a little further in sports because I love sports, I love track, I love baseball, and I love football. When I was in high school and in college, I was large for my age, especially in high school. So I think a career in athletics would have been just great. But if I had my real dreams of doing something different that getting into politics, I would come back as a singer. But I have no chance of doing that in this lifetime, so I’ll have to just dream about that.
Dan Mangru: Ron Paul, coming soon to American Idol?
Ron Paul: Hardly.
Dan Mangru: Ron Paul, former 2008 presidential candidate and current US Congressman from Texas Congressman Paul, thank you very much for coming on the show today.
Ron Paul: You’re welcome.