Ron Paul and Rand Paul talk Economics

Ron Paul and Rand Paul were interviewed by Eric King on King World News, addressing questions about the Audit the Fed bill, the economic crisis, the exploding U.S. debt, and the coming economic collapse.

Ron Paul and Rand Paul Interview
Click the link above to listen now, or download the interview as an MP3 file at this page

Show: King World News
Host: Eric King
Date: 06/24/2010


Eric King: Joining us now is the future senator of Kentucky, Dr. Rand Paul, and Congressman Ron Paul from Texas. So much is happening right now. You have the money bomb coming up, Rand, on Monday of next week, and for Ron, we have the Audit the Fed bill, and more. But let’s start off with Rand, I want to ask you about the media attacking you, sort of the dirty side of politics, right Rand? How has that been for, were you surprised and has the energized your base? What’s happened there?

Rand Paul: Well, I kind of laughingly said it’s kind of like the Dickens novel: these were the best of times and the worst of times. We won by 24 points in the primary, we had a big victory. But within 12 hours, the media that didn’t really support me, but at least had been somewhat fair to me in the state, completely pivoted and began attacking me, really almost as if they were a part of the Democrat campaign. But I think we’re ready for it. They always try to do things like paint the Tea Party or paint me as extreme. And the way we respond is that having a 2 trillion dollar deficit, like we do now, that’s rally extreme. Having 400 billion dollars in interest in one year, that’s an extreme. So I think we can turn these arguments right around, and a lot of the things we’ve run on are very popular.

Eric King: Congressman Paul, I have some other questions for you, but I just can’t resist here: what has it been like for you, as the father, watching your son. You know, he blew out his opponent in the primary, he’s leading his opponent now in Kentucky. What’s that been like for you, watching your son’s very quick rise in politics?

Ron Paul: Actually you get more emotionally involved than you do for your own. I mean, you’re responsible for your own. I’ve always been pretty stoic about politics and even when I first started, I never really expected too much, so I just did what I thought was true and went about my way and let the chips fall where they may. But I think when anybody close to you, or when your kids get involved, all of a sudden you sort of feel for them. So it’s a little bit frustrating, but basically I’ve stayed out of it. I think Rand had me up there one time, and he knew and I knew that he had to do it on his own. He’s got a base of his own, I’ve tried to help a little bit, but I wasn’t out there campaigning.

Eric King: Rand, before I move on, I have a question for Congressman Paul and some others for you. But do you call dad for advice sometimes?

Rand Paul: Yes, we talk about politics, philosophy, all kinds of things. And not so much on the nitty-gritty of the day to day campaign, but what’s been an enormous help is that a lot of people who like my father nationally, have contributed and they’ve come to us through the money bombs, and through the Internet. And we couldn’t just have done it without that, so getting started and presenting the message are two different things. But really getting started, I owe a lot of that to people who discovered my dad through his presidential run.

Eric King: Congressman Paul, your base is really so massive and sort of unprecedented, I think, in a lot of ways in politics. That unbelievable one-day total raising of funds that you had the last time you were running for president. But can you give the listeners an update on the Audit the Fed bill? You’ve worked on this for decades, and I hate to ask this question in a negative way, but are you disappointed at how this has unfolded, or has it been a great success in the end because it is now in front of the American people and an active topic of discussion?

Ron Paul: I think it’s both. Of course, there is a little disappointment because you expect to, or at least you want to accomplish more. But when you think about what has been accomplished, I would say that the supporters have done amazingly well. I’m not one that claims I can go around and pressure my colleagues or beg my colleagues to sign on to a bill and yet we ended up with 320 co-sponsors. And they mainly came from the grassroots pressure on the members of Congress, because we’ve taken this issue and we’ve nationalized the issue and because of the financial crisis people have been very interested. I think the Federal Reserve is going to be an issue for a long time to come until they clean up their act and we have a new monetary system until we’re past all these crises that we’re involved in right now.

But the way it stands now is that essentially it looks like when the conference bill comes out, even though HR 1207, that Audit Bill, was put in House version, it was not kept in the conference. And they have a few token things put in there that the Fed has to do this and has to do that. But since the Fed agreed to it, you know there are going to be loopholes and they’re not going to really give us the information. One thing they strongly resisted was information on foreign transactions as well as what they do with the discount window. So they have ways of getting around this. But the power that they have and what they were able to do shows you, even more so to the American people, that we need to know more about it. And this is a very, very important issue. So in that way, I’m very pleased with what has happened.

Rand Paul: I have one quick question for my dad. Will we find out from the partial audit what they paid AIG for the credit default swaps, will we find out whether they paid them at par, or whether they paid them any discount?

Ron Paul: They’re supposed to give that information to us, but sometimes what they’ll do is they’ll tell you one side of it but not the other side. They’ll say, “Oh, that’s proprietary and AIG has this”, and not give you the details. So theoretically we’re supposed to find that out, but I wouldn’t be surprised if they figure out a way to avoid giving us all the details.

Eric King: Rand, you brought up the massive debt that we have; we’ve talked about this before. Is that the No. 1 problem the country faces right now in your mind?

Rand Paul: Yes, and when you go around to these Tea Parties, which are the largest gatherings anywhere in Kentucky, if you ask people, they’re concerned about the debt, they’re concerned about passing it on to their kids and grandkids. But they’re also concerned about the imminence of what it does to the economy, what a drag it is to have so much money consumed by government. And I think one thing that’s pretty telling is, you know, you have a Federal Reserve chairman, Bernanke, and they usually don’t try to use very inflammatory language. But a week or two ago he said that the debt is unsustainable. And that, to me, is a particularly strong word: “unsustainable”. And it really should send us all a signal that we cannot just stick our head in the sand and just keep borrowing and borrowing and borrowing, because I think there will be a limit and there will be repercussions.

Ron Paul: May I make a comment on that?

Eric King: Sure.

Ron Paul: All the Federal Reserve board chairmen, as far back as I can remember, always come and they tell the Congress that they don’t like these deficits and they complain; they always want to cut the deficits back. But the Federal Reserve has total control over how much deficit spending there would be. Because all the Fed has to do is cut back or stop monetizing the debt, and it would end, because if the Fed wasn’t buying up during the crisis … they literally brought 2 trillion dollars worth of debt; private debt as well as public debt. But if they quit doing it or cut back, interest rates would go very, very high and the market would take over, and all of a sudden they would say, “Oh, this can’t be sustained.” So [Bernanke] points the finger at the Congress, but really it is a combination of the politicians who love to spend and the Federal Reserve that accommodates them. So that always bothers me when they do that and there have been times when both Bernanke and Greenspan have been before the committee where I challenged them on this. But they usually don’t respond.

Eric King: Congressman Paul, let me ask you, as we talk about the debt and the Fed being really a culprit in all of this; it’s absolutely true. Because there’s talk at some point by individuals, very respected individuals, that we’ve gone too far in the United States. And I’ve heard you warn about this, Congressman Paul, repeatedly over the years. Have we reached a point where we’ve gone too far and we’ve passed the point of no return? Can we rescue the situation, or do we need a reset here?

Ron Paul: Oh yeah, I think we have gone too far when we started. I think we went way too far in 1971. The only thing we don’t know about is how long it will last. I think it has surprised few of us that since 1971 we’ve had the whole world on a single fiat currency, which is the dollar, because it’s the reserve standard. So, to me it’s amazing that it’s worked this well, but the fact that it went longer than we expected just meant that the bubble was bigger than ever, and the derivatives are still sitting out there; trillions and trillions of dollars worth of derivatives on the books that have not been liquidated. The ownership has been transferred from some banks and others over into the Federal Reserve, and the government buys these, so the taxpayer is getting stuck.

So no, we’re past that point. I think paper money can’t work, and you just don’t know exactly the day it ends or how it ends, but it usually ends with a calamity and the end stages go much faster than the gradual stages. I mean, we’ve had a gradual erosion of the value of our dollar when it’s been devalued against gold since 1971 like 90%. And this is going to continue. And one day, though, people are going to reject it, and then there will be a panic and then there will be a new standard. And the question is, will they come up with a better standard than we have, or will they put something together that is only short lasting.

Eric King: Rand, let me ask you the same question: have we gone too far? Because your father, as you know, has warned the United States citizens about this for so long, he’s pounded the table on gold. Here we are in this big secular bull market in gold. And people all over the world, Rand, are trading-in their paper money for gold, for silver, or whatever they can do to ensure their net worths. So what do you think as you watch this? Your father has really been redeemed here, and the country and a lot of the Congress have rallied around him. Is that sort of nice for you to see after all these years?

Rand Paul: Yes. And I think the one thing that struck me was during the panic a year or so ago when we had that credit crisis, is that things aren’t exactly mathematical when you get to a crisis situation. We know that when you double the money supply, prices will rise, but it’s not always mathematical. But it’s always not predictable and very mathematical and orderly when it unravels. And we came very close to unraveling it at that point. And the question is, you can have a lot of emotional panic at that time, the government was promoting panic as well. “We had to pass the bank bailout or there would be chaos.” But I can see something happening not in 2019 or 2037 when Social Security and Medicare ultimately can’t sustain themselves. It could be more imminent that you could have the emotional detachment or the emotional run away from the dollar at some point. You know, we’re seeing a little bit of that run into gold at this point, with gold at its highest than it’s ever seen before.

Eric King: Congressman Paul, if I asked you to sort of put a timeline on it … this is a bad question in a way, because it really deals with the collapse of the United States … but if we don’t turn things around here, your repeated warnings about this collapse will take place. I know it’s not something you want to have happen, but are we in a short window now? How short is the window that you see when you look at this at this point?

Ron Paul: All I know is everyday we’re one day closer. But my sense is that even within a couple of years, something probably is going to happen, because there is going to be some unknown event. If, for instance, tomorrow somebody launches some missiles at Iran, and oil doubles in price … I mean, something like that could panic the whole world out of dollars. The fact that I think it could go a couple more years means that it could go double that. Because it seems like there is so much at stake, that all the central bankers of the world want to keep this together and they’re all invested in the dollar and they keep thinking that if we could just keep America alive and they keep buying things, it will be okay. Krugman drives me nuts, because he says what we need to do is to spend and forget about the damage. And all I can think of is, what if you had a loved one come in and they’re deeply in debt and they have 25 credit cards and they come for advice and you said, “What you need is one more credit card and you need to spend more money.” And this is what the Krugmans of world tell our government. You know, we’re totally bankrupt, and they say “what we need to do is spend more, borrow more, print more money.” And, of course, that is going to hasten the pace. So we’re vulnerable, we’re very vulnerable. If we woke up next week and we had it, I wouldn’t be that surprised. If we go for 4 or 5 more years, I guess I wouldn’t be surprised either.

Eric King: Congressman Paul, let me ask you this, and then I’ll turn to Rand with the same question. Jim Rickards was meeting very recently at the U.S treasury and the FDIC, and he talked to me about the fact that insiders their believe… I mean they believe that asset prices will just come back, right? And on these various other things that have sort of become worthless or close to worthlessness? They’re living a pipedream. It’s almost like it’s a fantasy they live in. It’s very disturbing, I think, for some of us. And I don’t want to speak for Jim Rickards here, but just for myself, that these people sort of believe their own rhetoric as we’re in almost a depressionary cycle here. Is that something that disturbs you, that we see that in government?

Ron Paul: Well, I think under today’s conditions – and that’s what you’re talking about, that these crisis will come back in the dollar evaluations that we have. But some of that can be true. I don’t think owning a piece of property and having a house can that’s fully paid for, when runaway inflation comes… I mean, it’s a hard asset, and in dollar terms it may all go up, but the dollar is going to be worth so much less. So you have to be careful, but under today’s conditions where the dollar is measured in purchasing power of today, for the stocks too come roaring back? I mean, who’s holding their breath for the NASDAQ to reach all-time highs again? I mean, it’s crazy. And in the same way, under today’s conditions, for the Dow Jones to be back at record highs … I think you’re absolutely right, that’s a pipedream.

Eric King: Rand, I’m going to hit you with the same question. Government insiders and whatnot are in the belief that we can just keep the system rolling along. A lot of fantasy there, would you say?

Rand Paul: Yea, and I think one very worrisome statistic I saw this week was that Fannie Mae and Freddie Mac now own a 168,000 homes, which is basically the equivalent of the amount of homes in Seattle. So that doesn’t show a really good housing market, that shows continued problems. The other thing is that they predicted over 10 years, that giving Fannie Mae and Freddie Mac extended credit or unlimited credit would cost 160 billion dollars over 10 years. But they’ve already spent 145 billion in one year. So it really shows how government has trouble predicting the future. And really, it’s just abysmal at predicting the future, and we shouldn’t have government involved with so many things, or involved to such an extent that we need to refine government prediction.

Eric King: I just want to ask the two of you this question in closing. Rand, I’m going to start with you and we’ll close here. But many of us in the United States, this is the entire Ron Paul base, and a lot of people with Ds and Rs that click those at the ballot box, right? So it’s on both sides of the aisle as well as the libertarians. But there is a concern about the loss of freedoms in this country, about cameras being everywhere, is that the second major concern that you have, Rand? And then I’m going to hit your father with the same question.

Rand Paul: I think they coincide. There has long been this debate whether you can have economic freedoms and not have personal liberties. In China they’ve gotten some economic liberties, but don’t seem to have any personal liberties. And I’m not sure they can go on without coming together and without having both. We’ve been lucky in this country to have both economic liberty and personal liberty. But yeah, there is a gradual erosion. And we get to the point where people really don’t own their property anymore. If you want to dig a hole in your yard for a pond, or you want to fill in a pond, you got to get permission from the federal government because you really don’t own your property anymore. And I think that makes it hard for economic development as well, because you have uncertainty in what you can do economically. So I think you have to have both; both political and personal freedom and economic freedom.

Eric King: Congressman Paul, same question to you. Is that really high up on your list? Maybe the number 2 behind the loss of freedoms?

Ron Paul: Well, I’ll have to say that it’s on the top of my list, because I believe that if you have liberty, then you have prosperity. That’s why I’m convinced in my own mind that that is what I’ve been doing for 30 years: campaigning for liberty, and I will continue to do this. And then if you have your freedom, and you have property rights, you have free market and sound money, you don’t have to worry about your prosperity.

So if you talk about taxes and debt and regulations and unnecessary wars and economic intervention, all these things; that is a consequence of the lack of respect for liberty and a lack of understanding why rights for individuals are not collective, and if we understood that, we wouldn’t be worrying so much about runaway government. Everything would be restrained, they wouldn’t be allowed to print money, they wouldn’t be allowed to run up deficits, they wouldn’t be allowed to tax us. If the goal of our government and the purpose I believe was designed in the Constitution… the whole purpose was to restrain government and protect liberty. And if we didn’t that, our problems would be basically solved.

You will have to have some adjustments, and that’s why the politicians can’t or won’t do it, because it’s like withdrawing an individual from drugs. The withdrawal symptoms are pretty rough. But if you continue, the symptoms and the problems are going to be that much worse. So yes, you could, but most likely we won’t get the help we need in Washington that soon, but we still need to fight the battle because we’ll have to pick up the pieces, we have to design something. And it should be along the lines of those rules that we were given a couple hundred years ago, because they were the greatest rules ever written and we have the greatest prosperity ever. So we have guidelines.

I’m more optimistic than I might sound, because I think when the Soviet system collapsed, the Russians didn’t have the traditions that we have. So we follow our tradition and our instincts, and that’s why I think there are a lot of healthy ideas and concerns in the Tea Party Movement, and hopefully we’ll pull ourselves out of this. But it won’t be without some payback. We’ll have to suffer a bit for living beyond our means. When an individual or a country lives beyond its means, it has to live beneath its means in order to get back on its feet. One thing is, if you do the right thing, the pain and suffering will be much shorter than it will be if we continue to do what we’re doing.

Eric King: Alright gentlemen, I’m going to close it there. Rand, would you mind giving the listeners an update on how they can contribute to your campaign. You got this money bomb coming up on Monday, what about some websites they can go to for some information please.

Rand Paul: You can go to and there will be a money bomb on Monday. We’re hoping to raise enough money to really jumpstart the general campaign. And we’re going to need it if the entire national Democrat Party attacks me on a daily basis. And our only chance is if the liberty movement gets behind this campaign and pushes us forward.

Eric King: And I’m going to have that information linked right from your interview page, so people can click on that. It will have the information on the money bomb, the Rand Paul for Senate 2010. We’ll also have Michael Nystrom’s site, DailyPaul on there, Campaign for Liberty, Jesse Benton [?], etc, etc. So gentlemen, thank you so much. Congressman Ron Paul, Dr. Rand Paul, future senator of Kentucky, thank you so much for joining us on King World News.

Ron Paul: Thank you.


    The Ponzi scheme Federal Reserve is mathematically destined for national bankruptcy. They received $8.4 trillion from the auctions of Treasury securities and never reported the income to Congress. This looks like embezzlement. It was clear profit. Doesn’t Title 12, Section 247 require the BOG to make a “full report” to Congress? Ref.


  • Andrew

    I’m a fan of Rand & Ron (both), though (unfortunately) had to vote for Chuck Baldwin in 2008 (due to Ron’s concession to him, after not getting the party-nomination).

    I’m not an ultimate fan of Libertarianism, because they like to attach themselves to a 1960’s-mentality of ‘Civil Rights’ ( a myth destroyed by former Communists, such as Manning Johnson: ) as well as “Austrian-economics”. (Why are we looking to Jewish financiers for examples, when our Founding Fathers already had these issues covered? Have Whites no understanding of what makes us free, when (after all) our people built this nation; not the Jews or any other nationality…putting it bluntly).

    Glenn Beck & Judge Andrew Napolitano are hypocrites for claiming their ‘Independent’-leanings, yet they’re on a neo-con station (‘Fox’) daily. Napolitano frequently has Ron Paul on his show, who now claims he’s pro-‘Civil Rights’…yet endorsed Thomas Woods’ “The Politically-Incorrect Guide to American History” (which states that ‘Civil Rights’ has merely been a ploy to deconstruct the middle-class, ruin White communities, promote Black- nationalism, & the list goes on…).

    To top it off: Glenn Beck talks about Obama’s mentor, who was Saul Alinsky. The neo-cons (such as Glenn) fail to mention that Alinsky was also the mentor to Martin Luther King, Rosa Parks, Pete Seeger, etc…who were all trainees at the ‘Highlander Folk-School’ in Monteagle, Tennessee (during the 1950’s & 1960’s) under the Marxists.

    To come full circle: Napolitano appears on ‘Fox’, being a Ron Paul-advocate; yet (in 2008) ‘Fox’ contributed to hiding Paul’s primary-debate results, and promoted him as a “conspiracy-theorist” nut-job. They have had a year & a half to apologize for weakening his influence on their network, and even have the gall to use their 2012-lineup (Sarah Palin the dingbat & others) to steal away the ‘Tea Party’ from its originator: Ron Paul.

    Do Ron & this site a favor: create a live call-in show, so real Americans can chime-in their views. Give us somewhere to congregate (all nights of the week), and you’ll see a real movement happen. Don’t leave it to neo-con imposters to get the news to our populace. (America’s gonna implode, if we don’t get God in on this. After all…he says to humbly pray for redemption, and he’ll heal our land. It’s worth a try, is it not?)

    Oceanside, California

    • anonymous

      Andrew, you’re very ignorant for referring to Jews as a nationality. Judaism is a religion and in case you forgot from your high school history class, whites had help from plenty of others when creating this nation. Have you forgotten about the slave labor that was a driving force in our economy? The framers of the constitution put in “freedom of relgion” for a reason. It doesn’t matter what you believe, and certainly not what color your skin is, in order to be a part of this country; so I really have no idea what you mean by “real American”.

      Andrew it’s easy to reference the founding fathers when you want to bring legitimacy to your argument, but it should not be forgotten that all in all, things are a lot better today than they were in the 1700s. Slavery has ended, females have equal rights, civil rights amendments have been passed, all religions are tolerated, and we owe all of these great changes to progressives, including JEWISH ones.

  • That was a great interview that you and your son did. We need people like you and Rand to follow the constitution and our Liberties.

  • Thanks for the transcript to a great interview. I respect and admire Ron Paul’s dedication and principles: “I believe that if you have liberty, then you have prosperity. That’s why I’m convinced in my own mind that that is what I’ve been doing for 30 years: campaigning for liberty, and I will continue to do this.”