Event: Joint Economic Committee Hearing
Ron Paul: I thank the Madam Chairman, and welcome Dr. Brummer[?]. I’m not very good at the partisan blame-game, but I am very interested in the business-cycle and why we have unemployment and actually I’m interested in the measurement of our problems. I think sometimes we deceive ourselves because following some free-market websites that measure unemployment somewhat differently than our government, they come up with a figure of 22% of unemployment. And also, even the way the Bureau of Labor Statistics measure it; they look at all the people who are not looking for work at the moment, that is 16%. So things are not very good. Also, the GDP is what we measure. If the GDP is going up, everybody is supposed to feel good. You know, if we spend a billion dollars on a missile and we blow it up, that’s counted as increase in the GDP, and it didn’t give us a house, and it didn’t give us a health care or education. So there is a big difference. And also the inflation rate is very important. If you go back and use the old CPI measurement of inflation, we have 6%, not 2%. So there is a lot of deception, and the people sense this. I think they’d rather here, you know, accurate information than to be bamboozled into believing things are just honkey dorey, when they know there is a lot of inflation out there.
The other thing that I have concerns about is in the measurement of the GDP. If you look at the GDP in a private way, if somebody had a $200,000 job and he lost his job and the family had 2 or 3 hundred thousand dollars of debt, for them to be told what they need is a million dollar loan and spend it, buy a house and buy a car and live high and their personal GDP goes up. But they never measured the debt. But when we go to the government we say the government’s in debt, they’re spending too much. What we need to do is spend, we need to borrow, and the GDP goes up. But if you measure the GDP that goes up because of borrowing, inflating and spending, and look at that with a better perspective, I would say that maybe the real GDP isn’t going up and maybe that’s why we’re not having real growth. There is a big difference between people working hard and paying their bills and actually saving some money. I think the biggest fallacy that we have because we don’t have a correction is we don’t understand how we got here. We had too much debt, too much mal-investment and we haven’t dealt with that. And when you get too much of it, you have to liquidate it. When you get in over your head and you can’t pay the bills, you either have to declare bankruptcy or work harder and take a new job. But we can see this as an individual or company, but evidently our economic theory now is the governments are exempt from those kinds of economic rules.
And I yield back the balance of my time.