Ron Paul: Debt Ceiling Debate Is a Joke

Date: 06/05/2011

Candy Crowley: Joining me now is Republican presidential candidate, Congressman Ron Paul. Congressman, thank you very much for joining us. Let’s talk about a couple of things that were out there this week: the debt ceiling. The House rejected raising the debt ceiling in what seemed like a pressure move, as opposed to a final move. Will there be a deal to raise the debt ceiling this month?

Ron Paul: Well, I don’t think anybody has an absolute answer to that, but I have my suspicions and I would bet that there will be.

Candy Crowley: And much to your unhappiness?

Ron Paul: Sure. I mean, I came into the Congress a good many years ago, and my goal was to shrink the size of government, balance the budget, pay the bills, have sound money, and live within our means and mind our own business. And I haven’t done a very good job, because it seems like we’re going in the wrong direction.

Candy Crowley: Well, how much of the House rejecting any increase in the debt ceiling until there is a deal to cut something in government spending is real? How much of that is real and how much of it is a game of chicken? Because what we’re told is, the economy will implode if we don’t raise this debt ceiling. So is this now in the gamesmanship stage rather than the serious stage?

Ron Paul: 100% gamesmanship, I’m convinced. They’re not serious, if they thought there was a problem, they would cut spending and get down to business. But no, they’re not serious. It’s who’s going to get the blame and who’s going to get the power and who’s going to get the political benefits and who won’t have to have their budget cut; that’s what it’s all about. But it will come down to the wire and they’ll pass it because they will beat the drums of fear, that’s how we get things done in Washington, whether it’s on foreign policy: “They’re about to attack us, and they’re going to bomb us with nuclear weapons”, and they get Congress to do things.

Candy Crowley: And in the end, what do you think would happen if it didn’t pass? Because you’re right, we’re told that economic recovery would be threatened if the debt ceiling was not raised. Do you believe that?

Ron Paul: It depends on how it’s done. If it was a sign that we were getting our house in order, it might restore a lot of confidence, it might restore confidence in our dollar and our dollar may go up because people might say, “Hey, maybe they’re serious this time”. But if it’s just sort of a mistake and they miss it a week or two and something like that, it could be very negative. But if it was part of a plan to change things, yes, I think it could be a very positive thing. But the big thing is, if we continue to do what we’re doing, and we raise the debt limit … what they don’t want to think about is where we’re going. Because they say it could be bad and there could be some difficult circumstances on delaying payments. But, delaying payments is nothing like not paying with real money, because governments always pay their bills, they never default by not paying bills. They always default by paying off with junk money. And we’re already doing this. We’re worrying about a default? The default is on the average person today, because their inflation rate is higher, they’ve lost their jobs and so we’re defaulting all the time. The default is just who is going to get punished the most, the people who got bailed out on Wall Street, and they and somebody that owns our debt, or will it once again be the middle class and default on them by just printing money?

Candy Crowley: What about the argument, though, that if we should default, it will drive up the interest rates and if you want a car, if you want to buy a house, you would pay double digit interest rates. Doesn’t it in turn affect the people you’re talking about on the ground on Main Street just trying to do their jobs, if you don’t raise that ceiling?

Ron Paul: That’s why it’s so difficult after thirty or forty years of having no restraint on spending and printing money. You don’t click a switch and correct that. So yes, interest rates may go up, but you want the market to work, you don’t want a central economic planning. That’s our problem, because the central economic planners get to fix the interest rates, also monetizes all the debt that the Congress creates. So the people need to realize that if we’re serious about this, interest rates may go up, but maybe we’ll go back to work, too.

Candy Crowley: The Vice President and the group he’s working with, the Republicans and Democrats, says that he’s going to find well above one trillion dollars worth of cuts in his group that’s trying to find a way that’s go at this debt. How well above one trillion dollars in cuts would it take for you to actually vote for an increase in the debt ceiling?

Ron Paul: Oh, I’m not going to vote to increase the debt, I didn’t vote for that and I don’t believe in it. But when is he talking about one trillions, in what period of time? One year or ten years?

Candy Crowley: It’s peanuts, is what you’re trying to say?

Ron Paul: It means nothing. The only thing that counts is this year. And our obligation, when you add up the deficit, the obligation to the barn and the trust funds plus the entitlement obligation, is 5 trillion dollars this year. 1 trillion dollars over 5 years, people and the markets shouldn’t believe this for a minute. That’s just a joke.