Neil Cavuto: Who better to kick things off on a show like this than the guy who is fixing to shake things to the core, not with mild cuts around the edges, but real cuts that cut to the core. To our first, and perhaps most obvious, fix: “Acknowledge the magnitude of our spending problem and see it for what it is: The very core of our economic problem”. A mission not for the faint of heart. And you’d think it’s not a big selling point for a guy running for the president of the United States. But in an age that politicians pander, say this of one Ron Paul; he’s perfectly happy to level. He joins us right now. Congressman, we’re doing things unusually tonight, but I think it’s two years into this so called “recovery”, almost to the day, we’ve got problems. Why don’t people still acknowledge the magnitude of those problems?
Ron Paul: I guess they still believe that government’s going to take care of them, that somehow Congress will pass more appropriation bills and the checks will keep coming and the Fed can bail out everybody. They really believe it because in a way, the deception continues because we are still running up debt, and we’re still printing money, and foreigners are still taking our dollars. So it still works. But the other part of government being way too big and being able to really pay for it, that’s where the problem is. We can’t pay for it because we’re not producers anymore, we can only borrow and we can only print money. And that’s a dead end. But as long as people who are loaners, as long as the printing presses run, we’re going to drive ourselves into a much deeper hole. So this is not a bit of a surprise to me. You know, they talked about the potential for a double dip a couple years ago, and I kept thinking, “Well, maybe they’ll be government statistics that talk about double dips. But there is one big dip that’s being going on”, and I think the big dip has actually started about 10 years ago when the standard of living of the average people going down, good jobs going overseas, and people aren’t getting richer. The people have had their stocks demolished over the past 10 years. So it isn’t improving, but I think the basic problem is they never figured out why we got into this trouble.
Neil Cavuto: They haven’t even figured out that spending hasn’t fixed it. So I guess what I’m asking you, Congressman, and this is a theme I know you’re running for president on. It’s something that you and your son, Rand Paul, the Senator from Kentucky, have been raising: that is the notion of not only cutting spending, but hacking spending substantially so. But even with the severe hacking, both of you have looked at and proposed, it’s relative chump change in the scheme of things. I think in your son’s case, 500 billion off the bat in a 1.5 trillion dollar deficit, it still leaves it north of the trillion dollars. That’s how big our problems are, and yet we don’t even see how big our problems are.
Ron Paul: No, and look how Paul Ryan got hit by making some of these suggestions, too.
Neil Cavuto: Absolutely, absolutely.
Ron Paul: But, you know, I just think that maybe we word it incorrectly, because it’s always “cut this, cut this, and cut this”. Maybe if we said, “What we’d rather have is the people spend the money. Don’t take it out of the economy, let the people spend this money”. I don’t put cutting healthcare on the top of the list. I put on the top of the list some of this foreign stuff, and I say, “Why should that money be spent back here by the people?” And I think they can visualize this a little bit better and literally that is what the case is. We don’t destroy wealth by stopping the spending by government, we produce more wealth because it gets into the hands of the people and better decisions are made.
Neil Cavuto: I’m not blowing you smoke, Congressman, because whether the people agree or disagree with you, no one can deny how ahead of the curve you were on all of this stuff. And I admire anyone who risks a great deal of wrath doing that sort of stuff. So my hats off to you on that. But I do want to raise something that’s just come in. Speaker Boehner has indicated today that he would like to see some sort of an agreement on the debt limit within the next month. Now, technically, we’re supposedly at this brink in early August. How doable do you think that is, that we could score some cord of a debt accord within a month?
Ron Paul: I think it probably will happen within a month or so when they have to, it’s going to be passed because they’re going to intimidate and frighten and use a lot of fear tactics. And eventually they’re going to do it.
Neil Cavuto: But I’m not saying it’s not such a big deal, but we sometimes treat this like the guy behind the curtain in the Wizard of Oz. it’s just a Dobie behind the curtain in the Wizard of Oz, and the fear is way disproportionate to the reality. So are you saying that you would risk a government shut down and even a potential default?
Ron Paul: Well, the way I look at it is if you don’t get this under control, the risk is so much greater if you continue to do this because you will literally destroy the currency and you’ll have runaway inflation.
Neil Cavuto: So in other words, what we’ve being doing is what’s got us in pickle. Stating it off doesn’t address that?
Ron Paul: And we’re going to continue it and they’re going to raise the debt limit and they’re going to continue it. But that, to me, is much more dangerous than saying, “Hey, let’s cut it off. Let’s level here, let’s pay our bills as the money comes in”. And the default is such a fake argument, because governments default all the time. We’re in the process of defaulting now. All you have to do is say, “Is the dollar going down in value?” Yes, prices are going up. So the people are suffering.
Neil Cavuto: I’m sorry to jump on you there, but time is running short. So let’s say we secure a debt deal that raises the debt ceiling to 2.4 trillion or whatever they’re talking about. Without even the spending cuts that Speaker Boehner wants as assurances to offset that. What does the world do? How do the world markets react to that?
Ron Paul: Well, in the short term they probably will say say, “Ah, I guess we didn’t have to worry.” I mean, they’re not all that panicked right now because I think they’re assuming that it’s going to happen. So they’ll take it in stride and they’ll just perpetuate all the problems; the spending and the borrowing and the inflating and the regulating. All the things that got us into trouble, that’s what we doing to try to get us out. And the policy makers refuse to have the correction. You can’t get back to growth unless you get the correction out of the way. And we’re perpetuating all the mistakes; the mal-investment and the debt. We don’t allow this to be liquidated. And after a while you can have recessions and recover for a while, but eventually you have a big bubble bursting which we’ve had, and then it doesn’t work. And eventually, the more they print, the less confidence they’ll have and the interest rates are going to go up. So I think it’s much better to bite the bullet and say, “We’ve lived beyond our means, we ought to live within our means. We ought to have a sound currency and balanced budget”. We need to have a system where we invite capital back into this country. We destroy the incentive to bring capital here. I mean, if you have a company and you have a lot of money overseas, you get taxed to bring it back. You get taxed again. We punish our people who want to get capital back here and build jobs. So there are a lot of things we could do in the market place, and it wouldn’t be more spending.