Ron Paul to Congress: If Debt Is the Problem, Why Do You Want More of It?




Transcript

Ron Paul: Mr. Speaker, the Congress is concerned about the debt, the people are concerned about the debt, the markets are concerned about the debt, the world is concerned about the debt and what we’re doing here today, because we live with a world fiat dollar standard and so the whole world is engulfed in this very serious problem.

I do not understand, though, that if the debt is the problem – and I agree, the debt is the problem – that for us to come here and raise the debt by 2.4 trillion dollars is the solution. That just baffles me. I think it’s a distraction, because when a country gets indebted to the degree that we’re indebted, the country always defaults. This is historic, especially if the country is a significant country. On occasion, a small country will quit sending the checks and they’ll go bankrupt; we’re not going to do that, but we will default because the debt is unsustainable.

This year it is said that we have a debt increase of 1.6 trillion dollars, but that’s not true. If you count what we borrow from the pension funds, the Social Security and highway funds, it’s 2 trillion dollars. But if you include the increase in the entitlement obligation, it’s 5 trillion dollars. So this is a huge, huge problem.

But the argument here is, how do you default. And it is said that if we don’t raise the debt limit, we’re going to default and not send out the checks. I don’t believe that for a minute, somehow or another the checks are going to go out.

But if you really wanted to live within the technicalities of law, there’s a very simple thing you could do. We owe the Federal Reserve 1.6 trillion dollars. Well, that’s not a real debt – they bought those treasury bills with money out of thin air. We could just write that off or quit paying the interest, tide ourselves over and get down to serious business to cut back and live within our means. And that would be a solution. But to increase the national debt will only encourage another type of default, and that’s what we’re going through. We’re engaged in the most difficult and a very bad way of defaulting; and that is through the destruction of the currency. Today we have an inflation rate of 9%, and that is defaulting. So if a government can default and print money, and if they can get a 50% inflation rate over a period of time, they’ve cut that debt in half. That is the goal, that is what’s happening, and that is very, very serious.

Just in these last 3 years in dealing with this crisis, the dollar has been devalued 50% against gold, and gold, of course, is the best measurement of the value of a currency and it’s been that way for thousands of years and it cannot be denied because it’s economic law. So we are defaulting, and when the American people go out and start buying goods and services, like they are now, they’re recognizing it costs a lot of money. So right now, we’re in the early stages of rampant inflation, which means we’re going to be hit with higher prices and higher interest rates. That is going to be a tax. So I see the only solution, and that is to cut spending.

Now the reason we don’t cut spending is one side loves entitlements, and the other side loves war. And even this token attempt of a 100 billion dollars of cuts when we have this huge, huge deficit… But there’s no mention of cutting military spending. I don’t want to cut defense spending. This military spending doesn’t defend us, it makes things worse.

Our problem in this country doesn’t come only from the Congress, it comes from the people! The people still have a strong appetite for big government programs. They’re not willing to cut, they think government can take care of us from cradle to grave, and that we can be the policeman of the world. So someday, we as a country, we as a people, and we as a Congress, will have to say, “What should the role of government be?” The founders had a pretty strong suggestion, they wrote a constitution that said the government should be very limited, and the government should be protecting our liberties and providing national defense and a sound currency. We don’t do any of that. We’ve embarked on a course that was destined to end badly and this is where we are today.

So if we don’t understand this, this default will not be because we don’t send out the checks – we will send out the checks – it will be defaulted on because people will get their money back, or they will get their Social Security checks, and it won’t buy anything.

That is much, much worse than facing the fact that we not raise the debt limit and work our way out of this. That is devastating economically, and it’s devastating politically, because if we just saw a taste of what happens, how the anger is built when you see other countries in Europe now defaulting and can’t pay their bills. So this is more significant than ever, because we provide the reserve currency of the world.



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1,026 Comments:

  1. So true — WRITE OFF THE FED RESERVE!

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  2. The only intelligent speaker in Congress.

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  3. Big government = big troubles.

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  4. CaptainWeirdBeard69

    Really, really well said. For the love of all that is right in this world… President Ron Paul.

    »crosslinked«

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  5. This guy should run for President!!! I can’t wait for the day where I can listen to his speech without getting interrupted by a news anchor, a debate “ding-ding!”, or a “The gentleman’s time has expired.”
    Ron Paul 2012!!

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  6. We don’t change the tax rate because it would threaten congressional jobs to not have those perks they can hand out.

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  7. If I didn’t see it was Ron Paul talking I’d swear that God himself had come down to scold us. This man wouldn’t tell a lie to save his own life! Americas last hope!

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  8. Goldman Sachs CEO, Lyold Blankfein is Jew

    IMF Deputy CEO, John Lisky is Jew

    Ex IMF CEO, Dominic Strauss is Jew

    World Bank CEO, Robert Zoellick is Jew

    Ex World Bank CEO, James Woolfesen is Jew

    Fed Chairman, Ben Bernanke is Jew

    Ex Fed Chairman, Alan Greenspan is Jew

    Obama Treasury Secretary, Timothy Geithner is Jew

    George Bush Treasury Secretary, Hank Paulson is Jew

    Note : This is true. Whoever removes it, may the curse of God be upon him/her. If I lie, the curse is on me..

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  9. the budget for the department of OFFENSE is $1.5 trillion, an outrage.

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  10. Thank you Ron Paul. Marco Rubio and Ron Paul are the two most trusted politicians in my book. They both love our America and want the best for the people in all sincerity form their hearts.

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  11. Tell the FED to piss off…Boom…you save like 2 tril.

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  12. Ron Paul for President, w/ a capital P!

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  13. why does no one listen?

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  14. I agree totally with Ron Paul . The entitlement programs are riddled with fraud and are indeed a huge burden on taxpayers. Still, I would say that those programs are a drop in the bucket compared to the trillion dollar decades long wars we are in.Bring our troops home , secure our own borders , get the military presence out of the 130 countries we are in and that alone would put a huge dent in the fiscal crisis .

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  15. To whomever said, “The gentleman’s time has expired” on the video:

    Shut up, listen to the good doctor, learn something, and say “thank you”.

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  16. We defaulted a long time ago. When you repay a debt with devalued currency, that’s a default.

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  17. Are there any potential repercussions to writing off the 1.6 trillion dollar debt to the Federal Reserve referenced at 1:48 ?

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  18. peterscottfrost

    The Daily Caller is reporting the Michelle Bachmann suffers from frequent, debilitating attacks brought on by stress and uses a lot of pain medication to deal with it. (See the blog post on Lew Rockwell’s web site.) If there is anything to this story at all, her campaign is toast. That would open the way for Ron Paul to win Iowa much more easily. Romney has already conceded it.

    Donate to the money bomb today!

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  19. Ron Paul once again on the right side of issues. And he believes that 9/11 was not an inside job, but was a result of blowback and our interventionist foreign policy.

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  20. Brilliant. Now if only the rest of congress would listen.Sadly, I believe the destruction of America is the goal.He nailed it perfectly, half want war, the other half want entitlements. Both will lead to destruction.

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