Ron Paul: Thank you very much, I’m glad you’re out this morning. But I’m just wondering, how many of you will be in Ames tomorrow? Hey, that looks good, maybe we can get a few more of you to come too, as well. But of course, I think most people know why candidates are in Iowa this week and what’s going on tomorrow, but it’s delightful to be here and attend the fair. And also, I’m sort of enjoying the weather as well, having come from Texas here just recently. But it is great to be here, but of course, the real thing that motivates me is the issues that I think have been messed up in our country and that we have to change our way, we have to change our direction. The American people are pretty tired of what they’re getting, they know there are serious problems, there is a lot of anger going on, a lot of frustration, a lot of unemployment, and somebody has to come up with some answers. Well, a few years back in the 1970s I first ran for Congress and I was pretty concerned about what was happening then. I believed the stage was set for the kind of problems that we have today, and it happened back in August of 1971. That was at the time that we decided that money didn’t matter, we can print the money, there should be nothing to back our currency, we’ll just print the money and we can live happily ever after. That means that we believed, as a people, that if we can just counterfeit our own money, we could live and not have to work anymore.
What did we end up with? A huge amount of debt, we owe 3 trillion dollars to foreigners, our good jobs have gone overseas, and now we’re deeply in debt and there’s a debt burden and they’re very, very frustrated in Washington, which makes it very frustrating for the people across the country. A lot of people have become dependent on the government and we’re doing way too much. So my simplest explanation of our solution is we have to drastically shrink the size of our federal government. Most people are starting to realize this, but the big argument is where are we going to shrink it. You know, people say, “You need bipartisanship and you need compromise and sacrifice”. My argument is we’ve had too much bipartisanship, because it’s the bipartisanship that we’ve had that had endorsed all our problems. If we elect Republicans to shrink the size of government, they go and double the size of the Department of Education and get us involved in a bunch wars. So we elect the Democrats who said they will end the wars, and they expand the wars. And then we have Republicans that expand the budget and Democrats who are doing the same thing. So there’s always this compromise where the big spending conservatives and the big spending liberals get together and they don’t have to worry on the short run, they can always delay it. Sure you can tax to a degree, but there’s a limit to how much you can tax. You can borrow to a degree, but if you borrow too much, interest rates go up.
But there is a magic answer to this, it’s called Keynesian economics, it’s called fiat money. They think, “Oh, the miracle pill is that you just print the money when you need it”, and that’s what 1971 was always about; no restraints on the monetary authority. And all our problems in the last 40 years came from the fact that big government was subsidized and taken care of by the printing press of money. But right now the American people have awakened and are starting to realize. It has a lot to do with our monetary system, they know that prices go up when the value of the money goes down, and they’re not very happy about it, because the standard of living goes down. People can make a little more money and the checks can go out, but if the money value goes down, the standard of living goes down. That’s one of the reasons the people are very, very upset. And the people on retirements, people getting Social Security are starting to recognize this. And the tragedy here is that the production in this country is down, the productive jobs have gone overseas because of this monetary system and over regulation and over taxation. So we chase our jobs overseas. In order to get capital back, you have to have a strong currency, you have to have a tax code and a regulatory code that invites our businesses back rather than chasing these businesses overseas. So it’s sort of sad to me to think that in my lifetime we saw a point where there was a country called Communist China evolving to being our banker, there’s something about that, and we should reverse that. But we have to endorse a very basic principle, and that’s called freedom, and the constitution.
But since it was bipartisanship that got together and spent all the money, how do you get out of this mess, how do you get people to agree to cut spending? And that’s where the difficulty is, and there’s no agreement in Washington. So what I have done is I’ve tried to propose a way to try to get the two sides to come together. But I think the area that we could most easily cut is what we spend overseas. We spend way too much overseas, we have an American empire overseas, we spend trillions of dollars, we’re obligated to spend trillions of dollars taking care of the seriously wounded and injured individuals coming back home, which we’re obligated to do. And we pass out all this foreign aid, and it’s all supposed to be for national security. All this militarism doesn’t help us, it doesn’t make us secure. People won’t vote against it because if you vote against a military budget, not realizing that all you’re doing is giving subsidies to the military-industrial complex, they claim and they accuse you of being un-American and not caring about the military. I’ll tell you what, that’s the way I’ve been voting and I’m very proud of one thing; during this campaign and the last campaign, our campaign always raised the most money from the military people more than all the other candidates put together.
And having served in the military – I was drafted in 1962, I was in the air force for 5 years -so I understand a little bit what it’s like to have a bad war going on and people being sent around the world and ending up with no-win wars. So I’ve been very conscious of that. But we should be able to defend a non-interventionist foreign policy just on principle, moral principle that you don’t start wars, you don’t initiate wars, you don’t fight unless is constitutionally declared. So it’s a very simple answer as far as I’m concerned about how to start off by saving a lot of money, and that is be non-interventionists, stay out of the business of these other countries, mind our own business, and bring all our troops home. That means that the Middle East, Japan, Germany, South Korea, the whole works. If you do that one thing instantaneously, and the president does have the authority to move the troops around, that means bring the troops home. If they’re going to get paid all this money, let them spend the money here rather than in Japan and Germany. So that just psychologically would give a tremendous boost to our economy. But you have to change a lot more than that, you have to change the nature of what the people want. The appetite for big government has been around for a long time. There’s a lot of blame to go around, you can blame our presidents, you can blame our Congresses, you can blame bad philosophy; the philosophy of economic intervention. But you can also have to look to the people, how many people ask their congressmen, “I want you to vote for this, I want you to vote for this, yes I believe we should be over there, you should fight this war and do all these things”. Congressmen have, over the years, voted for these things and have got re-elected. So government, very frequently, and most likely, will reflect the attitude of the people. That’s why I’m interested in changing the attitude and understanding of what government should be. The role of government, that is the question that we must ask; what should the role of government be? Should it be to police the world and finance a welfare entitlement system? Or should it be, as the founders wanted and our constitution dictates, that is the purpose of the constitution is to protect your personal liberty. And if you understand where liberty comes from, and it comes to us in a natural way, you should have a right to your life, right to your liberty, and you ought to have the right to keep your own money; and that would solve a lot of our problems. But the other goal in my effort to spread the message of liberty is that to have an understanding of liberty, we have to get this splitting up of what freedom is all about into two bunches. One bunch says, “Well, liberty means that you can run your life as you please”, which sounds like a good idea to me. And the other one says, “No, we want to run your life, but we want to allow you to spend your money as you please”. What would be so bad about a country that said, “You have a right to your life and run your life as you please, and allow you to spend your money as you please, as well”.
But the correction has to come not only with the change of our foreign policy, we have to deal with the monetary system, because it is coming to an end. The financial markets are in shambles, and they’ve been that way for several years and it’s going to get much worse, because we’re trying to correct 40 years of mistakes, 40 years of debt accumulation and mal-investment. And the one thing that is a little more difficult to understand, but it’s a very important economic issue: if you have a pile of debt, in order to get growth again, if you’re spending all your money on paying the interest, it won’t work. You don’t bail out bad debt, that’s why the bailouts were so bad, and it was a tragedy that the people who made all the money got bailed out, they got your money and you got the bad economy.
If an individual is bankrupt and has too many credit cards and too many cars, and they lose their job or downsize their job or their income, they know they have to cut back, get rid of the credit cards, sell a couple of cars. And once they get out of the debt, they can have economic growth again. And a country has to do the same thing. But politically, it’s virtually impossible for the politicians to do that, because there’s always one group saying, “Do it, because I want to keep what I earn”, but then there’s another group that says, “No, you’re going to cut my check”, and they get very angry. And that’s what’s happening in the world, this is a worldwide phenomenon, it is not just in the United States, and it’s because we did issue this funny-money, this paper money. Paper money never works and never lasts, it’s just for a short period of time. The real money of the world, for thousands of years, has always been something of real value, like gold and silver. But this is a worldwide phenomenon, we had the privilege of printing it, sending it overseas, buying goods and services, living beyond our means, accumulating debt, owing 3 trillion dollars of debt now. And what did the foreigners do with the money, they loaned it back to us, they used treasury bills as their reserves; that became their gold standard, owing our debt. So it’s a worldwide phenomenon, and it won’t last. That’s what causes the shambles in the markets today, and by next year, by next summer, you’re going to have a lot more price inflation, because all they have been doing in Washington is spending and inflating. We got into this trouble because we were spending too much, regulating too much, taxing too much, and then printing too much money. So they recognized this and they said, “Hey, we’re in deep trouble, and we have to do something about it”. So they accelerated the spending and the borrowing and the regulations and the printing of money, and then they say, “I wonder why things aren’t getting better”. Well, it would be logical to expect that if you try to treat a problem by doing more of the same; it’s not going to work. But understanding how the business cycle works and what you have to do and the liquidation of debt and the sound money. But all this can be summarized by defending liberty, and that is what America was all about: liberty and freedom of choice. We had the largest middle class and the wealthiest country in the world, and we’re losing it. The middle class has been shrinking now significantly for 10 years, we are losing our jobs in this country, but this can all be reversed and it’s not difficult. Understand and respect where our liberties come from in a natural God-given way. Defend that and have confidence that it does work, and also what fits in so perfectly with this is all you have to achieve this, is ask anybody you vote for, how serious are they and how consistent were they in defending the constitution. If we go back to the constitution, we’re going to solve just about all of our political and economic problems.
Thank you very much.