Ron Paul: Economics 101 Is Not Rocket Science!

by Ron Paul

Last week the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year– the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.

While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.

As Paul Roderick Gregory explained in a recent Forbes column, CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits – no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy. Neither is true, of course.

CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years.

Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government. If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much.

If we simply allowed markets to work free of governmental or Federal Reserve interference, bad debt would be liquidated relatively quickly and malinvestment would be curtailed. Scaled-back regulations would encourage businesses to expand. Lower taxes would jump start investment and spur job creation.

This is not rocket science, it is Economics 101. All it would take is for government to get out of the way. There would be some short term pain, of course, but only by allowing the bubble to burst and bad debt to liquidate can we ever hope to begin building a real economy again.

The CBO report was alarming to most simply because they know neither party will take the steps necessary to avoid eventual fiscal calamity. Instead, despite their rhetoric, both parties want to maintain the fantasy that “deficits don’t matter.” But the CBO report, combined with what is happening in Greece and the European Union, should finally make the undeniable case that economic realities apply even to industrialized first world economies. We must take concrete steps today to avoid having America become the next Greece.


  • AppleRepairNewOrlean

    Ron, I trust you and I’ll vote for whoever you tell me too!

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  • Ron

    Start to listen at 27 minute until the end of the video.Another vision about Ron Paul.I Try to understand like everyone about what going on withDr.Paul.

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  • mastershakelock

    Appreciate it if Ron Paul explained his sons actions further, any way you look at the situation it looks very bad.. I just hope he realizes what an impact this event has had on the freedom movement, we deserve more answers please. Please don’t give me it’s for the good of the movement and your positioning Rand to gain more control in 2016.. if anyone is buying that nonsense they deserve the disappointment coming to them. Fuck Rand Paul for absolutely lying about Romney intentions.

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  • Jack “F*ckhole Pounder” Smith

    Note to Rand “I would have endorsed Obama if he paid more” Paul: You are a disgrace to your father and to his movement. You got that, b!tch???? I hope your father disowns you while he bends a loose wh0re over and reams her dirty snatch. How does Romney’s c0ck taste??????? Go f*ck yourself, ya sellout c*nt.

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  • Geoff

    Dr. Paul. I read Hunters piece on your voting record when it came to supporting neocons in the past. I wonder if perhaps you have not considered analyzing those situations and this one a bit more and see if you can tell the difference. All these people who have put up signs and sent money and showed up for your speeches are not doing those things because they are interested in politics or how the political system works. They don’t go through the delegate process to become delegates. They all do those things because they want to fight. All these people who follow you see the past repeating itself and they want to do something now to stop it. Not in 2016. To think in such a way is no different in principle than to say you want to cut spending over the next ten years. The great problem many of your supporters have with Rands support of Romney is not a matter of politics. They don’t disagree with your strategy. Its a matter of principle. I believe you are a man of principle. But I find myself suddenly questioning your principles and your resolve having waited eagerly for word from you only to find your topic somewhat lacking. We understand, at least basically, the economy. That is why we are here.

    I also believe you are a man of the people. If that is true, if this whole journey from that moment between you a Giuliani to this one has been some sort of charade then well played sir. I completely believed and I deserve the consequences for my lack of wisdom. But if you are the man we all believe that you are then you must fight. No decorum when they steal elections and break our bones. We came to make some noise. The idea that you claim that you wont have enough delegates before the count is done is stunning. There are people all over the movement who are looking for, and finding, rules to use against elections fraud. Today a group called lawyers for Ron Paul filed a suit for election fraud in several states. These people are here to fight. Right now they are fighting for you. You must fight with us. You must go to the rally and the convention to fight. It doesn’t matter if you win, I still believe you likely will considering the information put out by independent researchers and reporters who started doing what they are doing because of you. Matt Larson for example.

    Among the many scenarios of what people think is going on is that you somehow think you can get into the system and change it from the inside. If this is what you are doing then so be it but know this. Even the people who are still defending you in this thread are disgusted in their hearts, I don’t care what they say. While Mr. Hunter seems to think supporting a bank owned candidate in what is likely the most important election this country has ever seen can be compared to who you support for speaker of the house on some random year your supporters do not agree. Mitt Romney will only bring this country more death and chaos and it is likely by the 2016 elections there will be almost nothing left of our republic. So I believe in free will. If you truly believe what you are doing is somehow wise then you must do what you think is right. But you will deeply wound this movement, possibly even break its back, if you do not stand on your principles. That’s all I have to say. This may possibly never even reach your eyes. But this is how we feel as far as I can tell from all the chaotic information suddenly sprouting up all over the place. We are losing our country now. We want to save it now. I hope you will join us but if you do sir, come to fight. Defending freedom is obviously not always decorative or polite.

    200 men sat at valley forge all winter, freezing and starving with no food or blankets. That is what they were willing to give to make men free.

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  • hookah604

    Its time for Ron Paul to run as independent again. To fuck everyone:D

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  • GhungrooAV

    Fuck Yeah Ron Pollution!

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  • streetcrazykenny

    First, Ron Paul has told us endorsements don’t matter (so those in the Liberty Movement SHOULD know the reality behind that endorsement), and that endorsements by big-name politicians does NOT mean you support their politics. Politics 101 is understandably hated, but it is reality – a reality we can’t change until we have more voters in the Liberty Movement.

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  • French Canadian

    Dr Paul… Please come out in a video and tell us that you will NEVER endorse Romney.

    Please… do not destroy yourself and do not decieve us. Pleaaaaassse!

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  • Ron

    Mr.Paul,I think today the majority here are not interested in economic 101 but are interested to understand your reasonning on why you have let your son endorse Mitt Romney a guy with no principles?I think you have done a big mistake and we are millions.A man with principles will never,never,never endorse a man who have no principles.

    With great respect!

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  • QuantumPrepper

    Apparently you didn’t read Ron Paul’s “Offical” website. He defends Rands actions and caves into Politics 101. He did everything that he has been preaching against. He bashed Romney now they are agreeing with his politics.

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  • smoky281


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  • datruth170

    Ron paul sounds a bit sick here..i hope hes well

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  • kronoff317

    eh, you see I think he doesn’t support it at all, and is saying whatever mitt wants to hear so he can get in. Then Rand can try to influence things in the favor of us. If it was just a big time Ron Paul supporter, then I wouldn’t trust him…but I think his son has an agenda that’s backing us up

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  • Mike “Pu$$y Reama” Smith

    Pu$$y reamin ain’t rocket science either, ya c*nt b!tches!!!!!!!!!! I just whip out my 10 inch c0ck and loose b!tches line up fo sho.

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  • tranceemerson

    listen pal, I was simply paraphrasing Thomas Payne. I’m just saying that He’s not going to be able to influence Mitt Romney, so he’d better take the presidency himself.

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  • jah6208

    I created my own economy with One24 !!
    Want to know how? PM me.

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  • jah6208

    I created my own economy with One24 !!
    Want to know how? PM me.

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  • PatMcCarthy420

    If you think that Ron Paul lives through his son then you don’t know anything about the man. Rand acts on his own behalf. He’s said before that he can’t and won’t speak on behalf of his father, so why would he do it now? And if you really know Ron Paul, you would know that he doesn’t like to bad mouth anyone, let alone his own son. He lets your actions speak for themselves. Rand is looking out for his future political career. Ron Paul supported Reagan his first run, then changed his mind.

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  • Kar

    Ron Paul is the wisest US politician. He should be president 2012.

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