Ron Paul: Sequester Is Just A Fear Tactic


Melissa Lee: If you want honest talk about what Washington needs to do to get its fiscal house in order, there is no better person to talk to than our next guest, the always outspoken and insightful former Congressman, Ron Paul joins us now on the phone. Dr. Paul, it’s great to have you back on Money in Motion.

Ron Paul: Thank you, it’s nice to be with you.

Melissa Lee: We are market watchers, and this is what the market is telling us: the S&P 500 and the DOW were marching up towards new highs, and the U.S. dollar is also getting stronger. At the end of the day, could this sequester actually be a good thing for the U.S. economy?

Ron Paul: Well, if they really had some cuts in there, it would be a good thing, but there aren’t any cuts, so I wouldn’t give that any credit. But income is going down, it was a bad month in January, and it had to do with the fact that taxes went up. But the President is laying the groundwork for saying that if there’s any problem within the next year, it’s all because of the sequester. But the whole thing is, the sequester isn’t there, it’s just a fear tactic in order to raise taxes, that’s what they’re doing. If there’s a crisis, believe me, the Congress will spend the money. If it’s a financial or a war crisis, they’ll spend the money and there’ll be no hesitation. The Fed spends 85 billion dollars a month, and they’re questioning this whole thing about this nickel and dime. The proposed increase in spending in the next 10 years is 2.5 trillion dollars, and if the sequester goes through, they’re only going to spend 2.4 trillion dollars in additional funds, it means nothing.

The budget is going up automatically at about 7% per year, if the sequester goes through, it will go up at 6.9% per year. I’d like to challenge the people who think this is a big deal by saying, “Okay, you don’t want any cuts? I won’t cut anything, let’s just freeze the budget and give everybody what they had last year”, and see what they say then, because they wouldn’t accept that. But I say just have the budget the way you had it one year ago, and then you can’t complain that you had any cuts.

Andy Busch: Dr. Paul, it’s Andy Busch here, we missed you this week with Bernanke testifying at Capitol Hill, we would have loved to have had your insights then. But isn’t this really a tempest in the teapot? I think, at the end of the month, the big battle is with the continuing resolution. What’s your view on the potential shutdown of the U.S. government over that spending fight?

Ron Paul: I don’t think so, I think they’re afraid of it. A big argument goes on and there’s the pretence that one party wants to cut and the other one doesn’t. But both parties are against having anything in the military budget, so they’re not going to shut down the government, that would be my opinion. And they’re not going to really ever cut anything. As long as this world and the people accept dollars, which they continue to accept, they’re going to keep printing the money, Bernanke is going to keep printing 85 billion dollars a month. And that’s what they’re going to do until the confidence is lost, there are going to be no cuts, there’s not going to be any move towards cutting any budget or balancing the budget, there will be no move in that direction. So I don’t believe for a minute they’re going to close the government down for anytime at all.

Brian Kelly: Dr. Paul, it’s Brian Kelly. I guess what we’re seeing is just this massive disconnect between Wall Street and Washington about what’s the rational path forward. As somebody who was in Washington, is Washington’s definition of ‘rational path’ different than Wall Street’s and Main Street’s? Are we just seeing huge disconnects?

Ron Paul: Oh, there is, and I don’t want to say too much against Wall Street, but I think Main Street has a pretty good feel about this. Wall Street certainly, from my opinion, has a good feel about it on the short run, they know what markets do on the short run, and they know that this is not a calamity. I think at the grassroots, though, Main Street knows that on the long run, this is a disaster. And I think this is why a lot of young people are interested in what I’m saying, because they’re inheriting this mess, and they know what it means on the long run. But the people in Wall Street are pretty good at figuring this out in the short term, and I think they have it correct: this is not a financial disaster. But I think the long term process of spending, huge deficits, not cutting anything, and printing up money, is a disaster, and there are a lot of people who are starting to understand that.

Melissa Lee: Dr. Paul, it’s always great to speak with you, thank you for your time.

Ron Paul: Thanks for having me.


  • these people in washington are incompetent and unwilling to cut, but what people fail to understand is yeah, go ahead and tax the rich more, we will all suffer from that. CUT THE GD SPENDING OBAMA, get some balls and do what is right.

  • Of course not, but we do vote for the House and Senate, which has more of an impact on our lives. They are the ones who are passing the legislation which affect us. The President only can choose to execute those laws or not. My point in asking; why 2016 was because, it shouldn’t matter who we vote into office as President because the current Congress and President will have done the damage long before 2017 when the next President takes office. Why should we wait until then to revolt?

  • lolol – had same reaction and came to post comment…and there you are! So true – these clowns here treat him with near reverance now and I remember specifically this bunch, like all the others, ridiculing Paul.

  • This filthy Koch Brothers shill is not even a Congressman anymore so should STFU!

  • The dollar as a safe haven? It’s only the prettiest pig at the ball and it is being devalued by the Fed. This is a safe haven? Laughable…

  • This is a perfect example of a red herring!!!!!!!!!

  • We have presidential elections every 2 years now?

  • Haha .. why didn’t she bring that up when he was still on

  • Risk aversion ? I think I will stick with Dr Paul young lady .. 🙂

  • I know. I live in Missouri 2 laws were introduced this week to block any new Infringements and 1 for the Audit of the Fed 🙂

  • If all the gun grabbing legislation is enacted and the criminal de facto government demand the people to turn in their weapons, you will see the 2nd American Civil/Revolutionary War. Keep an eye on Missouri and Minnesota.

  • 2014 is the next election year but that is besides the point. Do you think the next election for the criminal de facto government President would really stop a Civil War?

  • Because Washington DC will get an Enema then .

  • It is safe to treat Dr Paul with respect now that the election is over.

  • haha! Yes! “I personally believe….”

  • haha! Yes! “I personally believe….”

  • That chick at the end sounded like Miss South Carolina.

  • Thats the next election year, duh.

  • Why 2016?

  • So Glad to hear an opinion from someone who is Honest and is Loyal to the USA these UN agents are ruining our country. I Hope the Civil war can be prevented till 2016