I.O.U.S.A - Addison Wiggin [73]
Q: Can you characterize what happened in the last six or seven years here in Washington? What would be the grade that you c11.indd 149
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would give our current administration and current group of leaders in Washington?
Ron Paul : Financially, we ’ re doing a lot worse than we were in 1999 or 2000. The defi cits have exploded and we got involved in a war that has drained us because we ’ re spending so much, and although Republican conservatives were in power, they never held back on passing more entitlements — whether they were education or medical entitlements.
But quite frankly, there was a lot of deception in 1999 and in the 1990s. Yes, the defi cit during that decade was lower; we were never in the black, as they said, because we kept borrowing from our trust funds. So, although it looked a lot better, it really didn ’ t solve the problem because government kept growing. It was almost deceptive in the sense that “ uh - oh we ’ re managing this, maybe the supply siders are right, maybe cutting taxes raises revenues and if we hold back a little bit, everything is gonna be okay. ” But I don ’ t like that approach because even if you could make a tax rate at 10 percent and it increased the revenues to the government because the economy blossomed, I wouldn ’ t be happy with that because I don ’ t want the government to grow. Because eventually it ’ ll get out of control, and when government gets big, individuals get minimized — they have less freedom. So I don ’ t want to make it look easy for the government to spend money.
In those years where it looked like the defi cit wasn ’ t so big, it more or less lulled us to sleep and we said “ Oh yeah, we can do these things. ” But it is true in the ‘ 90s we weren ’ t quite as abusive with the budget because we didn ’ t have a major war going on and the number of entitlements weren ’ t being passed as they have been in this past six or seven years.
Q: Has it been hard to be here in Washington and watch what ’ s happened fi nancially to our country?
Ron Paul : Well I don ’ t know whether hard is the right word, but it is aggravating. I never consider myself frustrated, because I came to Washington with full knowledge of how the system works. I know the system is bad, and I vote a certain way, I try to make the c11.indd 150
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points on what ’ s wrong. Everything that is happening, I ’ ve sort of expected, but it ’ s still pretty annoying to fi nd out that people don ’ t respond to common sense, but hopefully they do before we have a tragic outcome like a fi nancial or a dollar crisis. After that, the conditions are much tougher to come back with reforms, which we need, and we also need a different attitude about the role of government. We need an attitude that ’ s different about what we are supposed to be doing overseas, as well as how we run this welfare state. And if we don ’ t change our attitude then we ’ re going to have an economic crisis, which surely could lead to a political crisis.
Q: Explain to me, what is infl ation and why is that something that should be avoided at all costs?
Ron Paul : Well, infl ation is very simple. When government arbitrarily, out of thin air, prints money — creates money and credit out of thin air. When I talk to many teenagers and grade schoolers, they seem to have no problem comprehending the fact that if you just create a lot of money it ’ ll be like Monopoly money and it won ’ t have value. Governments do that for all kinds of reasons, especially to enhance political power to fi ght wars we shouldn ’ t be fi ghting or to be passing welfare programs that aren ’ t deserved. When you print that money, the value of that dollar has to go down and then one of the consequences of infl ating the money will be higher prices. But there are a lot of other problems, too, with infl ating. It causes a business cycle, it causes fi nancial bubbles, and it causes a lot of economic distortions and unemployment. But, in a nutshell, infl