I.O.U.S.A - Addison Wiggin [74]
Q: I ’ ve heard other people say infl ation is immoral. Do you feel that way?
Ron Paul : Infl ation is immoral because it ’ s theft. Think about it this way: If you or I had a printing press and we could print the money just like the government does, we would be arrested and put in jail for a long, long time because we ’ ve stolen value — we ’ re pretending these pieces of paper are worth something. The c11.indd 151
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Interviews
founders understood this very clearly and that ’ s why they said in the Constitution that you can ’ t emit mills of credit, which is paper money, because they knew what runaway infl ation is like.
Infl ating is immoral in the sense because it steals value. If you double the money supply and your prices go up twice as much, it ’ s an invisible hidden tax. But the real immorality here is that some people pay higher prices than others. So if you ’ re in a middle class, or especially in low middle income, your prices might be going up 15 percent a year. Somebody on Wall Street might be working leveraged buyouts and making billions of dollars and they don ’ t have to worry about the rising costs of living. This to me is an immoral act that is prohibited by the Constitution, and the outcome is always tragic.
Q: You and former Fed Chairman Alan Greenspan have famously knocked heads over the years. Can you tell me a little about that? Why it is that you seemed to be at times the only person that seemed to be keeping a very close eye on the goings - on at the Federal Reserve?
Ron Paul : Alan Greenspan from ‘ 87 up to over a year ago was the Chairman of the Federal Reserve Board, the U.S. central bank. I see the central bank and the Federal Reserve System as unconstitutional in that they have this tremendous power and a monopoly control over money and credit, which is an ominous power. Greenspan, or any chairman of the Federal Reserve, is more powerful than even our president because he has so much control over the economy. But the interesting thing about Alan Greenspan was that he was a true believer in Austrian economics and in the gold standard. So in a private conversation I had with him I told him that I followed what he taught. In the 1960s he was very clear on his position on gold, that he liked gold and rejected the fi at monetary system, because if you have fi at money it leads to defi cits and to the expansion of government — all of which he opposed.
So it ’ s rather ironic that now that Dr. Greenspan accepts the paper monetary system (which is a fi at system). He literally was the participant in these defi cits, and I would bring this up to him c11.indd 152
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in the committee because the Federal Reserve Board ’ s chairman always condemn defi cits; it ’ s always Congress ’ s fault. But my point was Congress couldn ’ t do it if they weren ’ t complicit: If we don ’ t want a tax and we can ’ t borrow and then they have to print the money in order to accommodate the big spenders. If the Federal Reserve couldn ’ t do that, interest rates would go up and there would be restrain on spending. So he literally became one who once believed in the restraints of the gold standard to one who was converted into becoming the Federal Reserve Board Chairman — the one that ran this whole system of fi at money and central economic control. I would chastise him quite frequently about how can he be for a free market when he endorses a system of central economic planning by controlling the money? And when you think about it, the monetary unit is used in every single transaction, so if you can control one half of every single transaction you have a lot of power, and a lot of control.
Q: There is a story you are asked to tell often, about having Alan Greenspan sign a copy of a book called Gold and Economic
Freedom. What happened there?
Ron Paul : In the 1960s, I was studying and reading Austrian economics and I received the Objectivist newsletter that Ayn Rand