There are very few political figures for whom I have any respect. One exception is Congressman Ron Paul (R-TX). Ron has been a personal friend of mine for many years. I can assure you that he’s a “stand up guy,” who has voted “no” more times in Congress not just more than any other member, but more than the rest of that august body combined. He’s often called “Dr. No.”
The fact that he has managed to get reelected numerous times — in Texas, of all places — in spite of his outspoken stands against the so-called “War on Drugs,” the “War on Terror” and other popular stupidities is one of the few things that make me think all is not absolutely lost in America.
How does he do it? Ron’s an almost archetypical country doctor; he simply radiates honesty and sound principles. He’s about the last person you’d expect to see in Congress. The voters may not agree with everything Ron believes in, but they know they can trust him to do what he says he’ll do: always vote for lower taxes, less regulation and, in fact, against absolutely anything not specifically authorized in the U.S. Constitution.
His campaign for the U.S. presidency on the Republican ticket — once laughed at by mainstream apparatchiks from both parties — has generated a huge groundswell of national support. Recently, his campaign broke the record for the most funds raised online in a single day. That, in itself, raised a lot of eyebrows — and the money has since been put into high-profile ad campaigns libertarian-minded candidates could previously only dream of.
Ron is famous for his principled rejection of fiat currency, and advocacy of hard money — the gold standard. That’s a matter of particular interest to us, with obvious investment implications. We thought, therefore, we’d get an update from Ron, to see if his thinking has changed any.
The following interview is from the December 2007 edition of the International Speculator, our flagship publication dedicated to uncovering highly prospective opportunities in pretty much any market sector, but these days mostly in junior precious metals exploration stocks — a sector that has treated subscribers very, very well in recent years.
And they should only continue to do well unless Boobus americanus stands up on his hind legs and demands some radical changes, at which point we’d happily sell the gold we own as a hedge against the fiscal calamity that is now all but inevitable. Importantly, Ron Paul’s campaign isn’t about the relatively trivial issue of who should govern, Tweedledee or Tweedledum. It’s about what the nature of the government should be — and how much and how fast we can cut it down.
DC: Why would the typical American, who gets far more from government than he or she pays, even consider voting for Ron Paul?
RP: Even those Americans who receive a higher nominal amount in transfer payments than they pay in income taxes suffer from Big Government. Their standard of living is eroded by inflation, their wages are garnished by income and payroll taxes, their civil liberties are under constant assault, and their economic prospects are limited because of the drag the welfare-warfare state places on the economy. Furthermore, unless we reverse course quickly, future generations will suffer a declining standard of living and loss of liberty. Thus, I expect many Americans to vote for me not only out of concern for their own well-being, but out of concern for their children.
DC: What is your outlook for the U.S. dollar, absent any significant change in the current course of things?
RP: Unless we return to a sensible monetary policy and rein in government spending, I expect the value of the dollar to continue to fall.
DC: Do you think we could see currency or capital controls being implemented?
RP: History shows that governments tend to react to economic crises by increasing government control over the free market, so, yes, it is quite possible that the U.S. Government will respond to a future economic downturn with currency and capital controls.
DC: We have seen the other presidential candidates perform all sorts of linguistic gymnastics when asked how they would handle the looming fiscal problems of Social Security and Medicare. While the solutions will obviously not be quick or easy, where would you start?
RP: I would transfer some of the money saved by my cuts in foreign programs and unconstitutional domestic bureaucracies into the entitlements programs to keep the promises to those relying on the system. I would then work to transition to a market system, phasing in an option for younger workers to opt out of Social Security and Medicare taxes in return for agreeing to provide for their own retirement and health care needs without participating in a government entitlement program.
DC: Further on domestic issues, just what do you think the role of the federal government should be?
RP: Ideally, it should be limited to providing protection from foreign threats, securing the borders and ensuring free trade among the states.
DC: By what % would you estimate that federal government spending could be cut without causing any great hardship? Which agencies would you cut first?
RP: I don’t have an exact percentage, but I am confident that if the welfare state were cut, along with a corresponding reduction in taxes, private charities would quickly step up to help the truly needy — and do so in a much more effective and compassionate way than government bureaucracies. I would cut the Iraq war, foreign aid and all foreign commitments immediately. Domestically, I would work to shut down the Departments of Education, Energy, and Commerce. I would also work to eliminate all forms of corporate welfare and business subsidies.
DC: Any idea how much of the total federal debt could be paid off if the government sold all the land, buildings, equipment and other assets it doesn’t need for activities authorized by the Constitution?
RP: I do not have an estimate on that, but it is definitely something I would pursue.
DC: There is much talk about the Chinese deliberately keeping their currency cheap in order to undercut U.S. and European manufacturers. And we are increasingly hearing discussions about layering on more tariffs aimed at the Chinese. We assume you are anti-tariff, so do you do anything at all about “unfair” competition or just let the global marketplace sort things out over time?
RP: The United States does not have the authority to tell China, or any other country, what to do with their currencies. The values of currencies should be set by the market. Instead of worrying about the speck in China’s eye, I would focus on the beam in our eye by reducing the national debt, restoring a market in currency by repealing the legal tender laws and ending the continued debasement of the American currency.
DC: Much of the politicking this campaign season has certain religious overtones. Are you a believer in a strict separation of church and state?
RP: Yes. However, I believe state and local communities have the right to adopt policies such as school prayer without interference from the Federal Judiciary or any other branch of the federal government.
Doug Casey (send him mail) is the author of the best-selling Crisis Investing and The International Man and editor and publisher of the International Speculator. This first appeared on Bill Bonner’s Daily Reckoning.