The Libertarian Statesman

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The questions were submitted by readers to Steven Dubner’s Freakonomics Blog at the New York Times and answered by Dr. Paul.

Q: What was your first thought when you found out McCain chose Palin as his running mate?

A: At first, I thought it was a pretty savvy choice from a political perspective. I also knew that she had said some nice things about me in the past. At the same time, I knew that to be on the ticket, she would have to toe the line on foreign policy and the war, so that tempered a lot of my enthusiasm.

Q: Who in Congress would you consider to be your closest peer(s)?

A: There are a lot of members who I work with on a variety of different issues. Walter Jones is a good friend and works with me on foreign policy. Often on spending, if there is a 432-3 vote, the other two congressmen voting with me are Jeff Flake and Paul Broun. A lot of times, I work with Democrats on civil liberties issues.

I guess my point is that people from all over the political spectrum can side with liberty and the Constitution. The goal is to get a majority to vote that way most of the time.

Q: It was mentioned you were in favor of getting rid of the Department of Education. Is this true, and if so, how do you feel this would benefit the country?

A: I do believe in eliminating the Department of Education.

First, the Constitution does not authorize the Department of Education, and the founders never envisioned the federal government dictating those education policies.

Second, it is a huge bureaucracy that squanders our money. We send billions of dollars to Washington and get back less than we sent. The money would be much better off left in states and local communities rather than being squandered in Washington.

Finally, I think that the smallest level of government possible best performs education. Teachers, parents, and local community leaders should be making decisions about exactly how our children should be taught, not Washington bureaucrats. The Department of Education has given us No Child Left Behind, massive unfunded mandates, indoctrination, and in come cases, forced medication of our children with psychotropic drugs. We should get rid of all of that and get those choices back in the hands of the people.

Q: What active steps would you take toward reducing the size of the government?

A: The first thing I would do, which could be done rather quickly, is change our foreign policy. If you add up all of our overseas expenditures, we spend nearly $1 trillion every year. We have bases in 130 countries, 50,000 troops in Germany, and our brave military men and women bogged down in two wars in the Middle East.

By announcing that America will pursue a foreign policy of non-intervention, where we have trade, diplomacy, and travel — but where we don’t police the world and stay out of the internal affairs of other nations — we could cut that $1 trillion in half and still have a strong national defense to keep us safe. All that money we save could be used to address the entitlement system, making sure there will be funding there for people who have become dependent, while allowing young people to get out.

Secondly, I would begin to reassert respect for the Tenth Amendment. The Constitution does not authorize so many things that the federal government currently does. I would look to phase out entire departments and return these functions to the states as the Constitution intended. The Departments of Education and Energy would be on the top of my list.

Finally, I would look to our monetary system. Government can only tax its people so much before they say no. So the government expands the money supply when it has taxed and borrowed all it can. This inflation is a hidden tax that falls squarely on the middle class. Sound, honest money would go a great way towards reining in the big-spending politicians.

Q: Even before the primaries, you said you would not run in the general election. Why specifically did you not run?

A: I was running for the Republican nomination, and I would have run in the general if I had won. I had little interest in running third party due to the inherent biases against such efforts. I also signed legally binding agreements not run third-party in 2008 if I failed to win the G.O.P. primary. That was the cost for ballot access in several states, 11 total I believe. So even I had wanted to, it would not have been possible to run in the general after I lost the primary.

Q: What would your plans for economic stimulation look like during this slumping economy?

A: Let’s start with what I wouldn’t do, which is make the problem worse. We can not solve our problems with what we’ve been doing — borrowing money from overseas and creating money and credit out of thin air. Distorting interest rates and inflating the monetary supply sometimes provides short-term relief, but it will only make the pain worse in the long run.

During the presidential campaign, I released the following four-point plan, and would stick by it while at the same time listening to experts for advice on how to improve it:

The Four-Point Plan

  1. Tax Reform: Reduce the tax burden and eliminate taxes that punish investment and savings, including job-killing corporate taxes.
  2. Spending Reform: Eliminate wasteful spending. Reduce overseas commitments. Freeze all non-defense, non-entitlement spending at current levels.
  3. Monetary Policy Reform: Expand openness at the Federal Reserve and require the Fed to televise its meetings. Return value to our money.
  4. Regulatory Reform: Repeal Sarbanes-Oxley regulations that push companies to seek capital outside of U.S. markets. Stop restricting community banks from fostering local economic growth.

Q: Do you still believe that the financial industry needs no regulation because markets are inherently stable and always act rationally?

A: The free market is the most stable and fair system. Government intervention and manipulation of interest rates are at the heart of the whole mess we are currently in. Government intervention causes unintended negative consequences. Artificially low interest rates help out special interest and elites, not the common person, all the while creating malinvestment and booms and busts in our economy.

Q: Do you think people who relate more to the libertarian ideals of the Republican Party have a role to play in the Republican Party of the moment, and do you see a role for them in the coming (hopeful) rebuilding of the Republican Party?

A: I certainly hope so. The Republican Party has traditionally been the party of liberty and limited government. Republicans like Robert Taft, Barry Goldwater, and Ronald Reagan had very libertarian qualities. If the G.O.P. gets back to its roots, they can appeal once again to liberty-minded Americans.

Q: Do you think the efforts of the libertarian-minded are better spent forming a third party or joining the actual Libertarian Party?

A: I never try to tell people exactly what to do, so that’s up to them. However, I think the fact that I have remained in the Republican Party shows where I stand.

Q: What do you think are the most important steps to seeing greater access for third-party candidates? Is the root of the bipartisan problem more national or local in scope?

A: Bipartisan dominance exists at all levels, but it’s even more pronounced at the national level.

The biggest obstacle, I think, is inclusion in the national debates. To take part, you basically have to be a Democrat or a Republican. Unless that changes, a national third-party presidential candidate has little chance.

Q: What role should the United States play on the world scene?

A: I believe we should treat everyone the same. We should be friends with all willing parties, talk and trade with everyone we can, have diplomacy, and travel. At the same time, we should not subsidize foreign governments with money or weapons; this comes back to hurt us more times than not. We should not have separate and different policies for Europeans or Latin America, Israelis or Palestinians. We should set a good example here at home and stay out of the internal affairs of other countries.

Q: Did Bob Barr‘s failure to appear at your press conference endorsing the third-party vote cause a rift between you and him? Are you still friends with him?

A: That’s old news as far I’m concerned. I’m more interested in focusing on positive things Americans can accomplish moving forward.

Q: Do you believe that it is possible to make positive incremental changes to our monetary policy, entitlements, taxes, etc. within the system, or is it just a matter of waiting for failure and then coming in with a solution?

A: Yes, I do believe we can make successful changes. And I want to start making those changes now so that we can avoid a devastating collapse. But we need to start quickly before it’s too late. If we can cut spending and balance budgets, beginning with our overseas expenditures, we can do a lot to fix this mess. We also need monetary reform. I would begin with the incremental step of repealing legal-tender laws and legalizing the use of gold and silver to act as a currency alongside the dollar. That would help stabilize the dollar and strengthen our monetary system.

Q: How has the recent economic turmoil affected your views regarding deregulation?

A: It has reinforced my belief that massive central planning does not work, whether it be in for the economy, education, or energy policy.

Q: How do you propose we restore people’s faith in free-market ideas?

A: Well, we need to start by making sure politicians who talk about free markets practice what they preach. One of the reasons why people may have lost faith in freedom is that leaders used limited-government rhetoric while expanding the size and scope of government. Free markets got a black eye even though the actual policy was intervention and central planning. So again, leaders who profess to support markets need to act like that once in power. If we do that, we’ll prove that freedom really does work.

Q: How much money was left over from your campaign donations and what will be the next step with those funds?

A: We had about $4 million left, which we are using to launch the Campaign for Liberty. You can learn more about that group here.

Q: What is the first thing the country should do about its monetary policy?

A: We should immediately audit the Federal Reserve. I am the ranking member of the Monetary Policy subcommittee in the U.S. Congress, yet I can get more information about the internal workings of the C.I.A. than I can about our central bank. This secrecy is fundamentally wrong, and I believe that people from all over the ideological political spectrum can agree on that.

Bloomberg News this month has gone to court compel the Fed to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for trillions of dollars of loans to banks. Expanding transparency is critical and could be done very quickly.

Q: What are your expectations for the next four years under an Obama administration? How might President Obama’s interventionist economic policies impact our lives?

A: Unfortunately, I don’t expect many good things. I do expect a lot of spending and even more debt. To really cut spending and balance our budget, we need to change foreign policy. Obama’s rhetoric on foreign policy is better than what we have gotten recently, but don’t expect any real change.

He may be more likely to wind things down in Iraq, but he’s still planning on keeping troops there for a least 16 more months. He wants money for Georgia and more troops in Afghanistan. He isn’t going to bring home our 30,000 troops from Korea or our 50,000 soldiers in Germany, and he won’t close any of our 700 foreign bases. At the same time, he is planning even bigger spending here at home. I hope I’m wrong, but if this spending and debt continue, the dollar is going to crash and we will see the middle class in this country take a grave hit.

Q: Do you deny global warming? Is Obama right to invest money in green technology? If you don’t deny it, and don’t think Obama is right, what is your solution?

A: I try to look at global warming the same way I look at all other serious issues: as objectively and open-minded as possible. There is clear evidence that the temperatures in some parts of the globe are rising, but temperatures are cooling in other parts. The average surface temperature had risen for several decades, but it fell back substantially in the past few years.

Clearly there is something afoot. The question is: Is the upward fluctuation in temperature man-made or part of a natural phenomenon. Geological records indicate that in the 12th century, Earth experienced a warming period during which Greenland was literally green and served as rich farmland for Nordic peoples. There was then a mini ice age, the polar ice caps grew, and the once-thriving population of Greenland was virtually wiped out.

It is clear that the earth experiences natural cycles in temperature. However, science shows that human activity probably does play a role in stimulating the current fluctuations.

The question is: how much? Rather than taking a u201Csky is fallingu201D approach, I think there are common-sense steps we can take to cut emissions and preserve our environment. I am, after all, a conservative and seek to conserve not just American traditions and our Constitution, but our natural resources as well.

We should start by ending subsidies for oil companies. And we should never, ever go to war to protect our perceived oil interests. If oil were allowed to rise to its natural price, there would be tremendous market incentives to find alternate sources of energy. At the same time, I can’t support government u201Cinvestmentu201D in alternative sources either, for this is not investment at all.

Government cannot invest, it can only redistribute resources. Just look at the mess government created with ethanol. Congress decided that we needed more biofuels, and the best choice was ethanol from corn. So we subsidized corn farmers at the expense of others, and investment in other types of renewables was crowded out.

Now it turns out that corn ethanol is inefficient, and it actually takes more energy to produce the fuel than you get when you burn it. The most efficient ethanol may come from hemp, but hemp production is illegal and there has been little progress on hemp ethanol. And on top of that, corn is now going into our gas tanks instead of onto our tables or feeding our livestock or dairy cows; so food prices have been driven up. This is what happens when we allow government to make choices instead of the market; I hope we avoid those mistakes moving forward.

Q: Will you run for a leadership position in the House Republican caucus?

A: I have no plans to do so. I don’t cut deals and trade votes, which is exactly what a role like that requires.

Q: What are your thoughts on abolishing America’s income tax and switching over to a consumption tax such as the fair tax?

A: I want to abolish the income tax, but I don’t want to replace it with anything. About 45 percent of all federal revenue comes from the personal income tax. That means that about 55 percent — over half of all revenue — comes from other sources, like excise taxes, fees, and corporate taxes.

We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990’s. We don’t need to u201Creplaceu201D the income tax at all. I see a consumption tax as being a little better than the personal income tax, and I would vote for the Fair-Tax if it came up in the House of Representatives, but it is not my goal. We can do better.

Q: Did former Federal Reserve Chairman Greenspan really believe in free markets or did he fail to practice what he preached?

A: In my book The Revolution: A Manifesto I talk about an encounter I had with Greenspan when he was still Fed chairman. I had come across an old Objectivist newsletter Greenspan had written in the 1960’s supporting a real gold standard. It was great stuff!

At a gathering we both attended, I presented the booklet and asked if he still believed in its subject. He said he remembered the piece and still believed every word. I can’t profess to know what is in Mr. Greenspan’s heart, but his own words lead me to believe that he knew better than to pursue the policies he did.

Q: What policies should have been put into place in 1932 to stimulate the economy instead of the confiscation of monetary gold?

A: A trust in free markets and sound money would have made the 1930’s much less rough. Inflation caused the Depression, and the big government policies of Roosevelt exacerbated the problem. Murray Rothbard wrote a masterpiece on the cause of the 1929 crash and the Great Depression, and I highly recommend it to anyone with a deep interest who wants to read the authoritative view.

Q: Is there any part of the Republican Party reaching out to you? At what point do we dump the G.O.P. and leave it for dead?

A: The leadership in the House of Representatives and at the N.R.C.C. has been cordial, and I as a ranking subcommittee member am myself in leadership. Other national leadership bodies largely ignore me.

Where I get the most attention, though, is from rank-and-file members. Dozens of Republican congressmen from across the country asked me for money and support in November’s election. I was happy to support and contribute to several deserving individuals through my Liberty PAC.

As far as quitting or staying with the Republicans, everyone will have to make up his or her own mind. There can be value in choosing either path. I myself have no plans to leave the G.O.P.

Q: Why is it that, even in the midst of unimaginable deficits and an economic crisis, both our enormous military and our policy of drug prohibition remain sacrosanct? Do you think this reflects actual democratic opinion, or is it the work of powerful, but numerically small interest groups?

A: I think that it might reflect democratic opinion, but only because each issue has been demagogued.

Take military spending. I believe in a strong national defense. I want our troops here, defending our territory; I want nuclear submarines and an adequate arsenal of weapons that can repel any conceivable attack. What I don’t want to do is spend a trillion dollars a year maintaining an empire.

Today, our troops are in 130 countries. We have 700 foreign bases. We can spend far less and have a stronger national defense than we do right now. But if you question our foreign policy, you are branded as un-American. And we’re told that if we don’t u201Cfight them over there, we’ll fight them over here.u201D That’s absurd.

On your second example, the federal war on drugs has proven costly and ineffective, while creating terrible violent crime. But if you question policy, you are accused of being pro-drug. That is preposterous. As a physician, father, and grandfather, I abhor drugs. I just know that there is a better way — through local laws, communities, churches, and families — to combat the very serious problem of drug abuse than a massive federal-government bureaucracy.

There are certainly some powerful special interests that benefit from our flawed foreign and drug policies. Now, do I think they openly conspire together to deceive and manipulate? No I don’t. The system is much to complicated to think a few puppet masters control the strings. But I do think we’d be a lot better off if we listened to our founding fathers and obeyed the Constitution. The founders would never have formed a D.E.A., and they would be horrified if they saw our troops spread thin around the globe.

Q: What do you think were your biggest mistakes in the primary race, and what would you now do differently?

A: I was always pessimistic and never thought we would get to where we did. My regret is that we couldn’t see how quickly things would grow and were not adequately prepared for the explosion in money and support when they came. There are dozens, hundreds of things we could have done better, but we all worked hard and did our best. And I know we built something that will only get stronger in the years to come.

See the Ron Paul File

Dr. Ron Paul is a Republican member of Congress from Texas.

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