Dr. Ron Paul has long been a leading voice for limited constitutional government, low taxes, free markets, sound money, civil liberty, and non-interventionist foreign policies.
Dr. Paul served as the US Representative for Texas’s 27th Congressional District from 1976 to 1985. He then represented the 14th district from 1977 to 2013. He ran for the office of US President, three times, most recently in the 2012 Republican primaries. Dr. Paul also had a long career as an OBGYN over which he delivered more than 4,000 babies.
The recent author of the book, The Revolution At Ten Years, Dr. Paul looks ahead at the future of the movement he helped launch — tackling central planning, the military empire, cultural Marxism, the surveillance state, the deep state, and the real threats from these institutions to our civil liberties.
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
As a multi-term member of Congress, Dr. Paul knows the players and policies responsible for the growing unfairness and inequality now rampant in society. He does not expect the offenders will reform willingly. Instead, he predicts the system will collapse under its own unsustainability -- offering a rare and valuable chance then for more sound and fair solutions to prevail:
Wealth doesn’t come from the creation of money, especially a fiat system. With too much fiat money and all this credit, eventually the economy becomes exhausted and engulfed with debt and mal-investments. The treatment for this is a correction; you have to allow the debt to be liquidated. You have to get rid of the mal-investment and you have and to allow real economic growth to start all over again. But that wasn’t permitted in ’08 and ’09, which is why there’s been stagnation. It's hard to believe that today we have negative interest rates -- real rates are negative and people still aren’t grabbing them up! A shortage of money isn't the problem here; rather, it’s a shortage of understanding market conditions.
We’re over-taxed and over-regulated. This is resulting in a destructive system that has divided the country into two groups: those who haven’t recovered from the Great Financial Crisis versus those who are getting very rich because they're on the receiving end of the new money created by the Federal Reserve. The people who get to create the credit get to distribute the credit, which always results in a situation where money becomes unfairly distributed, as its allocation is no longer dependent on productivity.
We haven’t changed anything. We still have a system where we encourage people to borrow money, that debt doesn’t matter, and we’re not going to cut taxes, and we’re not even going to admit that we spend too much money. Nobody can cut anything -- that’s why Washington is at a stalemate. A lot of people don’t like Obamacare, but there’s enough people who do like it. Once it has been implemented, it’s very hard to get rid of a program. I also don't think that the proposed tax reforms will actually lower taxes. They never do. Our politicians won’t admit where the real problem lies: overspending, monetizing the debt, taking over the whole world through the monetary system, financing wars, financing welfare and the military industrial complex. It’s going to continue until this whole thing comes apart.
The eventual event will be driven by the marketplace. When it comes undone, they will no longer be able to prop things up just by printing more money. If we have a sharp downturn and they decide, "Well, QE didn’t work because it wasn’t enough." and they double QE, there’ll be a point of no return and all confidence will be lost. We’ll dump the dollar. Interest rates will go up instead of down. That will make all the difference in the world because it will be unsustainable and create real challenges for the dollar remaining the reserve currency. When the dollar no longer serves as the world's key currency, that’s when the ballgame will be over.
Click the play button below to listen to Chris' interview with Dr. Ron Paul (29m:56s).
Chris: Welcome, everyone, to this Peak Prosperity podcast. I am your host, Chris Martenson. And look, as my listeners already know, I’m an equal opportunity basher when it comes to the current political parties is Washington DC. And that’s because I go by what people and parties do, not what they say. Now, on that front, on the doing front, there’s so little difference between the parties that they are essentially indistinguishable from each other. Both parties support endless war. Both support monetary policies that destroy the middle classes today and I think all the classes tomorrow. Both are taking corporate bribes that have given us such monstrosities as a raging opioid epidemic and toxic agricultural products that are ruining ecological landscapes and human health alike. And, of course, politically, the world is fracturing in ways not seen in a very long time. Restive populations are voting for parties and independence like never before. Political disagreements are hardening like quick-set epoxy left in the sun and failing to be resolved in any useful fashion.
Well, today’s guest is someone I greatly admire, and who demonstrated that one can have both a conscious and a political career. And I’m very much looking forward to today’s conversation. It is my great honor to welcome Dr. Ron Paul as our guest. You know him as the US Representative for Texas’s 22nd Congressional District from 1976 to 1985 with a two-year gap in there. And he then represented the 14th district from 1977 to 2013. He ran for the office of US President, three times, most recently in the 2012 Republican primaries. Dr. Paul also had a long career as an OBGYN over which he delivered over 4,000 babies. He is a leading voice for limited constitutional government, low taxes, free markets, sound money, civil liberty, and a non-interventionist foreign policy. Dr. Paul, thank you so much for joining us today.
Dr. Paul: Well, thank you very much. It’s nice to be with you.
Chris: Well, Dr. Paul, I want to talk about the economy, monetary policy, geopolitics, generational issues with you and wow, you’ve got a new book out which touches on all those things, so let’s start there. The title of your new book is The Revolution at Ten Years. This revolution you write of, is it a movement? What is it?
Dr. Paul: Well, it’s something that was more or less started, I consider spontaneously in the campaign, ten years ago when I first ran in ’07 and for the ’08 campaign in the Republican primary. And there was a lot of excitement about a liberty message, which is what I was delivering, and the University campuses were very open to this message. But there was a lot of spontaneity to it, and in the end of ’07 on December 16th, which was a celebration, an anniversary for the Boston Tea Party, the supporters around the country were spontaneously holding rallies and saying, well, let’s send Ron more money. And it was astounding. It broke all kinds of records. I think we raised six-million dollars in one day and it was really self-starting. But that was a celebration on a message I was delivering then which you sort of outlined at the beginning.
And ten years have passed, and I thought this might be a good time to revisit that whole movement that was occurring. And things have changed. People say is there anything left to the revolution? What has happened to it? Nobody talks about it. And that’s what the book is about – to try to describe that, as far as I'm concerned, that revolution that was going there was a continuation of what was existing before that, which was started by the old right libertarians and the Austrian economists, and that it’s alive and well. But it has changed names and controls because of Republicans tried to, and made an effort to, take over, as well as the populists tried to take over. But the message that we were visiting with back there ten years ago is very much alive. And Washington doesn’t speak for us because people look to the media and to the government, and you don’t see or hear much about it.
But my goal in writing the book was to try to give people a little encouragement. I think it’s very much alive, and it’s in the area of ideas that changes the world and not a military power that goes around telling other people how to live. So this is, to me, it was a summation and a refreshing and an encouragement to all those people who are interested in the subject to take a look at where we are today.
Chris: Very well said. I attended one of your campaign rallies a long time ago, and the observation I had back then was - really struck me once I finally noticed what was happening - was that compared to all the other political rallies going on, the people that were showing up for you were markedly younger. The demographic was just a whole different bell curve, and I would say it sort of centered maybe around the age of thirty or something and it tailed off. But probably a twenty-year gap compared to other rallies I went to and I’m wondering is there a generational aspect to this revolution you're talking about? Is that a fair observation I made? And does that still hold?
Dr. Paul: Yeah. I think in the campaign it was definitely dominated by young people, a lot of people even younger than you state because I was amazed that young teenagers would come. And then they’d come to my office afterwards and I was just amazed at their age. And they started reading and studying Rothbard and Mises and understanding the Federal Reserve. Some of them came in – they were 14 and 15 - that had been in the campaign, just to visit. And I said, you have a better understanding of the Federal Reserve than most Congressmen do. But the Congressmen, they don’t pay much attention to it. So it is the young people that really was the main core of the campaign. But I kid when I go to even meetings now. I go to the campuses still. But there’ll be a lot of adults. But it’ll be mostly – fifty, sixty, seventy percent – will be college age kids and young people. I always kid that in this audience everybody is under 30.
And liberty is a young idea; historically - it’s very young. When you look at the history of the world and the universe, it’s just a few seconds of the whole history of the universe. But the history of freedom is only several hundred years old. It comes and goes, it had ups and downs, but there’s always a core left over to preserve the elements, and there’s that remnant that I appeal to and try to encourage. And the magnificent thing is the spreading of ideas. It’s easier now than ever, and it’s the ideas that change things and as we know, armies can’t stop ideas, and ideas do spread even though we get challenged now by government interference and regulation on speech and social media. We still have access. You still have a program, and that is good. And you reach people, so and the message is powerful.
I never took credit for being a sensational speaker, but I think we have a sensational message. I think the message of liberty is very American. They accused me of being unpatriotic and un American because I wouldn’t support the wars, but I tell you what. I think this fits into the tradition of what made America great and some of the beliefs we all had at the beginning of the country.
Chris: Well, I completely agree. And if we just focus this down economically for a second. One way I’ve thought about this in talking with a lot of young people and then boomers – I'm a boomer – is that the older generations, they have everything to lose unless the status quo is maintained. And they’ve paid into a system. They bought into it. The whole idea of get a house, a car, two-point five children, put money into a formerly a pension, now a 401K. But increasingly we can see that model isn’t going to work. the promises can’t be kept. But still, they want the payout. So they're really clinging to this idea that we can maintain the status quo.
And then you talk to young people and they look into twenty trillion in debt, ten times that in unfunded liabilities, depending on how you count. Maybe two hundred trillion total. Totally unpayable, a crumbling infrastructure, no corporate loyalty, no political loyalty because our jobs have just been sent all over the world and all of those sorts of things. So the young people might say they have nothing to gain by preserving the status quo. That feels like a generational storm, like there’s two parties here. Is that a fair way to look at it? And if so, how do we begin bridging that gap?
Dr. Paul: Well, we have to be realistic because we’re not going to make a decision saying we should change the status quo. The status quo is going to be changed because of the bankruptcy and the unaffordability of what they have. But while you were talking about that it reminded me of a story. Pretty early on in my career, because my message is all the same – that we spend too much money on the problem and I’m not even going to vote for large debt for our District which I thought would make sure that I never go back into office, but to my surprise and others, people kept electing me. And I ran into a guy that says, he says, you know Ron, he says, I don’t like what you do. He was in city government. He says, because you won’t vote for anything, and that really annoys me. But he says, I want to tell you something. He says, I agree with everything you say, and the reason I argue the case – he said, what we have to do as individuals and constituents is to get as much as we can before this whole thing comes down. And I think I know what he as alluding to.
People say yeah, this is a great system, status quo is going to give me Social Security. Yeah, if it lasts and how long will it last and right now we’re up against a wall. There’s not enough people paying into it. There’s a lot of inflation coming, and the standard of living will go down., And his argument was get what you get while it’s coming. But, of course, my argument is I know what we have to do – is invest in the protection of liberty, making the argument that if all of us lost every single thing in a material way and we had to start from scratch, but we had our liberties and some money and property rights and contracts, no more wars, protection of civil liberties - I think the country and all the individuals would be back on their feet very, very quickly. Of course, that’s not acceptable now because nobody can cut anything.
That’s why Washington is at a stalemate. A lot of people don’t like Obamacare, but there’s enough people who do like it, and they think they’re going to get free medical care, and if they don’t think it’s working well then, we have one payer system and that sort of thing. So it’s very hard to get rid of a program. And I’m also suggesting that the tax reforms will not lower taxes. They never do because they believe in this revenue neutral - if we cut your taxes we have to raise the taxes on somebody else. And they won’t say where the real problem is – and that is spending and monetizing the debt and taking over the whole world through the monetary system, financing the wars and financing welfare and the military industrial complex and yes, I can preach the gospel and say why we shouldn’t do it. It’s going to continue until this whole thing comes apart. That’s when our efforts, including what you do in trying to spread the message, how successful we are in preparing people to argue the case for return to liberty. And not only just the return to the old days when liberty was respected, but to advance the whole understanding of liberty.
Liberty is better understood now than it was at the time our country was founded. Monetary policy is better understood and markets are better understood and globalism in a very favorable sense. Free trade and free travel and this sort of thing, that’s better understood, too. So I think that we’re going to have a wonderful opportunity because we’re not going to have to crash the system. The system will crash itself just like communism crashed itself. We never – I keep marveling over this – I was in the military in the 60s and the Cold War was on. I was drafted during the Cuban crisis. We never had to fight the Soviets. The Soviets defeated themselves, and that’s what we’re on the verge of doing. This system that we have today is not as ruthless as communism or fascism, but it’s very, very destructive, and so we have a tremendous chance to move the cause of liberty forward rather than just drifting and accepting more totalitarianism.
Chris: Well, I agree and very well said. So I want to turn to one aspect of that. You mentioned a couple of times that when this comes to an end – I’d love to get your views on what you think that end looks like, but for me, my beginning and ending point for economic discussions really starts with monetary policy because we make money out of nothing. And we started on this crazy experiment late 70s, early 80s, which ran like this: we’re going to borrow money at twice the rate on a percentage basis as our economy was growing. So, we’re borrowing at eight percent, economy is growing at four percent, and that’s just a math problem. Nothing personal.
So this was enabled by a very interventionist, increasingly interventionist Federal Reserve. Love to get you thoughts as somebody who sat on the committees. You asked the best questions, by the way. So monetary policy – arguably the nearly ten-year monetary intervention – most recent one – by the world central banks has created just two things: a massive financial bubble and the largest wealth gap on record. What are your thoughts here?
Dr. Paul: And debt – went into debt. It proves one point, and the most important point is wealth doesn’t come from the creation of money, especially a fiat system. And fiat money and all this credit - finally the economy gets exhausted and it’s engulfed with debt. And now investments. And so when you have a downturn like we had, and we really haven’t recovered from it, that the treatment for this is a correction. You have to allow the debt to be liquidated. You have to get rid of the mal-investment and you have and to start all over again for economic growth. But that wasn’t permissible in ’08 and ’09, and that’s why there’s been stagnation, and that’s why, as we move into the next recession, we’re – what are they going to do this next time? Lower interest rates to minus five percent or something? We have negative interest rates. Real rates are negative, and people still aren’t grabbing them up. It isn’t a shortage of money, it’s a shortage of understanding and market conditions.
We’re overtaxed and overregulated and this is giving us this destructive system, which really has divided the country because there are two groups: those who haven’t recovered and many in the middle class versus those who get richer and very rich because they're on the receiving end of this new money created by the Federal Reserve. The people who get to create the credit get to distribute the credit, and it’s always going to be a situation where it’s unfairly distributed, and it won’t be dependent of productivity. So although conditions, according to the government statistic things are doing somewhat better, we haven’t changed anything. We still have a system where we have encouraged people to borrow money, and debt doesn’t matter, and we’re not going to cut taxes, and we’re not even going to admit that we spend too much money. And we don’t even really emphasize the fact that in Washington they should be talking about how are we going to protect personal liberty and let people take care of themselves? That isn’t even discussed. It’s always how are we going to redistribute wealth? Are we going to take care of everybody? Everybody from the business community to the people who want more food stamps. And it’s failing, and we’re going to see, within the next several years – nobody knows when it’s going to come, but it’s going to come - and then we’ll have to have something to put in its place.
Chris: Well, let’s talk about when it comes, what that looks like because 2008 we had roughly maybe fifty-two trillion in debt in the United States. A hundred fifty-seven trillion worldwide, I believe the numbers are closer to sixty-three trillion in debt in the United States now, and we’ve got, I don’t know, a little over two-hundred-twelve trillion worldwide. So what we’ve done – you mentioned it before – the Federal Reserve policies I guess did three things: the wealth gap, the financial bubbles, plus a huge increase in debt. My concern, and I wonder if you share this, is that when the next – not if, when – the next downturn comes that there’s just that much more debt to be destroyed, which is just that much more disruptive, which is going to be that much more painful to go through. Would you agree?
Dr. Paul: Yeah. Absolutely. That is where the real problem is. Now, the Fed actually understands this to a degree. They won’t admit because then they’d have to blame themselves for monetizing the debt and the Congress for spending too much money. Their goal right now is to have price inflation. Why is the CPI going up? When you think about it, the CPI going up is very destructive to that middle class that’s getting poorer. They want to purposely destroy the value of money, which is exactly the opposite. They believe that if you have a prosperous economy price – if you see the prices going up you’ll have a prosperous economy. It doesn’t make any sense. If you have a prosperous society, and we still have that in some goals, prices go down. In electronics they still go down in spite of all this stuff that’s going on.
But their whole goal in monetary policy is they're hoping that they can report the CPI going a little higher. But the truth is prices are going up a lot faster than they will admit, and it’s only a gimmick to distract us from the Federal Reserve. They think that it’s some people that aren’t at a point of getting the prices to go higher that would only happen. But that is hardly the solution. So all they do is they push on a string. They keep pushing. They push all that money out, and the people aren’t doing with the money that they think that they should. They keep buying more debt and monetizing debt, and what we need is a productive society and that won’t come until you have the liquidation of the mal-investment of excessive debt and too much regulation. And confidence restored. Companies now have a hard time finding money. You can borrow it pretty cheaply, but there’s no confidence that if I start a new business and I’m going to manufacture steel once again and be competitive – nobody’s doing that like we did in the Industrial Revolution.
Chris: Now, the Federal Reserve, I blame a lot and use the word blame carefully. I don’t like to cast blame around. But they had some blame coming, and I’m a big critic of Greenspan, Ben Bernanke, now Yellen, and I’m almost becoming infuriated – if I could use that word carefully – because of the learning curve; seems to be so flat for that organization. It seems completely obviously to me that if you take all the savings of the country and you give it zero percent return and then people don’t get the interest return on that you end up with – it seems capably obviously that you would end up with a system that we currently have where you have low spending, low borrowing, low investment, all these things they say that want, but essentially what the Fed did was they didn’t give money to Main Street. They actually took it away. Where did it go? Well, because of how the yield curve is built, they gave that money, took it away from savers and gave it to the big banks.
Would it be unfair of an observer like myself to say the Feds not – they talk a good game about helping the middle class and helping economy, but if you follow their actions not their words, what they’ve really done is taken a bunch of purchasing power from one group and handed it another group. And that other group, by the way, has created lots of inflation in gulfstream jets, trophy properties, high-end art, good jewels, and all of that.
Dr. Paul: That’s exactly what happened because the person that had a house and couldn’t pay the mortgage, which was a problem coming from the system that we had, the mal-investment, low interest rate and the over building. They weren’t bailed out. They generally lost their job and lost their houses so often. But there was some bailing out and exactly the people you're talking about – the very wealthy people and the people who were making all these mortgages – oh, they're too big to fail. So they got the bailouts. And they weren’t just domestic. This was an international event, and because the dollar is the reserve currency it was used to bail out other central banks and other governments and international corporations. And in the sense of pasting it together for a while longer, they did that, but now whether it’s the bond bubble or the dollar bubble, it’s bigger than ever.
The eventual event will be driven by the marketplace, and that means it will come undone, and they won’t be able to stop it just printing more money. It’s actually the opposite. Instead of, like they did, they print money and they prop up. There will be a time when, if we have a sharp downturn and they decide, well, QE didn’t work because it wasn’t enough and they double QE, there’ll be a point of no return and the confidence will be lost. We’ll dump the dollar. Interest rates will go up instead of down, and that will make all the difference in the world because it will be unsustainable, and then there will be the real challenge to the dollar being at reserve currency is when the dollar no longer serves as the international money, as the key currency. That’s when the ballgame is over.
Chris: Absolutely. So I want to talk to you about politics now. Recently you wrote on your national blog on the Campaign for Liberty website you said, “President Trump has been notoriously inconsistent in his foreign policy. He campaigned on it and won the presidency with promises to repair relations with Russia, pull out of no win wars like Afghanistan, and end the failed US policy of nation building overseas. Once in office he pursued policies exactly the opposite of what he campaigned on. Unfortunately, Iran is one of the few areas where the president has been very consistent, and consistently wrong.” First, why did Trump do such a turnabout from his campaign rhetoric and then your thoughts on Iran?
Dr. Paul: Well, it’s hard to say because you’d have to read his mind. Did he really believe it before? Was he just talking off the cuff? Did he not understand? Or the other thing is, is did he, once he became president did he realize or all of a sudden be confronted by the deep state? The people who really pull the strings and have a lot to say about the monetary system and the government system? The average politician, the average Congressman, has very little say about what’s going on, and you mentioned at the beginning that there’s a lot of bipartisanship and that is the real case. So when you have – I remember so clearly when I was there Boehner and Pelosi were pretty good friends, and the Congress lumbered along and they never passed their budgets just as they're doing now. Then at the end there’s an emergency and the leaders put together and spend the money and then there’s no time to even study it. That’s where the real problem is. But why Trump did it – it was so disappointing.
But the one thing is, is he – from my viewpoint – there’s no way to know – he lacks a consistent policy. How can he be so wrong on Iran and early on he was so right on Russia? Then all of the sudden he flips. But in my programming, you know Daniel McAdam’s and I, we keep having to say, well, it looks like the neocons won again. Exactly why, somebody else will have to figure it out because I won’t want to try to prove to you he was a secret neocon all along. I think he probably did believe a lot of what he was saying in the campaign, but then realism set in, and he didn’t have a core principle.
Most libertarians have a core principle. It’s protection of liberty and the absence of aggression in all areas that we have to conform to. And I don’t think he had that position. I think he’s – he comes across as a utilitarian, a pragmatism, whatever fits the moment you have to do that and not looking at the ramifications. But if that is the case, he fits in well because that’s what the whole philosophy of Keynesian Interventionism is. They think they can be pragmatic and just look at one issue without looking at the philosophy. But it’s a little more blatant with President Trump.
Chris: Well, I wanted to bring all that up because, of course, I consider the militarization of the United States to be one of the key causes for loss of liberty, loss of freedom, and in talking about that liberty and freedom, to the people listening, especially the younger people, how do you advise people to go about creating more – is it ever going to be possible to recreate the sort of freedoms we once enjoyed? What’s the path here that you talk about?
Dr. Paul: Well, it has to be educational. It can’t be political. Even though I was in politics all those years, I never set out a goal that I was going to become banking chairman and get rid of the Federal Reserve. I was much more realistic. But I spoke out in the 70s mainly to have a podium because I was so annoyed with the Federal Reserve and the breakdown of Bretton Woods and that sort of thing. So I spoke out and I guess I was surprised as anything that I actually went to Congress. But some people a lot of time ask me, weren’t you really frustrated? What happened? What did you really do? You didn’t change anything. I said, no, I was never frustrated at all - I was just very realistic about what happened. I never deceived myself. Actually, I was pleased with the attention we got because we’ve certainly called a lot of attention to the Federal Reserve.
But I think it’s totally educational. Everybody has a role to play. If you believe in this philosophy you can be creative and find out something you can do. People can write books. They can get on television. They can get on the internet. They can become teachers. They can be – maybe someday we’ll get rid of the influence of Hollywood and the scandals of Hollywood and have people do more decent movies and more driven by the principles of liberty. Ideas are the most important. Ideas have consequences. Bad ideas have bad consequences. And if you have an idea whose time has come and it’s a good principle, nobody can stop it. The military and the government can’t stop it, and that’s why I’m leaning in the direction of believing that the time has come, out of necessity, that we have to restore this whole love of liberty and the principles of liberty. And that’s where I do think that we’re winning the ballgame.
Chris: All right. And those ideas can be found in the book, The Revolution At Ten Years. It’s in Amazon. IT’s on bookshelves right now. Our guest is Dr. Ron Paul. So get the book, read it, learn because an idea can defeat an army, or if said the other way, an army can’t defeat an idea. Dr. Paul, how can people contribute to your fine efforts if they want to or even just follow your movement and writing more closely?
Dr. Paul: Well, we do a daily program, TheLibertyReport.com and go there. But the one organization right now is the Ron Paul Organization for Liberty, Peace and Prosperity. So that’s the place to go. But go to my Ron Paul Liberty report and that’s what we do something every day on.
Chris: All right. Well, the Ron Paul Institute for Peace and Prosperity. Great site. I visit there all the time. Dr. Paul, thank you so much for what you do in the world and for your time today.
Dr. Paul: Very good. Nice to be with you. Bye-bye.