Congressman Ron Paul is my favorite representative. He is an unabashed advocate of individual liberty, fiscal responsibility, small government, and a non-interventionist foreign policy – what used to represent the core of Republican philosophy.
     Earlier this month, Congressman Ron Paul officially announced he was running for the Republican nomination for President of the United States.
     In this April 6th interview, Dr. Paul (he is an MD) discusses a broad range of urgent current issues, including the fate of the dollar, the War in Iraq, our looming entitlement crisis, oil, and the future of the U.S. economy.

     Congressman Paul is known among both his Republican and Democratic colleagues in Congress for his consistent voting record in the House of Representatives: Dr. Paul never votes for legislation unless the proposed measure is expressly authorized by the Constitution.

JW: Let me begin by asking you, why are you running for President?

RP: To see if I can get elected on a very particular platform: Limited government and introducing this novel idea that we should follow the Constitution.
     As for economic issues, I think the government has gotten too big and is out of control.
     I don't like our foreign policy of intervention and playing world policeman. It's dangerous and very, very costly.
     I think we've been going in the wrong direction, and I don't think that Republicans are happy with that. I think that Republicans over the years have always thought we stood for small government, and yet we get Republicans in charge and we get bigger government.
     I'd like to emphasize that you can be a Republican and be for less government, and we ought to stick to our promises.

JW: So how do you account for the fact that despite having Republican governments for many years, we are involved in all of this intervention overseas, and the government is bigger and more intrusive than ever?

RP: Well obviously those individuals who ran on one platform did something else, or were just disingenuous.
     They certainly didn't do what they said they were going to do, and that's why the American people are tired of them all, and that's why they lost the last election.
     But it's pretty hard to know exactly what the motivation was. I am sure they would come up with all kinds of excuses. Maybe they never believed it in the beginning.
     I happen to believe very strongly in what I say and what I do, and my voting record shows it. I think most people would trust me to do exactly what I say.

JW: If you had to list 3, 4 or 5 areas where the government has gone wrong, what would you say those are?

RP: First on foreign policy, that's a big issue. We are interventionists, and I would say we should be minding our own business and providing for a strong national defense.
     I would say that on our own borders, we have been rewarding illegal immigration, by promising automatic citizenship just for getting here, and passing out welfare for those who bring their families.
     Our monetary policy, which is something that not many people talk about, is deeply flawed. As long as we allow our government to print money when they need it, they will. And therefore it encourages the government to spend money it doesn't have, whether it's for foreign policy reasons or for entitlement programs. And that is a source of a great deal of problems in our economy.
     I think our economy is overly regulated and overly taxed. One of the reasons why we have given some corporations the incentive to leave this country is because it's more competitive to be overseas.

JW: I would like to follow up on all of these points, but first let me ask you about your run for President. Have you found much support within the Republican Party?

RP: I think more than I expected. I find a lot of support from Independents and people who used to be Republicans, and I get a lot of support from Democrats as well.
     I've had recent meetings in various states with Republican Party people, and they're pretty receptive. I often thought that the biggest challenge would be on foreign policy, but it hasn't been that way.      I gently but firmly remind them that there used to be a time when the Republican Party actually believed in this type of [noninterventionist] policy, and I remind them about Senator Robert Taft, who advocated a policy very similar to this.

JW: What do you think your chances are of winning the Republican nomination?

RP: I think they're tough. I don't think it's going to be easy. I think there's a chance. The campaign is very early. I think we have to wait and see how well we do.

JW: If you did get the Republican nomination, what do you think your chances would be of winning the election?

RP: I think that would actually be easier than winning the nomination, because the Democrats have so little to offer.
     They don't have a good position on the war. They don't have much of a position on entitlements, other than "the more the merrier."
     So I would say that the odds would be pretty good.

JW: Regarding foreign policy and the war in Iraq, what would you do differently than what's being done now?

RP: I would bring our troops home, I would end the war. I would do it rather quickly.
     Anybody who would say, "This would be chaotic," I would say chaos was caused by the fact that we went in there and we've been in for reasons that weren't right or true. It was going in that caused all of the problems.
     Immediately we could save a lot of money and save a lot of lives. Those individuals, including the Arab League, would have to settle those problems.
     I think the Arab League would step in and fill the vacuum.

JW: What about Afghanistan? Would you continue the operations there?

RP: No, I would come home, unless there was specific knowledge of where Osama bin Laden was. Then I send out just a small team of people to take care of him.
     I would not maintain the occupation of Afghanistan. That was mainly motivated by oil pipelines and some other things that are never discussed.

JW: Could you elaborate a little bit how oil pipelines were the motivation for going into Afghanistan?

RP: It's been known that certain oil companies were anxious for many, many years to be able to transverse Afghanistan to move natural gas. And that effort is still alive and well.
     Too often, whether it's a pipeline in Afghanistan or control of oil wells in Iraq, oil and economics motivates our national policy much more so than national security.

JW: What about Iran? How would you deal with the threat of them getting nuclear weapons?

RP: I wouldn't worry too much about it. They don't have nuclear weapons, and our CIA says they probably won't have any for ten years.
     I would use diplomatic efforts to have a better relationship with Iran.
     There would be no reason to assume that if they did have a nuclear weapon that they would dare attack us or Israel, because they know they'd be wiped off the face of the earth.
     The Soviets had 30,000 of these nuclear warheads with missiles which they could have delivered here, and we never felt compelled to take them on. We've never been compelled to take the Chinese on [who also have nukes].
     The Indians also have them. Pakistan, where Osama bin Laden is holding out, also has them. We don't feel like we have to invade them either.
     I would say building up this case that we have to do something to take on Iran doesn't make any sense whatsoever. It's just going to cause more problems, and spread the war, because the Iranians aren't going to take it lying down.
     If we bomb their potential nuclear sites, they are going to react, and it may well push oil up to $200 a barrel for all we know.

JW: Let me ask you another question which journalists never ask. Of course Bush is continually saying we can't allow Iran to get nuclear weapons, but what about Israel's reported 100-200 nuclear weapons? Isn't that a violation of the Non-Proliferation Treaty? Isn't that also a threat to the Middle East?

RP: Well, Israel never signed the Non-Proliferation Treaty and they don't admit they have them. But I think the point is well taken.
     When two potential enemies have nuclear weapons, it becomes stalemate. I think the world is better off because Pakistan and India have nuclear weapons. I think it would be a lot worse if say just India had nuclear weapons and Pakistan did not, or visa versa.
     I think if we weren't in the Middle East, the Israelis are very, very strong and could defend themselves, but they would then become much more motivated to talk to their neighbors.
     There's no incentive whatsoever now for them to now talk to their neighbors or to try to get along with moderate Arab nations, because they know that we will stand behind them, and do whatever is necessary, and go to war, if we have to.
     So they don't have the motivation to work out a diplomatic solution and get along with their neighbors. All that would be improved if we weren't there.
     Quite frankly people say I'm not pro-Israel enough, but I think our policy is very, very dangerous to Israel. We just keep the pot boiling over there. I think that they are in greater danger because we are there, and I think that they would be safer if they at least talked to the moderate Arab countries surrounding them.
     For instance, they're already worked something out with Egypt, and the Israelis would like to work something out with Syria. But we're getting in the middle, and telling them not to talk to Syria. I think if we left, they'd have a peace treaty with Syria.
     So there are a lot of good unintended consequences from a foreign policy of non-intervention, just like there are a lot of bad unintended consequences when we get involved militarily.

JW: When do you think the War in Iraq will end, or at least when will we get most of the troops out?

RP: At the rate we are going, if we don't have a significant change in policy, whether it's the current president or another president with very similar policies, I think we are going to be there a long, long time.
     They are building permanent bases over there. They have an embassy which is the biggest embassy in the world; it's as big as the Vatican. So I don't see a deliberate ending.
     I think it is going to end with the bankruptcy of this country. I think we will eventually be like other empires that we spread ourselves too thin around the world, and finally we run out of resources and then we have to quit.
     No one knows exactly when that is going to occur, because our wealth is not based on a strong reserve of gold and silver, it's based on the fact that the world accepts our printed money, and we get to print as much as we want.
     There will be a day that comes not too far in the future, when they are not going to be as anxious to take our money and we will have to pay a much higher price for borrowing money and for all of the products that we want, and we will have lot of inflation here in this country.

JW: So what do you think are the major economic problems the U.S. now faces?

RP: I think they're largely a consequence of Federal Reserve policies. They create the business cycle.
     They massively inflate the currency, distort interest rates, cause people to invest incorrectly, and develop a lot of excessive debt and malinvestment.
     We saw it in the Nasdaq bubble and that still hasn't recovered from seven years ago. We are in the middle of a correction in the housing bubble.
     But the whole dollar system is a bubble as well. This is all created by the Federal Reserve. I consider the distortion in the economy created by the Federal Reserve as the major problem.
     But it's closely related to an attitude that the entitlement system can go on endlessly, and we don't have to be responsible, we don't have to really pay the bills. We can pay for them just by inflating the currency. Therefore the growth of government continues.
     Entitlements aren't manageable any more. And this will all come to an end.

JW: Yes. I saw you interviewed in the film America: Freedom to Fascism, in which you were talking about the fact that Congress can't get the Federal Reserve to disclose who all of the owners are of the member banks.
     It was also mentioned in the film – perhaps a slight exaggeration – that all of the money Americans pay in personal income tax goes to pay interest on the National Debt, which is debt to privately-owned, Federal Reserve member banks.
     What sense does it make for the Federal government to borrow money from privately-owned banks, when the government has the power to issue money, and in fact issued the money they are "borrowing" from Federal reserve banks?

RP: Yes, that's right. As onerous as the income tax is, it doesn't pay most of our bills. Many of our bills are paid for through borrowing.
     The whole system depends on the fact that we are spending so much money, that we have to depend on all three methods: First we tax, and there's a limit to that. Then we borrow, and there's a limit to that. Then we resort to printing, and let the Fed create the credit.
     This just temporizes things and delays the inevitable. Eventually we need to pay our bills.

JW: So why is the Federal government borrowing money from a system of private banks when they have the power to print money?

RP: Because if they printed more than they are already, then distrust in the money would come quicker.
     It's going to come, but so far they have been able to have a delicate balance between the creation of money, and at the same time continue taxation and the maintenance of debt.
     The real benefit that we're getting is that we don't have to go to our Federal Reserve to print nearly as much as we have in the past, because foreigners are willing to take this money and debt.
     So we buy products from places like China and they take the money and they monetize it by printing yuans [Chinese currency] with our dollar. And then they buy Treasury Bills and recirculate our dollars and send it back here at very low interest rates.
     This takes tremendous pressure off of the Federal Reserve. So twice as much of our debt is now owned by foreigners as is held by our own Federal Reserve, and that is a gift. But eventually, when they quit doing that, the Fed will have to print money.
     They know that if they print too fast, confidence will be lost in the dollar. And they know that, so they try and not print too fast.
     They know some of the things that I know, and they agree with me. But they believe that they are such perfect managers that they can get away with this.

JW: There seem to be more and signs that countries, like Japan and China, which have purchased lots of our debt and accepted lots of our dollars, are getting less and less inclined to be so generous to the U.S. We also hear about countries like Iran not taking payment for oil in dollars, but demanding euros instead.
     Do you see this building up to a crash or a crisis in confidence in the dollar in the foreseeable future?

RP: Yes, I think so, but when is impossible to predict because "loss of confidence," is subjective.
     You can't say "the Chinese will lose confidence, and the rest of the world will follow and panic out of the dollar."
     We do make an effort to make sure that the dollar is the currency that oil is priced in, motivating the U.S. to go after the Iraqis and now the Iranians, because they wanted to use euros and not dollars. It is a significant factor.

JW: Turning back to the U.S. economy. Do you think there is much of a chance of a recession either this year or sometime next year?

RP: I do, but I don't bet all of my investments on that. I think the economy is slipping right now slowly.
     I think the government gives distorted figures. They claim there's no inflation, and the economy is roaring and I don't think that is the case.
     I think the economy is going to slip into a recession. I think at the time of the election next year, the economy is going to be very weak. That's probably going to be helpful to non-Republicans, because Republicans will be blamed, because we have been the ones who have been in charge, and there is a Republican president right now.
     But the Fed has a limited amount of tools, because every emergency that has cropped up over the last 15 years has been "solved" or pacified by the creation of new money. Yet it is the creation of money that is causing the problems. So we are solving our problems by more of the same, and someday that will end.

JW: Yes, historically every paper currency that has ever existed eventually becomes worthless.

RP: Yes, that is right.

JW: Following up on taxes and the Federal Reserve system, could we end the personal income tax if we could eliminate the Federal Reserve system.

RP: The only thing that will allow us to get rid of the income tax and change our Federal Reserve system, is to change our attitude about what the Federal government ought to be doing.
     So long as our people accept the notion that we should be the policeman of the world and we should have this entitlement system, there is going to be tremendous pressure on taxation, as well as inflation.
     But if we ever came around to believing in Constitutional government and limited government, then I would say we could get rid of the income tax and we should get rid of the authority of the Federal Reserve to monetize debt.
     If we in government could make all these changes, then it wouldn't be necessary to pay this debt to the Federal Reserve system, which is hundreds of billions of dollars.

JW: What do you see as the solution to our mounting entitlement obligations, now estimated at as much as $65 trillion? That is, what do we do about more and more people retiring, and fewer and fewer left working to pay into Social Security and Medicare to pay their mounting bills?

RP: That's the question of the age. Politicians aren't very likely to solve it responsibly by cutting benefits and raising taxes to bring it into balance. Nor will they go to a system where people assume responsibility for themselves.
     So I would say it's going to end badly. It's going to end when the checks keep flowing out, but there's not going to be any purchasing power in the money that we send.
     Governments always default on debt, and this entitlement system is unpayable. But they don't default just by just refusing to pay.
     Social Security recipients and everyone else will keep on receiving checks, but there will be an inflation rate that is much higher, and the standard of living will have to go down.

JW: One last question about something that personally concerns me very much. In the past few years we have seen a major attack on our freedom and civil liberties by government, with such abuses as explicitly sanctioning torture, detention without trial, military commission tribunals, and illegal wiretapping. Do you have any suggestion about what we can do to combat this?

RP: Yes, repeal all of those laws that the President uses to exert these powers: The Patriot Act, the Military Commissions Act, all of this stuff should be repealed.
     There is a new group that has been formed trying to develop a movement among conservatives in particular to show how dangerous these laws are, including the Real ID Act. They are trying to restore some sensibility to what we are doing.
     Unfortunately though, we still have a lot of Americans who say, "Yeah, freedom is great, but it's not worth very much if I'm dead," and therefore the responsibility of the government is to make me safe even if I have to give up some of my freedom.
     They forget the old adage that "If you give up your freedom for your security, you end up losing both," and I'm afraid we are moving in that direction.

JW: Thank you very much for your time, Congressman Paul. Best of luck in your bid for President.

For more information about Congressman Ron Paul, go to his web site www.house.gov/paul. For information about his Presidential campaign, go to www.ronpaul2008.com/

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