Borrowing and Spending Will Prolong Economic Crisis, Ron Paul Says
March 5, 2009 - 4:48 PMRep. Ron Paul (R-Texas), a former presidential candidate, said the federal government cannot borrow, spend, or print its way out of the current financial crisis, as it is trying to do, and that similar actions by the government in the 1930s only prolonged the Great Depression.
Paul also said the only solution is to allow the market to clean out the bad investments and lower taxes and regulations to allow individuals and businesses to invest, thrive and create real jobs.
Paul made his comments during an interview with CNSNews.com after his speech at the Conservative Political Action Conference (CPAC).
Below is the transcript of the interview.
CNSNews.com: “If a stimulus package shouldn’t have been passed and a financial bailout shouldn’t have passed, what is the alternative? Don’t we need some sort of regulation to get this economy rolling again?”
Rep. Ron Paul: “We have to regulate the Federal Reserve so they don’t continue to do the same mistakes – print money – and regulate the Congress so they don’t spend money they don’t have and quit borrowing, and lower taxes, balance the budget enough and actually reduce your deficit and reduce your spending.
“So, there’s a lot we can do if we believe and understood what freedom is all about. But, you’d have to change the nature of government. You’d have to change our foreign policy. You’d have to change the fact that people believe we’re supposed to take care of everybody from cradle to grave. So there’s a lot we could do, but people aren't ready for it – so they’re going to destroy the country.
“In the meantime, pretending that if you just spend and print and borrow, that you can get yourself worked out of this – and it’s impossible. They are just going to make things much worse.
“So, the main thing, the main reason why the government should be regulating themselves and the Federal Reserve is that there’s a lot of mistakes have been made. It’s built into the economy. There’s too much debt, and there’s too much mal-investment – too many houses and too much borrowing. They have done all the wrong things and that has to be adjusted. The market has to adjust it.
“We have 19 million empty houses. To build more houses and to prop that up, you want the prices to go down. You don’t want to prop the prices up. They did this in the Depression, and they tried to keep the thing together, and it just delayed the correction, and the Depression lasted for 15 years.”