Texas Congressman Ron Paul has warned that passing the latest
proposed economic stimulus package would be akin to pouring
kerosene on an already raging fire.
Paul, who is also a member of the House Financial
Services Committee, warned that such measures will cause a recession
to turn into a full scale depression possibly worse than that
of the 1930s.
During a Television interview with CNN, Paul explained
why he believes stimulus funding is such a destructive policy.
"It's because the government is spending
it. If the people were spending it it would be fine, but the
government never does anything productive. They have to take
money from productive individuals and spend it in non productive
ways, so it's just digging a bigger hole, getting us into bigger
debt, and that is the problem." Paul said.
"This stimulus package is going to cost each
and every American $6700 of more debt, so how can that be beneficial?
If debt was the answer we would of never had a problem."
"We are doing exactly what we did in the
1930s, we are taking a recession and working very hard to try
and turn it into a depression." The Congressman added.
"What we're worried about right now, well
certainly I am, is that it's worse than the 30's because we're
on the verge of destroying the dollar. So if you think the financial
crisis is bad, and the financial system isn't working, wait
'til you find out when the Dollar doesn't work."
The Congressman told viewers that only by liquidating
debt, allowing the market to operate freely and allowing prices
to come down will the problem be corrected.
Paul also spoke to those who have blamed the free
market for the downturn and have suggested that deregulation
is a primary cause of the financial crisis.
"We never had a hands off approach, that's
the fallacy, and as long as we believe that we will never correct
our problem. If you blame Capitalism and free markets and sound
money for this then we can't win the intellectual fight."
"If you want to regulate, regulate Government
agencies, regulate the Treasury, regulate the Federal Reserve.
The Federal Reserve has no oversight, they're not even permitted
to be audited by law, so that's the kind of oversight we need.
The Federal Reserve has committed trillions of dollars to individuals,
corporations and banks, they don't even have to tell us where
it's gone to." he added.
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The Congressman also appeared on MSNBC this morning to discuss
the same issue.
One commentator suggested that Paul's analysis was misguided
because "The house is already on fire" and something
must be done to put it out.
"You are correct, the house is on fire," Paul fired
back, "and you think you're putting water on it, but I
think you are pouring kerosene on it." he added.
"We got into this mess by spending too much, borrowing
too much and inflating too much. Government was too big and
we had too many regulations. We had rejected the market economy
for decades, we have rejected the notion of sound money for
decades, and we got into a mess this way. So what is the proposal?
Spend more money, borrow more money, print more money, regulate
more, it makes no sense whatsoever." Paul asserted.
The Congressman suggested that a more sound approach to the
crisis would be to abolish income tax and business tax to get
Americans spending, whilst simultaneously cutting overseas spending
to cover revenue losses.
"But the problem is no one wants to cut the American Empire,"
"Even Obama's administration wants to increase spending
overseas and increase military spending. As long as you want
to run the world empire at a trillion dollars a year, believe
me you cannot solve this problem." he added.