Fox News Channel "Your World" - Transcript
MR. CAVUTO: A lot more on the particulars of what was behind this advance today. None of this was done with so much as a single dollar of federal stimulus. You can probably count one Ron Paul impressed with that. You see, he is very big on incentives, not so big on bailouts and very big on explaining the difference with us first on Fox. The Republican presidential hopeful joins me now.
Congressman, very good to have you. What do you make of today, first off?
REP. PAUL: Well, I'm not sure it's the future. It happened today. We don't know exactly what happened behind the scenes, what the president's working group and financial markets might have been doing. But let's hope it's a good sign. But I'm a little bit leaning toward the pessimistic side. I think that there's a lot of work to be done before we get back to real growth in this economy, which means that the markets will still be under attack for a while.
MR. CAVUTO: All right. Now, you might very well be right. A lot of people shared your view that this perhaps was the proverbial dead-cat bounce, Congressman, but there is a sentiment expressed here that trying to stimulate the economy through rebate checks and that sort of thing isn't going to please the guys on Wall Street. It certainly isn't going to do much for the guys on Main Street. Where do you stand?
REP. PAUL: Well, obviously, you know, sending out $800 checks to people who don't pay taxes wouldn't make much sense. And if there's a cost to it, which I'm sure there would be a stimulus package, where's the money coming from? We don't have any money over here in Washington. We've consumed everything we've gotten. So we either have to borrow it from China or we print the money, which is inflationary, so I'm opposed to that. But even the stimulus we got by the Federal Reserve drastically lowering interest rates, this is a bit of a fiction, too, because the problem comes from artificially low interest rates. And we can't solve the problems of a weak dollar by printing more dollars.
You know, the other day when the rates were lowered, the dollar had been up a little bit. As soon as the rates were lowered, people said, oh, the dollar's going to be weaker. So I think the dollar's still going to remain under attack, because you can't solve the problem of too much credit stimulus by more credit stimulus, because it will just lead to a weaker dollar. And I think they're between the rock and a hard place.
MR. CAVUTO: Now, you have said, Congressman, longer-term incentives might be the answer or as little direct-government type of disruption as possible. Is that a part of your plan?
REP. PAUL: It certainly is, a lot more less regulation. You know, recently we passed the Sarbanes-Oxley bill. That didn't help business, didn't help Wall Street. The tax code has to be changed. I'd like to see some incentives for savings, no taxes on savings, so maybe we can save again. We just print the money when we need it. And we should take taxes off of people who receive Social Security benefits. We shouldn't put taxes on interest earned or dividends. We need capital formation. We don't need to be attacking the inheritance of individuals, because that ruins capital. But we undermine capital, then we resort to creating pseudo capital at the Federal Reserve, and I think that's where our number one problem is, and that is where the business cycle originates. And as long as we have artificial booms, we're going to have these very real busts.
MR. CAVUTO: Congressman, Hillary Clinton said yesterday, when the markets were panicking, that we were in the middle of a global economic crisis. Are we?
REP. PAUL: I think we are in a financial big problem, because I think the dollar is under sustained attack, and it's payback for us living beyond our means for a long time. We have had the reserve currency of the world, but we haven't earned that trust. We've lost that trust. The dollar used to be backed by gold, it no longer is. It's a remnant of the old gold standard. And we've had this privilege of printing money for so long, and everybody's been taking our dollars but less so now. That's why the dollar is under attack. And I think the unwinding of this dollar bubble has a long way to go.
MR. CAVUTO: All right. So you're not a believer today in what the market's telling I would imagine, right?
REP. PAUL: No. I think this is temporary, but I think we need to make long-term adjustments in monetary policy, fiscal policy, regulatory policy. And we can bring ourselves out of here but not by doing the same things we've been doing that brought us to this point.
MR. CAVUTO: All right. Congressman, always good having you. Thank you very much.
REP. PAUL: Thank you very much.