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MR. GREGORY: Joining me now, Republican congressman from Texas, Dr. Ron Paul.
Dr. Paul, welcome back to MEET THE PRESS.
REP. RON PAUL (R-TX): Thank you. Good to be with you.
MR. GREGORY: Let's get right to your plan. This week you unveiled a plan to cut the deficit and to deal with the economy. The key elements of it is that you want to cut a trillion dollars of spending in the first year. To do that you would eliminate five Cabinet departments: Energy, Housing and Urban Development, Commerce, Interior, and Education. On Monday in Las Vegas, you unveiled the plan, and, and this is what you said about it.
REP. PAUL: I have a personal conviction that this will not hurt anybody. You cut government spending, that goes back to you.
MR. GREGORY: How is that possible that a Draconian cut like this would not hurt anybody, particularly in this economy?
REP. PAUL: Because we have to take this money from the economy and the pure politicians get to spend it. So that's a negative, it hurts the economy. After World War II, we cut spending by 60 percent and cut taxes. Ten million people came home, and all the money and the expenditures went back to the people. And that was finally--we got over the Depression by having these Draconian cuts.
MR. GREGORY: But you have the education system in the state that it's in with big federal contributions now, and nuclear energy safeguards after what happened to Japan, environmental protections. Nobody gets hurt under, under President Paul's plan?
REP. PAUL: Well, well, you know, we cut back on those and the Department of Energy I cut. But some of those things are just transferred to, to the DOD Department, you know, nuclear controls and things like that. So they aren't eliminated. But they are significant. I'm the only one that's offering it. I mean, if spending is a problem, which all the candidates claim, spending too much and the debts to be, but who's proposing it? See, to, to me, the question I ask myself is, what should the role of government be? And I've come down on the conclusion that it shouldn't be that we're the policemen of the world and we have this runaway entitlement spending. So, therefore, if the role of government is the constitutional approach, you can't keep spending like this, because now we face this worldwide crisis of sovereign debt. That's our big problem.
MR. GREGORY: Right. But you...
REP. PAUL: But you can't deal with that unless you cut spending.
MR. GREGORY: The Fed chief has said to, to focus so exclusively on debt reduction, as you would do...
REP. PAUL: Right.
MR. GREGORY: ...could harm our prospects of reviving economic growth.
REP. PAUL: Well, I just used the perfect example. By Draconian cuts after World War II, it stimulated the economy because the resources aren't diminished. The resources are put back into the economy, and the people spend the money. But now all we do is give them debt. We tax, we borrow, then we inflate, and, and then we distort the economy. So we destroy the production, because the government takes over the economy. And that's the negative.
MR. GREGORY: As you well know, you have a lot of support among young people.
REP. PAUL: That's right.
MR. GREGORY: They're borrowing to pay for college at record levels. Would you abolish all federal student aid?
REP. PAUL: Eventually. But my program doesn't do it. There's a transition in this. But...
MR. GREGORY: But that's your ultimate aim.
REP. PAUL: Yes, because there's no authority to do this. And just think of all this willingness to want to help every student get a college education. So they're a trillion dollars in debt. We don't have any jobs for them. The quality of education has gone down. So it's a failed program. I went to school when we had none of those. I could work my way through college and medical school because it wasn't so expensive. So, when you run up debt, you print money, cost goes up in the areas that the government gets involved in--education and medical care and housing. So it's artificial and distorts the economy. So we have to look at the business cycle and the inflation, so it doesn't help people. All this housing programs? They end up losing their jobs and losing their houses. I mean, what we're witnessing today is the failure of a Keynesian economic model, and today we have to replace it with something. We either replace it with more government and more authoritarianism, more controls, or we look toward the free market.
MR. GREGORY: You mention housing. You would like to get the federal government out of housing completely.
REP. PAUL: Sure.
MR. GREGORY: And right now the mortgage giants Fannie Mae and Freddie Mac guarantee 90 percent of the mortgages in this country. So you'd get rid of the government's role?
REP. PAUL: Sure. The...
MR. GREGORY: The government's always had a role in housing.
REP. PAUL: No, they haven't always had a role in housing. They created the monster. I mean, first, the Fed creates the money, and then you have Congress get involved and say, "You do this, this and this." And then it becomes corrupt. They get involved in the derivatives business, and who gets bailed out? They got bailed out. So, no, it's a distortion of the markets. You don't eliminate...
MR. GREGORY: But play that through, Dr. Paul, because it's really quite jarring. There is no private market right now for mortgages.
REP. PAUL: Oh, no, that's not true.
MR. GREGORY: Are you going to wind down these companies? Who would buy them?
REP. PAUL: Sure. Why not put them up for...
MR. GREGORY: What happens to housing prices, to the housing market?
REP. PAUL: Put--well, it would be, the system would be cleansed. It would have been over and done with by now. But all we can...
MR. GREGORY: You say cleansed, so the market would crash again, and you think that's acceptable.
REP. PAUL: No. It, it should have--it should have had a sharp correction because it was artificially manipulated. You--once you get this distortion, you have to correct the mistake. So you do what we did in 1921. You allow the correction to occur in one year. You go back to work. If you keep transferring the debt from the private owners, or the pseudo-private owners, the Fannie Maes and the Freddie Macs that participated in the, in the bankruptcy, you bail them out and you bail out the banks and you bail out the Wall Streeters, you dump all this debt on the people.
MR. GREGORY: Let me ask you a couple things about foreign policy. Iraq, you don't actually believe the troops will ultimately come out of Iraq, do you?
REP. PAUL: Oh, no, no, I don't. We'll change their names. I mean, we're going to have--they've already admitted there'll be 15,000. But, you know, they, they've morphed the private sector with the military. The CIA and contractors, it's a mixture. But there's going to be 15,000 in the, in the armed camp, you know, the fortress, the embassy, the biggest embassy in the world. Al-Sadr, who is the champion of national sovereignty for Iraq, he says that is still occupation. And occupation is the key word for why we should look out. There's a civil war going on in northern Iraq. The Turks have already put troops into Iraq. Turks are now allying with the, with the Iranians because there's civil strife up there. That is a consequence. The, the Christians have been run out of Iraq. And, ironically, there were no al-Qaeda in Iraq. They're there now.
MR. GREGORY: Well...
REP. PAUL: So there's nothing but chaos. We are going to have a military presence there, undoubtedly.
MR. GREGORY: Under President Paul, Osama bin Laden would likely still be alive?
REP. PAUL: Oh, no.
MR. GREGORY: So would Moammar Khaddafy.
REP. PAUL: No. I, I think that's a wrong assumption.
MR. GREGORY: You would have ordered the kill on bin Laden?
REP. PAUL: I, I, I voted for it. I voted for the authority. But I thought, shortly thereafter, they didn't go after him. We had him trapped at Tora Bora, and we should have had him there. We shouldn't have gone into nation building. We dropped the ball. We went in and started a war in Iraq when...
MR. GREGORY: But you, you support, you supported the effort, then, to get him?
REP. PAUL: Oh, absolutely.
MR. GREGORY: Going into Pakistan?
REP. PAUL: I voted for it. But it should have been done, you know, in three months or two months. But also, when it started lingering, I argued against occupation, against the war, and I introduced this--reintroduced the notion of a letter of mark and reprisal and targeting one individual, rather than saying, "We're going to declare war against the world." And now, we're in all these countries, and it's an endless fight, and there's no end in sight.
MR. GREGORY: You actually, in October at the Press Club, described our foreign policy this way. I'll show it to you.
(Videotape, October 5, 2011)
REP. PAUL: We have crossed that, that, that, that barrier from Republic to, to dictatorship, to tyranny, to empire.
MR. GREGORY: To empire. If you look at what happened in Libya, do you believe that the United States has a moral responsibility to deal with humanitarian crisis anywhere in the world?
REP. PAUL: No. Only voluntarily. We don't have authority in the Constitution to get involved in the internal affairs or get involved in entangling alliances. The Constitution doesn't give the authority. They get us into more trouble. They undermine our national defense, and they caused a lot of trouble. If you want to do it voluntarily and get involved, you can volunteer and go over there and send your money. But I don't, as a president, have the authority to go. If our, if our national security is threatened, then you do it properly. This president now has gone in there on his own. He has flaunted the responsibility to go to the Congress. He doesn't get permission. And, and we went over--it, it wouldn't have happened without our money and our drones and our missiles and all. And it happened, so we're responsible for the chaos and the...
MR. GREGORY: Do you think the drone war that this administration is waging is illegal?
REP. PAUL: Yes, it is. It's illegal under international law. And there's no authority in our Constitution that we can just willy-nilly drop bombs on anybody that we want. We kill innocent people this way. Why do you think people hate us? Because there's so much collateral damage. You see, "Oh, this is a bad guy. We'll drop a bomb on him and kill him." Well, we might hit him. We might miss him. We might hit another car, and then you kill 10 other people. What would we do if they did that to us, David?
MR. GREGORY: You say...
REP. PAUL: We, we would be a little upset if China did that to us, wouldn't we?
MR. GREGORY: You said in 2000 that the, the prospect of Iran attacking Israel was like the prospect that it would invade Mars.
REP. PAUL: I didn't use those words, but essentially that might be the...
MR. GREGORY: Right. No, you actually did.
REP. PAUL: Oh, Mars?
MR. GREGORY: I looked at the transcript, yeah.
REP. PAUL: OK.
MR. GREGORY: And the reality is that the biggest existential threat that Israel faces is from Iran. If Iran attacked Israel, would the United States, under President Paul, intervene?
REP. PAUL: I--they wouldn't, they wouldn't need to. Israel has 300 nuclear weapons and missiles. The odds are so remote. Iran can't even make enough gasoline for themselves. They have to import gasoline. So they don't have intercontinental ballistic missiles. They, they don't have a nuclear weapon. There's a big discussion going on on how far along they are. And I was in the service, and lived through the '60s. The Soviets had 30,000 of them, and they were going to bury us, and we survived that. So for us to plan to go to war against Iran under these conditions scares a lot of Americans. It certainly scares the young people of the world, the people I talk to, because they're going to bear this burden financially, and also they may be required to fight these wars...
MR. GREGORY: So...
REP. PAUL: ...that are unnecessary and unconstitutional.
MR. GREGORY: Let me, let me ask you about the role of government. You've said about taxation, in a way that doesn't minces words, the following: "Taxation is immoral," you told the Libertarian Party News. Would you scrap the tax code altogether?
REP. PAUL: That would be a pretty good idea, a pretty good start. I, I can qualify it if I'm allowed. Taxation is theft when you take money from one group to give it to, to another, when you, when you transfer the wealth. Now, taxation could be accomplished with user fees and, you know, highway fees and gasoline taxes and import taxes. But the income tax is based on the assumption that the government owns you, owns all of your income and provides the conditions on which they allow you to keep a certain percentage. That, to me, is immoral, and the founders didn't like it. That's why the Constitution had to be amended in 1913.
MR. GREGORY: Social Security, you talk in your plan about allowing young people to opt out.
REP. PAUL: That's--yeah.
MR. GREGORY: Would you--is your ultimate goal that Social Security should go away?
REP. PAUL: I, I think it--there is a much better chance that it would be solvent. It's totally insolvent now. But my plan explicitly protects the elderly and the sick in the transition to be taken care of. The young get out, but the only way we can guarantee that the elderly will be taken care of is cutting spending. That's why offer a trillion dollars. So the elderly now are reassured. "Well, he's serious. He's not going to waste all this money overseas and all this foreign aid and expenses."
MR. GREGORY: But you--so you cut benefits?
REP. PAUL: No.
MR. GREGORY: Eventually, would you have to do that?
REP. PAUL: Not, not if you...
MR. GREGORY: If young people are opting out and not paying in.
REP. PAUL: I would balance--I would balance the budget. There would be no inflation, no reason for increase in cost of living increase. And, in time, I think you could raise this age. Mine was 25 and under, but it should--the only complaint I've gotten so far is somebody came up to me and says, "I'm 26. Why don't you let me get out?" And...
MR. GREGORY: Let me, let me...
REP. PAUL: And, and I think that's what the move will be because they want to--people want to assume responsibility for themselves.
MR. GREGORY: Let me ask you about politics in this primary fight. You said you were disgusted by some of the debates that you've been engaged in now. What's turned you off?
REP. PAUL: Well, I guess it's the uselessness of some of this rhetoric. I mean, arguing over who mows Mitt Romney's lawn? I mean, in the midst of a crisis, a sovereign debt worldwide crisis, the biggest in the history of the world, and the financial system of the world is about to collapse? We're about to have another devaluation of our--not our currency, but our credit rating? This is serious. And no control on the spending? I mean, we're going to have to get a handle on this. We have to quit worrying about who's mowing Mitt Romney's yard.
MR. GREGORY: You wrote, you wrote in your book "Liberty Defined" about the fact that politics doesn't really offer a lot of choices. This is what you said, "When it comes to any significant differences on foreign policy, economic intervention, the Federal Reserve, a strong executive branch, a welfarism mixed with corporatism, both parties are very much alike. The major arguments in hotly contested presidential races are mostly for public consumption to convince the people they actually have a choice." Are you saying that if Mitt Romney's the nominee, there's no choice between him and President Obama for voters next fall?
REP. PAUL: Well, you could probably figure out some choices, but you have to figure out which position that we're looking at with Mitt Romney. You know, it changes. But my point is, would there be a change in foreign policy? No, there would not. Would either one of them work on a true audit of the Fed and a change in monetary policy that the Federal Reserve can't monetize debt? No. Would they address the entitlement system? Would they ever address, either one, that we should have concern about our debt and cut something like a trillion dollars because we're on the road to fiscal insanity and a breakdown of the world financial market? No. There would not be a significant difference between the two, although on the edges, maybe. I think Mitt Romney now is probably very sincere about his right to life issue. And probably on the tax issues there would be some differences, but the big issues, the big policies, regardless, I mean, Obama was elected as a peace candidate and he expanded the war. And he goes into war without any congressional approval. I mean, when, when the Republicans get in, and they're against, you know, regulations, they give you No Child Left Behind, prescription drug programs, and Sarbanes-Oxley. So, no. The regulatory system, the spending, the deficits, the printing of money, they stay the same. And that's what the streets are telling us. Whether it's the occupiers or whether it's the tea party people, they're saying, "Enough is enough." They want some changes, and that's what they're looking for.
MR. GREGORY: Dr. Paul, we'll leave it there. thank you very much.
REP. PAUL: Thank you.
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