“We Didn’t Stimulate Anything With That Bill Except the Growth of Government.”

Dr. Ron Paul has always gone his own way in the U.S. Congress. A man committed to his principles of limited government, he’s been described variously as a visionary or a Don Quixote. During the presidency of George W. Bush, he was the Republican Party’s opposite of John McCain – while the latter antagonized the party faithful by charting a centrist course, Paul dismayed many Republicans by standing firm on strict constitutionalist principles that led him to oppose many of the “big government Conservative” initiatives such as the War in Iraq.

Interview Video - Part I

Paul first won election to congress in the 1970s as a Republican. He ran for president in 1988 as a Libertarian and again 20 years later as a Republican. Although his campaign drew widespread support among constitutionalist conservatives across the country, Paul resisted the idea of running again as a third-party candidate. Still, the support he got across the country was a rare bright light in an otherwise dismal conservative landscape.

The Texas Republic News sat down with Congressman Paul recently and held a wide-ranging interview on where he thinks the country is going, his impressions of the new president and the stimulus bill and the implications of the economic downturn on liberty and government.

Economic Stimulus Plan

On the record, $800 billion stimulus bill, Paul says it’s a stimulus bill in name only. Although it contains some tax cuts – about 30 percent of the bill – he complains that it is loaded with tons of wasteful spending.

“There are some tax cuts in there...and most of those are probably very good,” he said. “If that’s all we were doing, I’d be anxious to vote for it, but even that isn’t the best way to do it.”

Congressman Paul’s suggestion would be to simply suspend income taxes temporarily, something he says would have an immediate positive effect on the economy.

“That would put money right into the hands of the people, rather than putting it into the hands of the government,” he said. “The government doesn’t know how to spend this money and it supports the special interests.

“Even with these tax decreases that they have in the stimulus package, if we didn’t have all the spending – it would be best done by cutting spending at the same time. Cutting spending by so much that you literally could reduce the deficit and take care of the tax cuts as well.

“Cut spending overseas and cut taxes and recognize that people need to save money and cut their debt down rather than saying, ‘Oh, this is good, we need to stimulate housing and encourage people to buy houses.’ Well, they’ll buy houses when the prices go down,” he said.

“We didn’t stimulate anything with that bill except the growth of government,” Paul said.

On Barack Obama

Congressman Paul is about the furthest thing ideologically from the new president, who he describes as a “slick, smart politician.” Paul doesn’t underestimate President Obama, but says he can see through the veneer to someone who promises a lot, but who he doesn’t believe is sincere.

“He’s good. He’s smart, but he’s status quo down the line,” Paul said. “He’s the furthest thing from change than the man in the moon. I guess the only change is he’s going to expand everything that’s going wrong.”

Congressman Paul remains intensely interested in monetary policy, fiscal policy and foreign policy. This year, he will again file legislation to pull the United States out of the United Nations – legislation he offers every year, despite its failing to gain political momentum. He also has legislation to get rid of the Federal Reserve System.

But he is a realist. Although he files the big picture bills for principle, he also files legislation that tends towards the same ends, but which has a greater chance of getting passed.

“There will be another bill that I’m going to introduce shortly that will at least allowing congress some oversight and some legal permission to audit the Federal Reserve,” he said. “Right now, we’re not allowed. They’re exempted from audit. And under today’s circumstances where they’re literally creating trillions of dollars out of thin air and subsidizing and helping their friends in the banking industry and corporations, it’s time the American people knew what was going on and it’s up to the congress to demand that.”

The Growth of Government Spending

Congressman Paul believes that America’s overseas commitment has been a major financial burden and helped precipitate the current crisis. Big government Republican spending abroad, and the Liberal welfare state at home, he said, are two sides to the same coin.

“I think politically, it will eventually be easier to cut spending overseas than it will be here at home,” he said.

Rick Perry and the Stimulus Bill

Texas Governor Rick Perry recently flirted with turning down the economic stimulus funds, but instead decided to take them. Although Dr. Paul understands Perry’s motives, he disagrees with taking the funds.

“I don’t think it’s a very good idea because the obligation’s always so much greater than it would be if we didn’t have to take it,” he said. “The money should come back to us. It should come back to us through reduction of taxes.

“Under these circumstances, I personally wouldn’t do it and wouldn’t want it, but I’m not highly critical of somebody that says, ‘Well they’ve taken so much from us,’” he said.

“Soon it won’t matter, because the federal government’s broke and the dollar’s not going to be buying much anymore, so it would be better if the states concentrated on their plans on how they’re going to manage their affairs when the federal government’s totally bankrupt,” he said.

Rather than solving the problem, Paul said that the stimulus bill will accelerate the process.

“It’s going to make it much worse,” he said. “We got into trouble because we spend too much and we printed too much. And they think they’re going to get out of trouble by spending and borrowing and printing money. So the stimulus package is only making this whole thing much worse and the deficit is exploding. The only thing that hasn’t exploded is inflation, but we just had inflation statistics (Thursday) and producer prices are much higher than anyone anticipated.”

“This is very significant,” Paul continues. “Most people think that when you have a very week economy, demand is low and prices will go down, but that’s not necessarily true. All you have to do is go into a third world nation and you can have a very weak economy and you can have Zimbabwe-like economy. And they say ‘Oh, not in the United States. It can’t happen.’ Well, keep printing the money. It can happen.”

A Slippery Slope Toward Socialism?

Dr. Paul is worried that government may in fact be moving in the direction of socialism, something even Republican moderates like John McCain worried about during the campaign. But he sees it a little differently.

“I don’t think it’s in the direction that some people think that all of a sudden the government’s going to own everything and have some kind of a system like in communist Russia where the government owns all the businesses,” he said. “It’s going to be something probably a little bit worse.”

Congressman Paul sees the real danger in a kind of new mercantilism – the government model of much of the world prior to the 20th Century, where government doesn’t own the companies, but pulls their strings. It is a model which was embraced by most Fascist nations in the 1930s.

This danger, he said, is created by a crisis of confidence in capitalism, which he said is entirely unfounded.

“We right now don’t have free markets, but all the problems and people watching are blaming freedom and free markets and capitalism and deregulation for the crisis that we have,” he said. “And that has to be refuted. What we’ve had is an interventionist system, and that is a centrally planned economy through regulation and subsidies and spending and manipulation of interest rates.

“It’s not socialism, because prices still fluctuate in the marketplace, but we’re on the verge of tipping over into a social system where the pricing structure breaks down in the way that the housing pricing structure has broken down,” he said.

Paul said that the true socialist model fails wherever it’s tried, including in America. In 1971, he said, the government implemented wage and price controls, leading to an almost instantaneous market collapse.

It is this version of Socialism Lite that Paul most fears.

“What I fear is not open socialism where government literally owns all the businesses but something where the government and the businesspeople have partnerships. You hear it all the time: ‘We have to be a partner with the government.’ And that introduces the notion of fascism, and fascism is a form of socialism. Even though there might not be outright ownership, it’s outright control, and it leads to chaos,” he said.

Stepping Back From the World

Paul believes that in foreign policy, the U.S. should step back from its interventionist role, which he said only creates resentment and isn’t needed. He wants to bring troops home from around the world.

The Conscience of a Conservative

Congressman Paul is sometimes hard to label. Is he a Libertarian or a Republican? Or a conservative? Ultimately, he says he’s a little of all three, and refers to himself as a “strict constitutionalist.”

“I don’t take an oath to the Republican Party, the Libertarian Party or anything else,” he said. “The oath of office is to obey the constitution.

“I don’t think the constitution is perfect, and it was certainly imperfect when it began. But, the rule of law is very important. You follow the law of the land, and if the constitution says something, there’s a way to change it,” he said. “You have to change it legally. But today, we’ve gotten to the point where congress ignores it, the president defies it and the courts stomp on it.”

“So I am first of all a strict constitutionalist. But what does that lead to? First of all, that leads to well, being very conservative, you want to go back to the constitution.

“But in a personal way and in a constitutional way, I’m very libertarian. Because there’s nothing in the constitution that says the federal government is supposed to run our lives,” he said, citing abuses of our freedoms by Democrats and some Republicans, who he said abuse the constitution for their own ends.

“Too many conservatives say, ‘Oh there’s a problem, let’s pass another law’ for social or economic reasons,” he said. “A good conservative constitutionalist has to have libertarian leanings because they don’t want big government.”

The biggest problem with the Republican Party and the Conservative movement, Paul said, is that it promised a lot and then failed to deliver. He cited the 1994 Contract with America and the 2000 victory of George W. Bush.

“We had the presidency, the Senate and the House, and we couldn’t wait to act like Democrats,” he said. “Spend more, run up deficits. Bush ran in 2000 condemning nation building and policing the world.

Paul said that many conservatives are disgusted by Republicans who didn’t fulfill their promises.

“They’ve lost credibility, and how they’re going to regain it, I do not know,” he said. “It’s going to be slow and incrementally. I imagine that the only way Republicans will regain credibility is that the Democrats will be a lot worse. They’re going to be big spenders.”

Paul said that many wayward conservatives who pulled away from Republicans in the last election cycle will come back ultimately, because third parties just aren’t viable. As someone who’s run for president as a Libertarian, he knows that there are just too many institutional biases against such a run.

The 10th Amendment Legislation in the Texas House

In response to the growth and – some say – arrogance of the federal government, many states have taken matters into their own hands and are now pushing legislation that would reaffirm their state sovereignty. A bill filed recently in the Texas legislature to that effect is the latest in a series across the country. (See the Texas Republican News story on this bill here .)

Dr. Paul says such bills are “wonderful.”

“There is a lot more going on around the country,” he added. “Some are designed not only to emphasize the 10th Amendment; they’re emphasizing the monetary authority. I love it when the states are doing this kind of thing. Kansas is doing it, New Hampshire is doing it. More and more states, liberal and conservative are saying they’re sick and tired of the federal government. That’s very healthy.”

Even if we did support the 10th Amendment and returned power to the states, Paul said, if their attitude about government remained the same, it wouldn’t be much better.

“You know, there are a lot of people in Austin who’d like to run our lives too,” he said.

The question that people have to ask, he argues, is what the role of government should be in a free society. The founders, he thinks, answered it well. It was to “provide for a sound currency, it was to have a national defense and it was to protect liberty.”

Optimistic For the Future

Paul said that our problems will continue as long as people support politicians on the national and state level who believe in the “nanny state.” Nonetheless, he sees a change on the horizon as a result of the current crisis. People will learn the hard way that government can’t be all things to all people and he hopes they will take the initiative to take control of their own lives.

“You need a whole new generation like that,” he said. “I think it’s coming. It’s not in Washington yet, it’s not in Austin either. On the positive side, if you have enough people who say, we’re sick of it, we’re not going to play this game any longer, and we want the government out of our wallets, off our backs, out of our bedrooms, and out of our state affairs. But it will happen. It’s not going to happen next week.”