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Ron Paul: "Let The People Who Have Lived Beyond Their Means Go Bankrupt; Let The Liquidation Occur"

Presidential candidate on FEMA, government intervention, the Federal Reserve, Libya and the Constitution: "We are out of money. This country is bankrupt."

Rep. Ron Paul (R-TX) appeared on "FOX News Sunday" for his turn in the show's continuing series of interviewing Republican presidential candidates vying for the party's nomination.

The segment began with Ron Paul giving his opinion on FEMA and what the federal government's response to a natural disaster should be.

Rep. Paul trashed FEMA as "deeply flawed" and continues the path of dependency on the government. "It's a system of bureaucratic central economic planning, which is a fallacy that is deeply flawed. FEMA has been around since 1978. It has one of the worst reputations for a bureaucracy ever," Mr. Paul said. "I want to transition out of this dependency on the federal government."

Ron Paul says the states should decide if they need federal help instead of the government forcing itself on states that are threatened by natural disasters.

"We are out of money. This country is bankrupt," Paul stressed after explaining FEMA was in "big trouble financially" as well as the federal government itself.

Paul says the U.S. intervening in Libya is unconstitutional, again stressing that the nation is bankrupt.

Moderator Chris Wallace displays the Gallup poll showing Mr. Paul in third place nationally in the Republican primary with 13% and receiving 45% to President Obama's 47% in the general election. Paul is asked to explain why he is resonating with Americans.

Chris Wallace: "Your libertarian views are certainly somewhat unconventional but they have picked up growing support and lets take a look at the numbers if we can. [poll shown]

"Question, what's going on here? Why are you gaining traction this year?"

Rep. Ron Paul: "Well because it's a good idea and it's the American ideal. But I'm fascinated with your word unconventional. Isn't it strange that we can apply that word to freedom, and liberty, and the Constitution, limited government and a balanced budget?

'You're proposing this unconventional idea of government!' Well, I think you're right about it. Under today's circumstances it has been unconventional for probably 50 years. But right now, the Tea Party movement and the Independents in this country and the people who are caring about our bankruptcy, they think what we had is unconventional with regards to our Constitution and the principles of liberty.

"So, yes, people are waking up and they're saying 'Yeah, Ron Paul's right. Why are we fighting all these undeclared wars? Why do we have a Federal Reserve that bails out the rich and dumps on the poor? And why is it that deficits don't really matter and politicians just stand around and talk that they're going to nibble away at a budget deficit that is 10 years out.' So, no, this is a very popular philosophy.

It is not my philosophy, it is the philosophy of the Constitution. It's the philosophy of liberty, property rights and not dependency on government. That's the big thing. People are supposed to assume the responsibility for themselves in a free society.'


Ron Paul responded to a common criticism that 'if he hates the government so much, why does he want to be president.' Here's what the Congressman said:

"Yes, I am in it to win it. … I want a new approach, at least from current standards for the presidency. I want to obey the Constitution and follow its very great restrictions on the government. The Constitution was written to restrict the government, not to restrict the people. Now its turned around: We use government to restrict the people in all matters. So, I would like to reverse that."


Candidate Paul continued his criticism of the Federal Reserve, the central bank of the United States. Paul, who believes the Fed is unconstitutional, tells them to get rid of artificially low interest rates, quit printing money and stop bailing their "buddies" out:

"Take your hands off of it. Let the people take care of it. Let the people who have lived beyond their means let them go bankrupt. Let the liquidation occur. Get rid of the malinvestment (artificially low interest rates and printing of money) like we did in 1921. We recovered. It's not, it's hardly even in our textbooks about the Depression of 1921 which was a natural consequence of the inflation for World War I.

"So, we want our hands off. The depression lasted 17 years because we wouldn't do that. Japan, has had 'hands on.' They've been in the doldrums for 20 years and so, we're now into this one. It's a lot more than 5 years, we've basically been in it over 10 years that our economy has been slipping. So, they would say 'hands off, give us a sound currency, free up the markets, property rights, enforce contracts. And make sure people go bankrupt when they're bankrupt. And don't bail out their buddies. Don't let the Federal Reserve create money out of thin air and bail out their buddies.

"The most important thing about Austrian economics is the artificially low interest rates which cause business people, savers and consumers to do the wrong things. They make mistakes. It's sort of like a price control that causes all the problems."


Paul then talks about Federal Reserve Chairman Ben Bernanke's announcement from Jackson Hole, Wyoming that the Fed is taking a wait-and-see approach to the economy this month.

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