Ron Paul: "Slash Spending, Get the Government Out of Our Lives"

Last March when the financial system stabilized, many praised the Federal Reserve. Bernanke & Co. undertook extraordinary measures to bring the financial system back from the brink -- by lowering interest rates, quantitative easing, or arranging shotgun marriages between JPMorgan Chase (NYSE: JPM  ) and Bear Stearns (and Washington Mutual), Wells Fargo (NYSE: WFC  ) and Wachovia, and Bank of America (NYSE: BAC  ) and Merrill Lynch.

At the same time, Congress passed a nearly $800 billion federal stimulus package in an attempt to shock the economy back to life. A year and a half later the economic recovery is slowing and unemployment remains high. People remain dubious about whether the extraordinary measures are working, while the Fed has said it will do whatever is necessary to keep the economy from slipping further. But critics argue that the Fed has already done its job, and that it's now up to Congress, the Obama administration, and sound fiscal policies to pave a path for growth. So what should be done?

In an interview, Congressman Ron Paul (R., TX) said he thinks the current policies have failed and fostered a slowing economy. He says the U.S. is technically bankrupt, should stop spending now, and extend the Bush tax cuts forever. He is also in favor of abolishing income taxes altogether, and minimizing the role of government.

Here is an edited version of our conversation.

Jennifer Schonberger: Do you think a lack of a clear policy and/or new regulation has dented the economic recovery and created a slowing economy?

Congressman Ron Paul: Absolutely. It's the uncertainty of the future that is the biggest problem. We have no clear understanding of what taxes will be, what the regulations mean, the cost of the medical care bill, or what cap and trade will be like. On top of that we have so many problems due to malinvestments, and excessive debt from the bubble economy. You combine the uncertainty of the future with what Congress and the Fed are going to do, along with the inability to allow the corrections [in the economy] that are necessary because of government interference, and that's why we're in this mess today.

Schonberger: I recently spoke with Peter Schiff, who told me he believes we're in the early stages of a depression, specifically that the government's policies of massive stimulus and zero interest rates have positioned the U.S. for an inflationary depression in which Americans will watch their standard of living plunge. Do you agree?

Paul: I have no disagreement with that at all. I think we are, and I think that our economy has actually been getting weaker for a whole decade. We have 2.3 million fewer people employed than we had in 2001, yet the population had increased by 26 million. Real GDP has actually fallen as a result of Congress' desperate and improper attempt to try to correct this by spending $3.7 trillion in the last couple years. We didn't get one cent worth of value out of this. If you look at the nominal GDP growth from this $3.7 trillion investment, it's $100 billion of GDP. Of course, if you factor in the inflation factor, it's actually falling. This is devastating. The deflationary pressures are very heavy, and the only thing they offer is inflating the money supply. That's why I agree with the inflationary type of depression.

Schonberger: You mentioned the degree of government spending. On the U.S. deficit, do you think the U.S. is essentially bankrupt now, if it can't pay its future bills?

Paul: Yes. They're technically bankrupt, in some sense of the word. The initial indication of our bankruptcy and our inability to meet our commitments occurred in 1971 with the breakdown of Bretton Woods. Our country couldn't meet its commitments because we were printing dollars. We said we had assets to back those dollars in gold, and then we ran out of gold. But the amazing thing is the world still trusted us. This has continued to allow us to even get further and further in debt.

This is a reaction to the fact that by perceptions, the world believes that we are the strongest military and economic power -- and indeed we have been. But that's coming to an end. Statistics have shown that we've actually been in a slump for 10 years. Our policies are failing. It's just a matter of time when the world shifts their attention away from the dollar and into another currency, or into hard assets of some sort. This is when the bankruptcy will become apparent to everybody, because our dollars won't work.

Schonberger: Many say the Fed has done its job and now it's up to Congress, the administration,  and fiscal policy. What type of fiscal policy can we undertake now to pull the economy back from the slowing growth we're seeing and create a sustainable pro-growth track?

Paul: We in the Congress should be cutting spending way back. Instead of Congress backing off, they think the solution is more of the same. They tried $3.7 trillion and it didn't work. And now they talk about another episode of quantitative easing. It's just more of the same. If it doesn't work, why continue to do it? What we're doing now is we're prolonging the agony.

The fiscal policy should be slashing spending and getting the government out of our lives. We shouldn't pretend that we can maintain a world in power and a welfare state at home. We should cut back on taxes, reduce regulations, let people know exactly where we stand so that the people can start paying down their debt, liquidate the debt, and get back to the basics as quickly as possible.

If we did that, it would be rough. But in a year or so, it would be all over. But politically, it's not going to happen. The political will is not there. People expect to be taken care of, and the politicians can't believe that hands-off is the best method. So the spending will continue; it's going to get worse until the dollar is destroyed.

Schonberger: What should we do about the Bush tax cuts? Should we allow the tax cuts for the top tax bracket to expire, as the administration favors?


Paul: We should extend them forever. We should never raise taxes. We should keep lowering taxes for everybody. To think that they can bail out of this economy by putting higher taxes on higher income people -- that won't help anything. Psychologically it would be very bad, and it would be taking away capital that you need.

Schonberger: What do you think about reforming the tax system now to try to foster growth? In that regard what do you think of Senators' Wyden-Gregg's proposal to simplify the tax system?

Paul: I don't know the details of theirs, but my guess is that wouldn't satisfy me. But, I think we have to revise them. I want to get rid of the income tax and the corporate tax ...

Schonberger: Altogether?

Paul: Just get rid of the whole thing ... I don't want the revenue. I don't want the government to spend the money. I want the people to spend the money. The people are smarter. We didn't have an IRS before 1913. Some of our greatest economic growth was in the latter one-third of the 19th century.

Now if you get rid of the income tax and not change the role of government -- yes, that's going to be devastating. That would just cause deficits to further explode. In order to get rid of the income tax, the people in this country would have to give up on the welfare state and the notion that we should be the policemen of the world.

... If we were serious about this, you could have a transition program. I would cut all the money we spend overseas and take care of the people who are dependent. We'd have enough money to help the people who are so dependent on medical care and education benefits. But I think the direction is so important, and the people have to believe this in order to get their confidence back.

Stay tuned for Congressman Paul's thoughts on financial reform and how to fix Fannie Mae and Freddie Mac.

Fool contributor Jennifer Schonberger owns shares of Bank of America, but does not own shares of any of the other companies mentioned in this article. You can follow her on Twitter. The Motley Fool has a disclosure policy.


Read/Post Comments (109) | Recommend This Article (132)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 30, 2010, at 3:53 PM, bighairydogcat wrote:

    Ron Paul for president! We need a business leader to run our country. No more.

  • Report this Comment On August 30, 2010, at 4:00 PM, AvianFlu wrote:

    This is an excellent interview.

    I was a McCain delegate in two presidential elections. I thought Ron Paul was a nut. However, after much reflection it is now clear to me that McCain has a lot of bad ideas, and Ron Paul actually makes a lot of sense, in general. As someone once said: "Times change, and we with them."

  • Report this Comment On August 30, 2010, at 4:10 PM, whereaminow wrote:

    Thanks for the interview. Dr. Paul speaks timeless wisdom.

    I would hope that anyone interested in Dr. Paul's ideas would investigate Austrian Business Cycle Theory (ABCT), which is the backbone of his economic beliefs. A closer look will explain why the problems caused by artificially low interest rates cannot be solved by even lower artificially low interest rates.

    David in Qatar

  • Report this Comment On August 30, 2010, at 5:16 PM, JackH75 wrote:

    Get the government out of my life! I don't want clean running water, or good roads, or food safety, or workplace safety, or federal deposit insurance, or clean air, or basic research, or vaccinations, or universal sufferage or any of those new-fangled gimics. Give me the good old days before 1913 - cholera, work houses, food riots, lead paint, lynchings, and demagogues! Oh, wait, we still have demagogues.

  • Report this Comment On August 30, 2010, at 5:34 PM, TMFAleph1 wrote:

    I see what you did there, straw man.

  • Report this Comment On August 30, 2010, at 5:43 PM, whereaminow wrote:

    TMFMarathonMan,

    LOL, well played, sir! Being the nerd I am, I refer to it as the Venkman Argument.

    What does a balanced budget and sound money bring? Ask Peter Venkamn, spokesman for Keynesian ignorance:

    "Forty years of darkness. Dogs and cats living together. Mass hysteria!" - Dr. Peter Venkman, Ghostbuster

    David in Qatar

  • Report this Comment On August 30, 2010, at 6:00 PM, hrcrusher68 wrote:

    Mr Paul makes good sense to me. I'm not so sure about getting rid of all income taxes altogether. But, the gov't should not be taxing investments- that's actually double taxation. I mean the fed even taxes our inheritance which is simply a transfer of money from one family member to another- that's not f'in income! We should get rid of 50% of the gov't workforce, all the welfare b.s., and have minimal gov't intervention in peoples lives. Enough with the Liberal Looney Tunes already!

  • Report this Comment On August 30, 2010, at 6:03 PM, kolateepee wrote:

    I have to always laugh at politicians and political pundits who have the answers. Where were they when we decided to spend our future in the sands of the Middle East. Now they have the answers and want to tell us what we should do next. To bad we have so many people that need to listen to these guys. Actually, if anyone reading this knew what to do next they probably wouldn't be spending their time reading this crap! Me included!

  • Report this Comment On August 30, 2010, at 6:03 PM, jambenfool wrote:

    This is an investment web site. Political discussion is interesting, but not here. I don't bother you with diatribes about the true cost of industrial production (i.e., including environmental costs) because even though it is relevant to investment, more targeted discussion is more useful to investors, and the litany of vaguely relevant articles will obscure discussion of legitimate investment ideas. I you feel that Mr. Paul's lead to a particular investment tactic, please talk about that. Otherwise, at the risk of being redundant, please move political discussion to a political web site. Thank you.

  • Report this Comment On August 30, 2010, at 6:13 PM, mythshakr wrote:

    Yeah, right. "Some of our greatest economic growth was in the latter one-third of the 19th century." Bring back the sweatshops, company towns, the Pinkertons and the carpetbaggers! And it would only take a year to get there.

    That certainly was much higher standard of living than we have today; for a very few, anyway.

    Why don't we just outsource the government to China! They are already there.

  • Report this Comment On August 30, 2010, at 6:19 PM, plange01 wrote:

    obama needs to step down while the choice is still his...

  • Report this Comment On August 30, 2010, at 6:32 PM, whereaminow wrote:

    kolateepee wrote:

    "Where were they when we decided to spend our future in the sands of the Middle East"

    He was telling you not to got war in the Middle East.

    http://politicalinquirer.com/2007/10/26/ron-paul-arguments-a...

    jambenfool wrote:

    "Political discussion is interesting, but not here."

    Political intervention in the economy can have a tremendous effect on your portfolio. Inflated dollars drive stock prices higher than they should be, especially if the Fed starts intervening directly in the market like the Bank of Japan did in the 1990's.

    Good luck to you.

    mythshakr wrote:

    "Bring back the sweatshops, company towns, the Pinkertons and the carpetbaggers!"

    Please watch this video by economic historian Thomas Woods.

    http://www.youtube.com/watch?v=m-LJ3wZjD4I

    David in Qatar

  • Report this Comment On August 30, 2010, at 6:32 PM, Mstinterestinman wrote:

    We need to find a happy medium, Leave Iraq, Leave Afghanistan cut defense spending by 20% cut taxes for small and medium businesses, Offer incentives to bring production and industry back to America, Slash welfare and become a lot more selective about who gets it theres a start.

  • Report this Comment On August 30, 2010, at 7:19 PM, rfaramir wrote:

    Dr. Paul is right.

    JackH75 is wrong, thinking these can only come from government: "clean running water, or good roads, or food safety, or workplace safety, or federal deposit insurance, or clean air, or basic research, or vaccinations"

    Each of these can be provided by private means. Roads, in particular, were private when this country started, and many states had constitutional provisions against ever backing internal infrastructure due to problems they experienced when it was tried.

    FDIC, in particular, is actually a bad (rather than a good), since it presents a moral hazard.

    Bring back the Gold Standard, eliminate the Federal Reserve (audit it first), lower taxes, and watch the nation recover.

  • Report this Comment On August 30, 2010, at 7:29 PM, FinnMcCoolIRA wrote:

    To sum it up:

    "The government is NOT the solution; the government IS the problem"

  • Report this Comment On August 30, 2010, at 7:38 PM, altrue1090 wrote:

    The falling economy has nothing to do with politics or political parties. 70% of the US economy is based on consumer spending, The US population is aging, and older people don't spend or consume. The aging trend hit the breakpoint in 2008 and will continue for the next thirty years. Add in the disparities between Medicare and Social Security outflows and inflows that will also occur. This trend started in Japan in 1990, and continues there. If the government spends less, the decline will be steeper. If the government spends more, the decline will be more gradual. Nothing can stop the decline.

  • Report this Comment On August 30, 2010, at 7:48 PM, tonedeafdave wrote:

    This discussion has no place onTMF. It provides no guidance to investors as to what they should do with their money. Everything in this thread is about politics based on economic theories There are no economic theories that have any predictive power, and I would never vote for anyone who claims to be guided by one.) Can we get back to Business?

  • Report this Comment On August 30, 2010, at 7:52 PM, heckler24 wrote:

    The American economy has been contracting the last decade? As far as I am concerned, Ron Paul is proving a point that the democrats are not responsible for much of what happened. They started that middle east garbage. It makes no sense that they are talking about this now vs when Bush was in office. It is just cynical. He simply proves that their own policies are wrong and it is horse manure.

  • Report this Comment On August 30, 2010, at 7:57 PM, Natador54 wrote:

    I don't questions regarding the troubling acceleration of our federal debt. Yes, we must cut the debt spiral. However, why, of all people, give Ron Paul the time of day on this subject? We are not bankrupt as a nation, regardless of what he says. Yet, we do face tough choices ahead and he is not the one to lead us towards consensus on sharing the common burden.

  • Report this Comment On August 30, 2010, at 7:58 PM, Natador54 wrote:

    sorry for the typos

  • Report this Comment On August 30, 2010, at 8:02 PM, badnicolez wrote:

    I also thought Ron Paul was a goof during the last primary cycle, but I didn't like McCain either (and didn't vote for him in the most recent primary for Senator). Now I hope Dr. Paul runs again so I can vote for him. If you go back and look at the Republican debates, he was right on the money (pun intended).

    Privatize everything, eliminate most of the federal government and all federal taxes, have the states pay a pro-rata share based on population to support a strong military to prevent invasions and attacks, and bring all of our troops home now.

    Let charities take care of the helpless, since they will be brimming full of cash once everyone gets to decide where almost all of their money goes.

    Everything else should be done at the state or local level anyway. Congress and their aides should be paid no more than the wage of the average American worker in the private sector.

    Implement "regulations" that cause industry to self-regulate. For example, an oil company that allows one spill to happen through lax safety or substandard maintenance will lose that lease and pay for the cleanup. All other oil companies can then bid on that lease. If an oil company creates a major spill or a second spill, then they lose all their leases.

    Another example: if you want companies to clean up their wastewater, make sure they place their intakes downstream from their outflows. There are fairly simple ways to make pretty much any industry self-regulate (aside from the free market, which by itself usually does a pretty good job).

    How many times do we need to see government and regulation fail before we make the necessary change?

  • Report this Comment On August 30, 2010, at 8:11 PM, TMFBent wrote:

    Amazing. I know of no other "bankrupt" entities that can borrow money for near zero in interest payments. And to think, those investors out there have been loaning this bankrupt country money for decades and decades.

    I guess markets really can't be trusted. But wait, then who do we trust to set prices for assets? Ah, why bother. When we go back to the good old days of the 19th century, we'll have epic bank runs to wipe people out, just like we did back then every few years. Too bad for them. It's economic Darwinism (although let's reiterate that Darwinism is a highly controversial theory that's not really fact, except in the case of economic Darwinism.)

    They should know better than to put their money in a bad banks, silly people. Some might argue that the current fear of lending and investment is but a faint shadow of what you'd see if we returned to the days when everyone kept money under the mattress, because there was so little faith in financial institutions, but I say those people just haven't cowboyed up.

    Gotta stand for something, and if that means innocent people lose their life savings in bad banks from time to time, well, there are always soup kitchens funded by their kind neighbors. (Don't get me started on all the waste you get at government run soup kitchens, with their fancy metal ladles and their business-killing cleanliness rules.)

    Of course, the real joy will be moving us back to the gold standard. And we should make sure banks stop that ridiculous lending, which is how they create inflation.

    Did you know that banks lend out more money than they actually have? Every bank out there is "technically bankrupt" because they simply don't have the money to pay back depositors. They've gone and given it out to all sorts of people, many of them liberals, who use them for wasteful spending like granite counter tops, ipods, and college education.

    Think about that for a second: Your hard-earned dollars are being given away to some liberal for use to send his liberal kid to some liberal arts college, where his liberal professors teach him how to vote liberal and don't even make him say the pledge of allegiance.

    Dr. Paul is right. The people ARE smarter. The people would never spend money unwisely. You'd never catch an average American paying $700,000 for a crummy house in a beat-up, L.A. neighborhood.

    Get the government out of everything. Did you know firemen spend a lot of time not fighting fires? Let neighbors and citizens go ahead and squirt houses when they light up, and enough with the expensive, business-killing, constricting "building codes" that dictate what private citizens "can" and "can't" do with their businesses. If you don't wan't to die in a nightclub fire, then have the good sense to check the fire exits before you have that 6th margarita.

    And it's not just fire codes. Did you know that to build a house you have to follow all sorts of liberal rules? I'm not allowed to put an addition on my house, or build a retaining wall to hold back the 4,500 tons of earth on my back hill, unless I pay some kind of "tax" to the liberal government and hire some engineer to say it's OK. What's the big deal? If the wall caves in, they can always sue me, can't they? Why convict me before it happens by forcing all those rules and fees and taxes on me?

    And don't get me started on roads. private roads are so much better than public. I know that everyone I've ever met loves a toll road, and would personally prefer to pay the true costs of car transportation every day at a nice, fast toll booth.

    Snow plows? Not on my tax dollar. I've got a 4-wheel drive truck, and if those liberals can't make it down their precious "roads" without having it swept clean by my tax dollars, then maybe they should just stay home and think about what the flag really means.

    Clean water. All those government regulations. I've been to countries where the government can't provide clean water, and what's the big deal? So a few people die. If they were so smart, why were they drinking bad water? So there's no tourism, and not much economic development. If the place were worth visiting, or having economic development, then a private company would go there and build a water plant and wait for the development to show up, right? Well, they would once they can get enough gold to pay for it, since we've already agreed to make banks stop lending our money for those kinds of liberal projects.

    Really, what we need everyone to realize is this: the system is imperfect, so there should be no system at all. Forget trying to fix things, it can't be done. Every politician (except Dr. Paul, of course) is on the take, or an out of touch liberal.

    Back in pioneer days, there were plenty of roads, and equal opportunities for all, and great economic growth. Everyone could get their own justice, so long as they carried a nice, loaded gun. You see it in all the movies, at least the good movies they made before Hollywood went liberal in the 70s.

    I've got my truck, and plenty of ammo. I don't need these rules or these taxes. Back to the good old days, I say.

  • Report this Comment On August 30, 2010, at 8:14 PM, MountainHawk wrote:

    Ron Paul..REAL hope.... but not a chance in hell of getting elected by the idiotic masses of the nation

  • Report this Comment On August 30, 2010, at 8:16 PM, 2135Grace wrote:

    Didn't realize my Motley Fool membership would expose me to Rupert Murdockesque sensational headlines.

    Brothers, I expect much more - the website is Motley Fool, NOT Motley Idiots

  • Report this Comment On August 30, 2010, at 8:22 PM, MazonCreekRich wrote:

    Gee it must be nice to be so certain you are right! And to live in a world where everything is so simple!

    Two things come to mind: (i) Charles Darwin's famous quote: "Ignorance more frequently begets confidence than knowledge;" and (ii) the Dunning-Kruger Effect -- essentially, that there is an *inverse* correlation between confidence and competence.

    Ron Paul seems to be a shining example of the above. And his son Rand seems to be a shining example of the (Charles Darwin-based) aphorism that "the fruit(cake) does not fall far from the tree."

    But I am not at all confident that this is correct, it is JMO.

  • Report this Comment On August 30, 2010, at 8:33 PM, knighttof3 wrote:

    Shades of gray, people.

    ""clean running water, or good roads, or food safety, or workplace safety, or federal deposit insurance, or clean air, or basic research, or vaccinations"

    Each of these can be provided by private means. "

    Sure, in Fantasyland.

    OTOH, the Congresscritters act too often as if they "own" money, that it's theirs to dole out as they see fit. Reducing taxes will only let them control less of it, which is overall a good thing. Let them prioritize and sweat over budget just like households do.

  • Report this Comment On August 30, 2010, at 8:41 PM, xetn wrote:

    Federal taxes only account for about $2.2 trillion out of a budget of $14 trillion (about 15%).

    http://www.usgovernmentrevenue.com/#usgs302a

    So, elimination would not be neutral if we cut spending by at least $2.2 trillion.

    Federal regulation costs $1.2 trillion per year.

    http://directorblue.blogspot.com/2010/04/study-to-be-release...

    How much do you think this costs the consumers?

    Can you spot the stimulas?

    http://blog.mises.org/13711/see-if-you-can-spot-the-glorious...

    GDP: The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

    Since the government is responsible for such a large amount, we should change GDP to mean

    government provided deficits.

  • Report this Comment On August 30, 2010, at 9:04 PM, polenium wrote:

    Libertarians, have a lot in common with the ultra wealthy and corporate bad actors. They don't like to pay for public services, they just like to use them.

    I think we should Ron Paul out of our lives.

  • Report this Comment On August 30, 2010, at 9:13 PM, TMFPencils wrote:

    Ron Paul is the only true statesman today. Thank you for the interview!

  • Report this Comment On August 30, 2010, at 9:44 PM, irvingfisher wrote:

    "Paul: Just get rid of the whole thing ... I don't want the revenue. I don't want the government to spend the money. I want the people to spend the money."

    Right. No FBI, no military, no food inspection, no customs inspection, no police, no public school, no aircraft inspection, no building inspection, no courts, etc. What a genius!

    Good thing there won't be any enforcement of any gun regulations 'cause you'll need to sleep with one eye open to guard your stuff.

    "Paul:The people are smarter."

    Which people exaclty, the people who took out subprime and other crap mortgages and mortgaged themselves beyond their eyeballs, or the people who bought the CMOs made up of those junk mortgages?

  • Report this Comment On August 30, 2010, at 9:53 PM, mark3137 wrote:

    In the past I have read a number of questionable off topic articles here at and have just disregarded them without commenting.

    This one worse than usual !!

    If I want to read about politics, I go to Political websites

    . I paid good money to come here and learn about new stock Ideas, Investment strategies etc.. .

    This is one of the worst Articles I have ever read in The Motley Fool. (and I've been a subscriber 1998)

    PS I agree with tonedeafdave !

  • Report this Comment On August 30, 2010, at 10:33 PM, whereaminow wrote:

    It appears the new strategy for debating libertarians is to demand that the website hosting libertarian discussions refuse to host them.

    Well, that's typical. Those who want to tell other people how to live also want to tell them what they should read and discuss.

    How incredibly pathetic.

    The number of recs and the increased traffic on Ron Paul related content is all a website needs to know. And those who don't like it should look elsewhere,

    David in Qatar

  • Report this Comment On August 30, 2010, at 10:36 PM, hegibson wrote:

    How 'bout slashing taxes?

  • Report this Comment On August 30, 2010, at 11:21 PM, PerfectlyLegal wrote:

    Nicely done, TMFBent.

  • Report this Comment On August 31, 2010, at 12:29 AM, doublearon00 wrote:

    If you guys liked this interview, then you will love his book Revolution: A Manifesto. A really good sit down and read that will make you just say "Wow!" This guy gets it!

  • Report this Comment On August 31, 2010, at 12:37 AM, doublearon00 wrote:

    polenium,

    You wrote:

    Libertarians, have a lot in common with the ultra wealthy and corporate bad actors. They don't like to pay for public services, they just like to use them.

    I will tell you this, I am a Libertarian, and far from wealthy or even upper middle class. I agree with most everything the platform of Libertarianism suggests. Their economic policy is sound, and if you truly are a Fool then you would be wise up to look into it. We don't want the government doing anything involved with our or your lives. At the end of the day, Libertarians will allow you to keep more of your money to invest in without fear or repercussion of the tax man collecting his share.

  • Report this Comment On August 31, 2010, at 12:43 AM, AlexanderAkhavan wrote:

    It seems as though most people are missing the point about government. Governments are a necessary organization of any civilized society. The primary issue is what functions are necessary for the government to provide and what functions should the government NOT provide.

    The founders of this country realized this and decided that the federal government should be LIMITED in scope and the rest of the duties should be left to the states. Unfortunately, that is not the case anymore. The federal government seems to have no limits to what it can do. The original founders of the country would be appalled that the federal government could dictate that I must buy health insurance, for example.

    This is what many people including Ron Paul are referring to. We need government to provide a military defense, transportational infrastructure, workplace safety laws, and environmental laws, for example We dont need the government providing health care or social security. People should pay for their own health care and their own retirement.

    I would opt out of Medicare and Social Security in a second, if I had the option to do so.

    The so-called Social Security Trust fund is worthless and filled with government IOUs (Please see Dumb and Dumber movie for reference.) The government already spent/wasted the money. The sooner people understand this, which I doubt, the better.

    /Rant off

  • Report this Comment On August 31, 2010, at 12:49 AM, TMFKopp wrote:

    @AlexanderAkhavan

    "I would opt out of Medicare and Social Security in a second, if I had the option to do so."

    Yeah, you and everybody else that's paying into the system. Nobody likes it when they're paying for it, just when they need it.

    Matt

  • Report this Comment On August 31, 2010, at 1:01 AM, AUricle wrote:

    Just imagime what it would be like there were competitive bidding for things like plowing or maintaining roads. Better service, for less, and jobs galore. Mom and Pop businesses springing up, pouring life into the economy.......nah!

    Who do these Libertarians think they are?

  • Report this Comment On August 31, 2010, at 1:01 AM, TMFKopp wrote:

    @AlexanderAkhavan

    You know what... on second thought I'm going to agree with you. Only take it a step further. I want to opt out of the military. I'm not on board with the wars overseas and I don't care to have military protection here at home either. I think an M60 can be had for around $6,000 and I'm sure that investment will more than pay for itself when I'm not paying my share of military spending over a few years.

    I'll go ahead and opt out of local taxes for police too. I figure my M60 (which I plan to nickname "Arnie" after my favorite Californian) will keep most hooligans at bay.

    The fire department too... I'm going to go ahead and pull my financial support there. I rent and I figure I can carry my most important stuff out of the house in case of a fire. I'm also a pretty good aim with a Super Soaker so I can probably do the job of putting out the fire myself.

    While I'm at it, I think I'll opt out of the FDA. I'm sure they're swell folks, but I don't think I need 'em. If a company makes a drug, I'll just trust that they have my best interests and not their bottom line as the top priority.

    Yeah, so I guess I'm with Ron Paul after all, I'm sure it will be way more efficient for us to do what the government does on our own. And as TMFBent put it -- if the system is imperfect the only imaginable way to deal with it is to scrap the entire thing.

    Matt

    (PS. My grandmother took me aside when I was young and said to me, "Matt, don't you EVER trust a man with two first names." Just saying...)

  • Report this Comment On August 31, 2010, at 1:02 AM, johngonole wrote:

    ""clean running water, or good roads, or food safety, or workplace safety, or federal deposit insurance, or clean air, or basic research, or vaccinations"

    Two points I would like to make. First note the posting that when confronted with a real argument counter the arugment by saying they shouldn't be discussed. Reason offends them.

    Regarding the quote above by a poster lets first remember that Ron Paul is discussing the FEDERAL government. Water and Roads are already provided by the local or state governments. As well as education. Clean air and water is considered OK with Ron Paul and libertarians because it is considered to be a defense of private property rights. Ron Paul didn't say get rid of the EPA. I'm sure he'd streamline it. But there is nothing wrong with having an Umpire as long as he doesn't try to play the game. Research and Vacinnations are already privately funded and can be. Federal Deposit Insurance is a bad idea. Its not a hard lesson that you shouldn't put all your eggs in one basket. FDIC is a moral hazard. Work place safety laws are fine I think with most people.

    The basic argument of progressives is always to bring forth a good thing that government does and use it to justify all of the other bad, evil, or simply stupid things the government does. Rather is road building, NASA, you name it. Pretty soon you end up with 50,000 people doing what used to take 5000. At some point the largest corporation in the US (our federal govt) is going to have to cut workers, spending, etc back down to the bare essentials or this the dollar will be killed just as Ron Paul says. And yes the never ending debt dependent economy does do to things. A logical person will either spend everything they have and live in the now or they will become speculators. Which by the way almost everyone here is, because we have all figured out that if we simply stash our money in the bank it will be pretty much worthless by the time we retire. Or at a minimum worth less.

  • Report this Comment On August 31, 2010, at 1:06 AM, TMFKopp wrote:

    @AUricle

    "Just imagime what it would be like there were competitive bidding for things like plowing or maintaining roads."

    Hmmm... Who will be paying for those services? Will the plowing company have to go door-to-door hoping to collect for its services? Will we have to start a grass-roots coalition "Citizens for Plowed Roads" that will shake down individuals for their fair share?

    I weep for the trees that will be felled in order for these road services companies to submit bid proposals to every citizen of New York City in order to win the business...

    Matt

  • Report this Comment On August 31, 2010, at 1:12 AM, johngonole wrote:

    I see that TMFKopp to confuses local government with Federal government as well. Do you ever wonder why the Federal govt is so corrupt? Its because there is so much power concentrated there that it pays huge dividends to lobby there. You can greece 60 palms in the Senate and get your own private monopoly. Now if you had to do that in each city it probably wouldn't be worth your trouble.

    Ron Paul didn't say he wasn't in favor of a national defense. He just doesn't want the military spread out all over the world involving themselves in every European/Asian dispute. Avoiding foreign entanglements is one of the founding premises of this country. Where do you people come from. Fools indeed.

    Putting that aside in Orlando they built a firestation recently that had a huge gymnasium, plasma TVs all over the place, and trust me I could go on for a very long time. It was like they were living in a castle or something. It was a huge gold plate project. I'm sure the architect loved it. But in the end we just want some guys with proper training to put out a fire and help with car accidents.

  • Report this Comment On August 31, 2010, at 1:14 AM, johngonole wrote:

    Our government has allowed both banking and our social security to be large ponzi schemes. I mean how much confidence in them can you have.

  • Report this Comment On August 31, 2010, at 1:23 AM, BearishKW wrote:

    If the average American actually voted for the candidate who was best serving their interests, Ron Paul would be taking this coming election by storm. Just like Obama did in 2008.

    But instead we'll pay him the same courtesy we did last time around. We'll mumble about him here and there. We'll (the average American) agree with him on most issues facing us today. And then we'll hang him out to dry. We will laugh at him in the so-called fair national debates (watch the one's from last election).

    Then we'll (the average American) all pile into the polls like the mindless cattle that we are and vote for someone who ultimately fails us.

    Good game, America.

  • Report this Comment On August 31, 2010, at 1:30 AM, BearishKW wrote:

    Oh, and for those of you who think polotical topics have absolutely no place on an investing website...where have you been for the last decade?

    Housing bubble, interest rates, FED appointments, stimulus, ....

  • Report this Comment On August 31, 2010, at 2:53 AM, withoutlimits wrote:

    "BrokeInTheBurgh" It actually is simple. Most Politicians only want to make it seem complicated so they can spend more than the country brings in. Which is obvious to me(and I most who REALLY look). This makes the value of your money less. If you look back 30 years or so you will see that nearly everyone with a job could buy a house for about 25%. of their monthly income. Who can do that now?

    Reason?: Government caused inflation!

  • Report this Comment On August 31, 2010, at 3:02 AM, AUricle wrote:

    TMF Koop,

    That's what YOUR local gov't will determine.

    YOUR voice will have it's individual weight in shaping what YOU want. How much 'voice' do you have in Wash.D.C.?

    Regarding those trees you're weeping for? Your Federal Gov't owns millions af acres of forest lands, paid for with YOUR money, but YOU can't use those lands, and are denied access to much of it. Great, huh?

    In a libertarian place, you and a bunch of like minded people could buy up those forest lands, protect the trees, and yet make use of YOUR property as you see fit, as long as you don't step on others property rights, or breach any restrictions that YOU and YOUR fellow property owners agree on, if you choose to have a property association enforce your 'rules-in-common'.

    Got to be better than having bloated, unrepresentative, self-serving buffoons telling us what we 'need' and how much of it we're going to have to have

  • Report this Comment On August 31, 2010, at 4:24 AM, ChrisFs wrote:

    The utopia that Ron Paul and his supporters look for was tried in 1800s Europe and US. It produced miserable condition for all but a very few very wealthy people. All the Conservative bugaboos, socialism, govt regulation on industry, worker's rights, labor unions are a direct result from how very bad the conditions were during those times.

    If the ultra-free market that Ron Paul wants had worked, those institutions and laws would never had come into existence to begin with.

    Having said that, the reason I visit TMF more than any other investing site is that it is largely free of the political rants that masquerade as investment or economic news.

    I hope that TMF will continue in that vein.

  • Report this Comment On August 31, 2010, at 4:42 AM, brow0905 wrote:

    Seriously Motley Fool? Seriously? I need this Sh%& like I need a hole in the head. I get enough ridiculous politically charged comment sections on CNN.com or Yahoo. I will be officially switching to seekingalpha or thestreet if you keep up this BS.

    As stated by other level headed business people on here earlier this is an investing site. This article does not educate or cause reflection on strategies, it brings out the the loonies. People that think our water and roads should be privatized. Check out Blue Gold, it's streaming on Netflix...let me know how privatizing our water infrastructure has worked out...no thanks.

    I'm a capatilist like everyone else that visits this blog but there's a reason Ron Paul will never be taken seriously as a candidate. And there's a reason the Motely Fool is not a political site. Please learn your lesson TMF...this was shameful...

  • Report this Comment On August 31, 2010, at 5:05 AM, AshleyBaker75 wrote:

    brow0905 - I love you. I was reading this article and then the first lot of comments calling Ron Paul a 'genius' etc. which filled me with anger. Then, thankfully as I got to the comments form I read your input and realised there are sane people in this world, which rekindled my view that we have a chance to get out of this... hence the love thing :o.

    The notion that eliminating taxes will cause people to spend more in a recession is ludicrous in the extreme. The US has to tighten its belt and reduce public expenditure like other nations have and gather taxes to pay for the massive bail-out packages, where did they think the money was coming from?

    The worrying part is the number of people willing to listen and give this guy and right-wingers like him some element of respectability, he uses lines like "people are smarter than government" to get him into government. No, Ron, people are not smart, just watch American Idol.

  • Report this Comment On August 31, 2010, at 5:15 AM, whereaminow wrote:

    AshleyQ8Fool wrote:

    'he uses lines like "people are smarter than government" to get him into government. '

    Ashley, Ron is talking about economics here, not splitting atoms. Economically speaking, Ron is 100% correct. Noble Prize winning economist Frederich Hayek wrote about this "Knowledge Problem", (http://www.econlib.org/library/Essays/hykKnw1.html) i.e. local knowledge can always outperform non-local knowledge, economically. Since I know of no economist that has overturned Hayek's theory, I leave it to you to rewrite decades of economic thought and explain how bureaucrats in Washington DC are better suited to direct economic affairs over a vast geographical territory with 300,000,000 inhabitants than the inhabitants themselves.

    Try doing this without calling me a "right-winger" for bonus points.

    David in Qatar

  • Report this Comment On August 31, 2010, at 6:01 AM, d4winds wrote:

    It is now clear that TMF really is appropriately named.

  • Report this Comment On August 31, 2010, at 8:41 AM, lazytype wrote:

    Guys, a simple question:

    If value of dolar drops... stock prices and DOW are measured in USD does it mean both stock

    and DOW will go UP ?

  • Report this Comment On August 31, 2010, at 9:24 AM, queeqay wrote:

    David in Qatar,

    300,000,000 people are so thinly spread over a vast area that they cease to have accessible 'local knowledge' and would better be described as having 'micro-local' knowledge. And hence rather useless for policy en masse except for perhaps where the planning of town carnivals is concerned.

    ...and you ARE a 'right-winger.' Aren't you? You might not like to admit it, but late at night, when your eyes flutter open and the patterns on the ceiling somehow remind you of home, you know...in your heart of hearts...that you are...a right-winger. (Oh, was that just a high-horse, condescending rhetorical challenge to AshleyQ8Fool? My mistake.)

  • Report this Comment On August 31, 2010, at 9:34 AM, rrrrrr6 wrote:

    In response to all the haters that are suggesting that Fool.com should never have interviewed Ron Paul:

    Ron Paul is the only current consistent proponent of Austrian school of economics in Congress - and I'm pretty certain that this school of thought is not represented in the administration. Whether you agree with this school of economic theory or not, it does have much to add to investing/economic discussions and is very much a valid topic for a sight like Fool.com. For example, if you were convinced by the Austrian economists, you would do well to hoard gold and precious metals and sell U.S. currency.

    Obviously, Ron Paul's more radical ideas are not going to be adopted in this lifetime, as Ron Paul himself would likely acknowledge (he might have hope that the country will turn around in the next 20 years or so). However, the debate regarding the underlying theories are very much worth having, and could result in smaller policy changes with real economic effects. For example, Greenspan initially leaned towards the Austrian school, but, especially in his later years leading the Fed, did not put this theory into practice. Had he held to Austrian economic theory, things would have been different, maybe not better, but certainly different. From a theoretical point of view, the Austrian school was at the forefront of developing the theory of marginal utility (subjective economic values) and also played an important role in developing opportunity cost theory - both of which are now almost universally accepted in one form or another. The Austrian school now is marginal, but is very much not crackpot economics as many commentators have suggested.

    Personally, I am not a proponent of the Austrian school; certainly not in its strongest forms as espoused by Ron Paul. Among other things, I think the Austrian school (again, as espoused by Ron Paul - the membership in this school is ill-defined and very fuzzy on the margins) has too much confidence in individual intelligence and does not adequately allow for "herd" behavior among investors and economic players.

    Even if Ron Paul and his fellow Austrian economists are fundamentally correct from a theoretical standpoint (which is possible and certainly should be debated), the practical effects may be delayed by decades, and may never come to fruition as long as enough economic players continue to believe that the U.S. is solvent - or at least if they believe that enough other players will continue to act as if they believe this. The world is not going to start selling U.S. bonds and currency because the world prefers to believe in an economically strong America and the safety of the dollar and the T-bill. It will take a lot more than the recent economic difficulties to change this.

  • Report this Comment On August 31, 2010, at 9:37 AM, rd80 wrote:

    "300,000,000 people are so thinly spread over a vast area that they cease to have accessible 'local knowledge' and would better be described as having 'micro-local' knowledge."

    You've clearly stated the case against a large, central government - it doesn't and can't respond well to local needs. Nice job supporting David's point.

  • Report this Comment On August 31, 2010, at 9:57 AM, catoismymotor wrote:

    For those of you lambasting Dr. Paul and libertarianism I ask you to stop. Please take a breath and calm down.

    The libertarian movement, at its core, is about you being charged the least amount of taxes while preserving and expanding your individual liberties. It is that simple. Why be fearful of that?

  • Report this Comment On August 31, 2010, at 10:08 AM, CustardPies wrote:

    Ron Paul has been off his meds for too long now. It's getting old. By the way, is the Motley Fool or Fox News?

  • Report this Comment On August 31, 2010, at 10:23 AM, artheen wrote:

    Make Ron Paul the Head of the IRS. And, then we can check if he abolishes his job in the next 100 years. We need the people to "Checkmate" the Govt. and the Govt to "Checkmate" the rouges amongst us. The real development of Roads/Infrastructure and America becoming a Super Power has been due to it wise Public spending post 1935. Focused Govt. spending has built China's infrastructures in a much shorter time period. Reducing the size of the Govt makes sense, suggesting eliminating its role is only political propaganda.

  • Report this Comment On August 31, 2010, at 10:27 AM, Origin97 wrote:

    Who needs revenue?

  • Report this Comment On August 31, 2010, at 10:28 AM, mardukkorn wrote:

    It is possible to have low taxes and provide excellent services cheap. Singapore is an example. Everyone has a house, medical care is subsidised and very cheap, health Insurance is compulsory, the roads are clean, crime is low and taxes are very low.

  • Report this Comment On August 31, 2010, at 10:31 AM, catoismymotor wrote:

    Mard,

    And the authorities will arrest you beat you with a bamboo stick if you are caught chewing bubble gum. Yeah, a real paradise for sure.

  • Report this Comment On August 31, 2010, at 10:44 AM, whereaminow wrote:

    I love it. The enemies of Ron Paul and libertarianism cannot debate us on the issues: Every negative comment is either complete intolerance of a different viewpoint or strawmen arguments.

    I used to think that the Left was the only place for intellectual discourse. Sad to see they are no better than Republican loyalists at forming arguments.

    David in Qatar

  • Report this Comment On August 31, 2010, at 10:59 AM, catoismymotor wrote:

    David,

    Being socially liberal and fiscally conservative makes us the favored target of the Ds and Rs when they are distracted from attacking eachother. They hate what they do not understand. I find it interesting that so much effort is spent by them trying to bully us into silence. Is life, liberty and the persuit of happiness that radical of a concept today?

    Cato

  • Report this Comment On August 31, 2010, at 11:04 AM, intelledgement wrote:

    Anyone who believes macro-political, -social, and/or -economic discussion is out of place on an investment forum needs to remove the blinders and take a good look around.

  • Report this Comment On August 31, 2010, at 11:09 AM, whereaminow wrote:

    Good morning Cato,

    I think it's so radical that rather than contemplating it, they'd rather stick their heads in the sand.

    Like you, I've always known that Republican loyalists are intellectually bankrupt, but it is disheartening to see that liberals are not only bankrupt but also intolerant. I guess the fake Left/Right paradigm works. They're so busy splitting hairs over income tax rates and the amount of welfare/warfare, that they can't consider any argument outside of that narrow spectrum defined by their overlords as the proper Left and Right range of acceptable ideas.

    I don't like to say people are brain-washed, but this comment thread is discouraging.

    David in Qatar

  • Report this Comment On August 31, 2010, at 11:10 AM, mtf00l wrote:

    It would appear the only thing we can all agree on is to disagree. Interesting the human experiment. I propose there is no difference between "right wingers", "left wingers" or any other "wingers". We all see our own evils and utopias and they are just as real to each of us. The sense of "community" has long left "our" country. We have collectively become the "my" country society. No one here has the resources to effect any change however, every one has strong opinions that are justified and validated in their own minds and experiences. We aren't even able to agree that there should be "free speech". I confess, i have never read the rules regarding posting on the Fool message boards however, based on many message boards I've read there are no restrictions from political, religious, financial, economic or plain opinionated posts. As long as the language is clean and there are no "patently offensive" statements, it is an open forum and provides you what? The freedom to choose. The freedom to respond. The freedom to ignore. And yes, the freedom to criticize. There is a quote I'm sure many of you are familiar with; "All that is required for evil to flourish is for good people to do nothing". I submit, instead of blogging and complaining about bloggers, "do" something. Act. However seems most correct to you, because once you do you will find no end of allies and there will be no end of opponents.

  • Report this Comment On August 31, 2010, at 11:11 AM, mtf00l wrote:

    It would appear the only thing we can all agree on is to disagree. Interesting the human experiment. I propose there is no difference between "right wingers", "left wingers" or any other "wingers". We all see our own evils and utopias and they are just as real to each of us. The sense of "community" has long left "our" country. We have collectively become the "my" country society. No one here has the resources to effect any change however, every one has strong opinions that are justified and validated in their own minds and experiences. We aren't even able to agree that there should be "free speech". I confess, i have never read the rules regarding posting on the Fool message boards however, based on many message boards I've read there are no restrictions from political, religious, financial, economic or plain opinionated posts. As long as the language is clean and there are no "patently offensive" statements, it is an open forum and provides you what? The freedom to choose. The freedom to respond. The freedom to ignore. And yes, the freedom to criticize. There is a quote I'm sure many of you are familiar with; "All that is required for evil to flourish is for good people to do nothing". I submit, instead of blogging and complaining about bloggers, "do" something. Act. However seems most correct to you, because once you do, you will find no end of allies and there will be no end of opponents.

  • Report this Comment On August 31, 2010, at 11:15 AM, catoismymotor wrote:

    mtf,

    I agree that it is important to not just talk the talk, but to walk the walk.

    "You must be the change you wish to see in the world" - Mahatma Gandhi

    Cato

  • Report this Comment On August 31, 2010, at 3:06 PM, gman5556 wrote:

    Ok so cutting spending as well as tax cuts is supposed to fix the deficit? That would just keep the deficit stagnant.

    Unless of course you believe in that ludicrous theory that cutting tax rates encourages people to pay more taxes.

    The problems in the US today are not new and have been culminating since the Reagan era. Just because it all happens to blow up today you can't blame Obama. His handling of the issues is of course debatable, but the cause is not. But as long as there are lobbyists, there will never be a "free market" economy.

    Its easy to throw around statements like "free market", "no more taxes", and "no gov't intervention". As long as private groups fund political parties, there will never be a free market. Votes are bought and sold irrespective of the needs/desires of the people who vote for their reps in gov't. Why do you think the tax system is so complicated? Years of special interest groups fighting for special consideration for their industries/companies.

    And going back to the gold standard? How would that accomplish anything? Establishing your currency on an asset which is impossible to fundamentally value is ridiculous.

    I lived in America for 2 years, in the South. I would absolutely agree with David when he says most people are brainwashed in the US, mostly through religion.

    There are 2 critical issues America must conquer: 1) abolish lobbying & any special interest groups from interfering with policy planning/implementation (especially religious based organisations).

    2) Use policy to ensure interests are aligned appropriately instead of trying to scare people out of wrong doing by threatening with harsh punishments (especially for the financial sector). Restrictive policy will always be ineffective because it is retrospective. No matter how much restrictive regulation there is, new gray areas will emerge and will always be exploited.

    How can you accomplish these 2 things? I have no idea. But I do know they are absolutely critical to the future of America.

  • Report this Comment On August 31, 2010, at 3:16 PM, rd80 wrote:

    "Unless of course you believe in that ludicrous theory that cutting tax rates encourages people to pay more taxes. "

    The 'ludicrous theory' is that the economic expansion generates more tax revenue. The ludicrous fact is that's exactly what happened following Kennedy's tax cuts, Reagan's tax cuts and Bush's tax cuts.

  • Report this Comment On August 31, 2010, at 4:28 PM, TheDumbMoney wrote:

    Just so you're all clear, we would not be the same America we are today if we did what Ron Paul asks. Soon, we would no longer be a world power. Instead, we would essentially be a collection of fifty tiny countries, only a few of would crack the top twenty economies in the world. Ron Paul essentially wishes that the Constitution had never been signed, and that we had instead somehow managed to make the Articles of Confederation work out. While he points to growth in the latter half of the Nineteenth Century, he neglects the bank panics and the long recession, which *I believe* until the Great Depression was the worst economic period the U.S. had ever experienced. IT IS NO COINCIDENCE THAT THE RISE OF THE US AS A WORLD POWER COINCIDES WITH THE RISE OF FEDERAL GOVERNMENT POWER AND THE WEAKENING OF STATE POWER. (Sorry for the all-caps.) We are seeing the same thing today in China, where a powerful central government is steering the ship, setting regulations that provide a roadmap for business, setting up enterprise zones, promoting education, etc., not doing a perfect job, but generally economically besting (by a long shot) other developing countries whose politics are more diffuse. It would be amusing, if it were not so sad, that many of those willing to sign on to Ron Paul's plan to take us a back to the Nineteenth Century are also the quickest to invest in China. This man is a populist, half-educated demogogue, and the worst sort of menace.

    This is not to say I'm a big fan of all government regulation, or a statist, or of our tax system. Like many here, I'm generally a socially liberal, fiscally moderate to conservative soul. Which means I have some libertarian in me. But there is a line, dudes. Ron Paul crosses it, big time.

  • Report this Comment On August 31, 2010, at 6:27 PM, TheDumbMoney wrote:

    rd80, you say: "The 'ludicrous theory' is that the economic expansion generates more tax revenue. The ludicrous fact is that's exactly what happened following Kennedy's tax cuts, Reagan's tax cuts and Bush's tax cuts."

    I can't speak to Kennedy's and Reagan's tax cuts, but this is 100% wrong following Bush's tax cuts -- even the most ardent supporters in the fomer administration admit these cuts have done nothing, so far anyway, except contribute to deficits. They have not been revenue positive at all. I think here we have a case potentially illustrating the maxim: there are no bad ideas, only good ideas taken to extremes. It seems very plausible to me anyway (I'm not asserting it as truth) that if you cut tax rates way down from a top marginal rate of 90% (which is what Kennedy did), that will juice growth and be revenue positive, whereas if you cut top rates from 39% to 33% or 36%, what Bush did, your marginal economic benefit of cutting taxes is vastly lower, if not negative. Do I know for sure? No. Does any commenter on here spouting some economics they read somewhere or heard on CNBC know for sure what they're talking about? No. Nobody knows. Nobody, for that matter, has the first clue. Not Ron Paul, not Paul Krugman, not Barack Obama, not Sarah Palin, not anyone.

    They're all flying on the wings of theories.

    Wo why do we all have to be so absolutist? And so confident? It's nonsense. Why do I have to listen to people on one side, like the person you were responding to, who seem to be saying that cutting taxes always causes deficits (or never causes growth), and people like you and Ron Paul on the other side lauding tax cuts uncritically? So depressing, people! Sometimes it seems like there is nobody left in this country who is interested in seeing what reality the facts dictate; rather, everyone on the left and right seems obsessed with fitting the facts to the reality they wish we had (or that they have decided to believe we have, since, as mentioned above, nobody has a clue).

  • Report this Comment On August 31, 2010, at 6:34 PM, framehorse wrote:

    This has all taken place again and again. We are living in the time of the American Empire. Ever seen an empire that didn't fall? The bigger they are, the harder they fall.

    Lets see.......... I think at the time of the fall of the Roman Empire there was about 3 or 4 percent of the population that was the elite rich. Then there was about 26 percent of the population (the working man) left trying to hold it together before it crashed. It didn't work then and it won't work now.

    We live in a world consumed with greed, dishonesty and laziness. See how much I can get and I don't care who goes under for me to get there.

    It dosen't seem to matter which person or party you vote for, they tell you what they think you want to hear and then sell your hopes and dreams down the river and continue with the self- serving and "how much power and money could be mine", line of thinking. Yes, I know, EVERYBODY doesn't think that way but that's the real interest of far too many, and if not changed, WILL bring us down.

    I don't think I'm a pessimist, just a realist. Read your history books. Just hope I'm no longer here to see it happen.

    Praying for time.

  • Report this Comment On August 31, 2010, at 7:07 PM, TMFBent wrote:

    "The 'ludicrous theory' is that the economic expansion generates more tax revenue. The ludicrous fact is that's exactly what happened following Kennedy's tax cuts, Reagan's tax cuts and Bush's tax cuts."

    False, actually. Even conservatives agree on that. At least conservatives who are more concerned with the facts than with supporting policies they like for other reasons.

    http://www.factcheck.org/taxes/supply-side_spin.html

    We have had economic expansions in times of tax increases as well as during times of tax cutting. The big difference this century was that the economic expansion on the back of the housing bubble coincided with major tax cuts and huge, unfunded spending increases.

  • Report this Comment On August 31, 2010, at 7:52 PM, TMFFuz wrote:

    Great interview. I've been a huge Libertarian forever. Only when the people wake up and demand change will it happen.

    The mainstream media tried to make Ron Paul out to be a "nut". But, what has happened since the election? More of the same...

  • Report this Comment On August 31, 2010, at 9:00 PM, whereaminow wrote:

    Nice. I love watching liberals and conservatives split hairs over whether we should have a top tax rate of 39% or 35%. Truly fascinating stuff.

    Tax cuts without a corresponding spending cut are not tax cuts at all. They just pass the tax on to future generations. The difference must be borrowed, and borrowed money can only be repaid by future tax increases, printing money (inflation tax), or more borrowing.

    So people that advocate tax cuts without spending cuts are tax hikers. That's the supply siders. That's Ronald Reagan, GWB, and the rest of the conservatives.

    Libertarians, and Ron Paul, already know this, hence his "no" vote on every federal budget increase since 1971, but thanks for the review.

    Now if anyone is interested in Austrian Business Cycle Theory, let me know.

    David in Qatar

  • Report this Comment On September 01, 2010, at 12:21 AM, colleran wrote:

    What I would like is an example of another country that is successfully using the libertarian approach to government. Are there any?

  • Report this Comment On September 01, 2010, at 12:35 AM, whereaminow wrote:

    colleran,

    Logical fallacy

    http://en.wikipedia.org/wiki/Negative_proof

    David in Qatar

  • Report this Comment On September 01, 2010, at 12:53 AM, AlexanderAkhavan wrote:

    At Matt: I wrote "We need government to provide a military defense, transportational infrastructure, workplace safety laws, and environmental laws, for example. We dont need the government providing health care or social security. People should pay for their own health care and their own retirement."

    I never said that we do not need government. I stated that we need a LIMITED government.

    The reason that I would opt out of Medicare and Social Security is several reasons. One is that in 5 years (I will be 44 btw), I will be financially independent. I also plan on traveling and living in other countries, where Medicare is useless. Social Security is a ponzi scheme if you do the math. The government has promised to pay more that possible. I also pay for my own health insurance and would not want to ever be in a government run program.

  • Report this Comment On September 01, 2010, at 5:05 AM, AshleyBaker75 wrote:

    whereaminow - just one quick question: does the local burger flipping voter understand what the hell any of that means? But his vote counts just the same as the economics professor that does.

    I would dearly love the expert to be in a position to impact government policy for the good of a nation, not for the selfish masses that would vote for anyone who promises them selfishly personal riches.

    ...and Ron Paul is no professor, that is a given.

  • Report this Comment On September 01, 2010, at 10:19 AM, whereaminow wrote:

    AshleyQ8Fool,

    There is no "good of a nation." A nation is an artificial and arbitrary construct of the ruling elite.

    I can't even begin to fathom what possesses you to write such horrible psychopathic nonsense like "the selfish masses."

    How dare Ron Paul want to treat people as individuals and allow them to arrange their own affairs, right?

    Why don't you get on with exterminating all of us already? It's the logical outcome of all efforts at collectivist egalitarianism through force.

    David in Qatar

  • Report this Comment On September 01, 2010, at 1:08 PM, jvgfool wrote:

    Not a very hard hitting interview. Ron Paul lives in the dream world of the 1800's when things were simpler and it was a bigger world. The opposite is true today. He obviously missed the lessons of the last few years.

  • Report this Comment On September 02, 2010, at 1:48 AM, AshleyBaker75 wrote:

    whereaminow - what?! I mean seriously... what? "A nation is an artificial and arbitrary construct of the ruling elite." haha, if that's your view then there's no point. Priceless.

    A nation is what defines us from just a wondering band of nomads, it's what differentiates us as a civilisation. But your alternative is a bunch of hermits gathering as much personal wealth as possible and sod the rest of them. Nobody *wants* to pay taxes (hence the selfishness), I'm sure if you checked even the most socialist advocate, he didn't ask to pay more taxes, but as soon as you fall ill or need your rubbish collected, a crime solved or fund yourself on the wrong end of a armed conflict you'll be glad you did pay.

    And you complained about being called right-wing... tsk tsk.

  • Report this Comment On September 02, 2010, at 9:31 AM, fransgeraedts wrote:

    Dear All,

    two points.

    (1) About the Fool

    I am not against the Motley Fool interviewing Ron Paul. I agree with many that of course the role of government policy in economics is a worthwhile subject to discuss here. However if the Motley Fool wants to stimulate that debate they should bring in politicians and economists that represent all sides of the spectrum. If they do not do that then they become partisan in a way that is a breach of the spirit of the Fool and of the implicit covenant between the Fool and the community.

    I would appreciate it if the Motley Fool would clear this point up in an official reaction to the publication of this interview and the debate it provoked. Is the Fool still commited to a non-partisan stance? And if so will they bring us interviews with economists and politicians across the spectrum?

    We are i believe an experiment in "collective intelligence". We are trying to create a "community of inquiry" with a focus on investing. For such an experiment, such a community a non-partisan stance is vital. All sides should be willing and able to participate in the "inquiry". Only under those conditions can we expect the best results of experiment and inquiry. The "host" of such an experiment, such a community cannot be partisan, because if he is, we will lose the input of that part of the community that can no longer identify with the endeavor.

    Much is at stake.

    (2) About the libertarian position.

    There is a strong libertarian undercurrent present here in our community of inquiry both on the boards and on the blogs of Caps. I welcome that presence even though i do not agree with the libertarian position. I am glad about the presence because we can here discuss that position extensively. We can understand it, learn from it, and ultimately -who knows? -but that is my wager!- refute it. Let's see.

    Of course that discussion needs space and time. Lets move it to the blogs in Caps. That is i think the best place for it. I will certainly take part in it.

  • Report this Comment On September 02, 2010, at 6:31 PM, SLSguy wrote:

    Does anyone out there honestly think that 300 million human beings with diverse backgrounds and diverse needs living under the laws of one country on a planet of 6+ billlion human beings living in many different countries under many different sets of laws (or none at all) can solve all their huge problems by just minimizing the federal government? Are all the competing interests of individuals, neighbors, state and local governments, corporations and foreign powers just going to work themselves out? How? Why?

    Ron Paul's answers are logically consistent as long as you buy the assumption that our problems are simple. They are not, and he is simplistic.

    We're in a huge mess and it will never get better until we are willing to work together, whether we like it or not. There is no simple, final answer to human problems - only the process of doing the best we can, both as inidviduals and as small parts of our larger world.

  • Report this Comment On September 02, 2010, at 6:46 PM, whereaminow wrote:

    AshleyQ8Fool,

    Your view of the nature and role of government has no basis in either history or present. Government is not "civilization", it is barbarism and violence.

    If you truly wish to understand why some people are selected to rule over others I can only recommend that you read Franz Oppenheimer's "The State." It is not only the only sociological work to investigate the true origins of government, Franz's conclusion - that government is merely a comparative advantage in violence within a geographic territory - is irrefutable.

    However, you won't read it. So I wish good luck and take care.

    David in Qatar

  • Report this Comment On September 03, 2010, at 12:09 PM, fransgeraedts wrote:

    Dear David,

    the serious philosophical and sociological literature about the state fills a library. The great thinkers about the state number more then a hundred. Doesnt it strike you as implausible that Franz interesting work has the sole key to the truth?

    By the way there is no serious thinker -and i mean literally: not a single one- about the state that denies that violence is both the origin and the core of the state. Maybe reading Hobbes would be an idea?

    fransgeraedts

  • Report this Comment On September 03, 2010, at 12:27 PM, IIcx wrote:

    Wow, I can't wait to read his comments about Fannie Mae and Freddie Mac but would be very surprised if he's not in favor of Nationalizing them, selling off the assets to repay the Federal loans, and then closing them down forever.

    Anything they can't sell should simply be transferred to HUD and or demolished.

  • Report this Comment On September 03, 2010, at 1:10 PM, Oldfool103 wrote:

    Build high the border wall! It's madness down there.

    Mark in Victoria

  • Report this Comment On September 03, 2010, at 1:28 PM, drobertus wrote:

    This is the most trite "interview" I've ever read. The interviewer lines up a completely leading question. There is no attempt at objectivity or challenging of assumptions. It is a pointless exercise in grandstanding. Don't waste people's time with such foolishness- just post a link to Ron Paul's site next time.

  • Report this Comment On September 03, 2010, at 2:21 PM, whereaminow wrote:

    fransgeraedts,

    I've read many of them. I wasn't raised an anarchist, you know. I went to school just like you. I went to college just like you. We all studied the same crap. Yes, I had to read muckraking garbage like The Octopus in history class. I had to read The New Republic written by the halfwit loafer from Greece. (I only half kid here.)

    But "The State" is the best book on this topic I have ever read. It's not the only one of value and I never said it was (why do so many of you insist on putting words in my mouth?) If you can find a work that exceeds this one, or even better, directly refutes his theory, I'd love to read it.

    But that means you have to read it first =D

    David in Qatar

  • Report this Comment On September 03, 2010, at 3:34 PM, sandyclaws99 wrote:

    Ron Paul is an idiot. The two largest components of the federal budget are defense spending and interest on the huge national debt (thank you Ronald Reagan and the two Bushes).

    Thirty years of Reagonomics have enriched the richest of Americans even more and shrunk the middle class and hurt the remaining middle class.

    Ron Paul is a stooge for the richest 1% of Americans and the corporate elite.

    Before you idiots go on about eliminating income taxes, learn what components make up the federal budget. Wnat to cut taxes? Eliminate the military. Don't want to eliminate the military? STFU!

  • Report this Comment On September 03, 2010, at 3:52 PM, stambushy wrote:

    Yeah AshleyQ8Fool,

    You can't disagree with David in Qatar. He has studied and fully comprehended all the work in the world investigating the true origins of government. That is how he knows that the "irrefutable" book "The State" is, "...the only sociological work to investigate the true origins of government..."

    Thank you David. Now I know that all governments are the same..."barbarism and violence."

    Also, hats off to Jennifer Schonberger for those challenging Ron Paul's position and trying to poke holes in his theories. Fox News and I are very proud of you.

  • Report this Comment On September 03, 2010, at 3:59 PM, TheDumbMoney wrote:

    This thread is hilarious.

  • Report this Comment On September 03, 2010, at 5:55 PM, 01679 wrote:

    Speaking logically, in order to get better we have to change the current system of representation since legislative and executive branches are out step. We have Internet, can communicate and discuss basic issues directly and vote on-line. Practically speaking we have to reduce role of state and federal elected bodies and move to the Swiss model with a direct participation. This way we can have tremendous flexibility and make best possible tuning of economy, social and cultural issues directly without middleman in Congress.

  • Report this Comment On September 03, 2010, at 9:04 PM, sgmorr wrote:

    As another poster pointed out, this is an extraordinarily "trite" interview. Look at the first question:

    Jennifer Schonberger: Do you think a lack of a clear policy and/or new regulation has dented the economic recovery and created a slowing economy?

    This just lets Paul take his ball and run with it. No attempt at any sort of line of inquiry to her "questions." This is beyond softball, it's powder puff.

  • Report this Comment On September 03, 2010, at 9:19 PM, whereaminow wrote:

    sandyclaws99,

    Can you be more confused? You hate Reagan but love military spending?

    Ron Paul opposed Reagan's defense spending, and split with the Republican Party over Reagan's expansion of the federal government and supply side economics. He left Congress and ran as the Libertarian Party president in 1988.

    The $$$$$ trillions of dollars spent on the military every year has done nothing but subjugate people overseas and invite a police state at home. It's a waste of money.

    5088,

    Thank you for the compliment. I'm sorry that my understanding of the origins of government contradict your fantasies of a loving mother figure. I also don't believe in Santa Claus.

    David in Qatar

  • Report this Comment On September 03, 2010, at 11:59 PM, ObscuredVision wrote:

    It is inappropriate to say that a discussion like this is inapproptiate and we should get back to talking about business. What could be more important than participating in a discussion that helps to change the environment in which business operates as we prepare for the next elections.

  • Report this Comment On September 04, 2010, at 12:25 AM, MeTwit wrote:

    What wisdom is Ron Paul talking? That the government should not be spending? Where were you guys in October and November 2008? Do you think your bank would be open today if Uncle Sam did not step into the market then? Ron Paul can talk all bs he wants to talk now, because he is only talking about someone else responsibility. If he is ever to be in charge, he will realize how damn what is spewing now is.

  • Report this Comment On September 04, 2010, at 3:45 AM, john795806 wrote:

    Ron Paul is partly correct, and partly not.

    We need stimulus spending, but not the kind that we have had. What sense did it make to give every American a few thousand dollars to spend? Did that create any wealth, either now or in the future? Tax credits for home buyers? Cash for clunkers? All expensive, and nothing to be said for them.

    What we should have done was invest in infrastructure and alternative energy. These create jobs (badly needed) and produce something for current and future generations.

    What Ron Paul touches on but does not firmly address is that we can't afford to be the world's superpower militarily. But try getting cuts in the military budget through our Congress--it just doesn't fly. Congressmen will protect the military expenditures in their constituency, at the expense of the country. But military spending doesn't create any real wealth. What have we done with all of this spending? A couple of wars that has only increased our insecurity. Absolutely huge savings can be realized--trillions of dollars just by cutting the military budget by half. We'll be a lot more secure when we mind our own business and stop acting like we can rule the world. That attitude creates resentment. People don't like American troops on their territory. Bring our soldiers home, educate them, and put them to work building up America!

  • Report this Comment On September 04, 2010, at 6:02 AM, Ophidian wrote:

    Get Ron Paul out of our lives!

  • Report this Comment On September 04, 2010, at 6:33 AM, adlib5 wrote:

    FDIC is a moral hazard. ---So after working 12 hours a day running my own little sweatshop I am suppose t6o have the resources and intelligence and knowledge to know a sound bank from an unsound bank and not put my life savings there, or make sure I divide all my eggs into different baskets so that ----yeah that will be a fun life. And if I am not so smart its really OK for smart shiesters to take my money, like they did in 1912. Koolaid bro don't dring the RP koolaid.

  • Report this Comment On September 04, 2010, at 7:11 AM, Gene33 wrote:

    I did vote for Ron Paul.

    You want a good bank? I suggest Third Federal Savings and Loan instead.

  • Report this Comment On September 04, 2010, at 3:42 PM, DrRonPaul4Prez wrote:

    It's encouraging to see this as a top rated article on this website. It's time that we get ourselves out of the mindframe of voting for the lesser of two evils, and put our full support behind a politician who is going to make things happen! And because so many people in our country are hopelessly stuck to voting for one of the two main parties, we need to get Ron Paul on the Republican ticket; we need to hit the primaries and hit it hard.

  • Report this Comment On September 05, 2010, at 3:21 PM, JPDemers wrote:

    "In a libertarian place, you and a bunch of like minded people could buy up those forest lands, protect the trees, and yet make use of YOUR property as you see fit ..."

    Dream on. On your libertarian planet, you'd be outbid by a lumber company who would clear-cut every acre they could get their hands on. If there's coal in the ground, the same rules apply: strip out every dime you can. And they'd pay the workers as little as they possibly could, stick them in company towns, and make sure they didn't make enough dough to move up and out. That's not a theory -- that's precisely what the titans of industry did, when they were free to do it. In a libertarian world, the poor are "free" to go slave away for another titan, or starve, while the rich get richer ... and richer, and richer. (Libertarians like to pretend we're all free to become titans, as if someday, nobody will have to do the work.) People needed -- and still need -- government, and regulations, to protect themselves from the plutocracy. GW Bush de-regulated his fellow plutocrats, and now we're looking at the wreckage of the American dream: 5% of the people now have 95% of the assets, and they're busy doing what plutocrats have always done: grabbing more every day. And fighting for tax breaks, because there's still another 5% out there.

  • Report this Comment On September 07, 2010, at 10:06 AM, visard wrote:

    It's stunning to me to hear people who are intelligent enough to be able to read to suggest that we should do away with all government. Can you imagine what it would be like to put 2.7 - 2.15 million federal employees out of work overnight, stop postal service, shutter all public schools, allow industry to decide what is pure food, water, and medicines, maintain the infrastructure of the country, dispose of police and regulate the armed forces by state agreement? The nightmare of a Darwinian world would be all yours - weaklings beware.

  • Report this Comment On September 07, 2010, at 1:50 PM, rfaramir wrote:

    JPDemers,

    Lumber companies that OWN their property do NOT clear cut. That is an irresponsible method of maximizing the profit of a tract of land. It is the method of those who have only TEMPORARY interest in the land (renters, leasors, poachers, thieves), to rape what they can in the time they have. Look at the modern timber industry and how it husbands the lands they own, then look at third world countries and the rape of the leased rain forest lands.

    And deregulation is the right thing, despite partial deregulation causing various problems. See California energy:

    Deregulate the supply of energy, but keep maximum price controls for consumers. Result is failing power companies as their costs rise which they cannot recover by passing to consumer. Then when they try to build their own power plants in-state, more regulation keep them from building. Result: brownouts.

    It takes a while to get your head around liberty, but we've really devolved as a nation when once we would die for it, and now we pillory those who advocate it.

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