Wednesday, May 13, 2009

Ron Paul Warns Against Runaway Inflation



Congressman Ron Paul gives an interview on FoxBusiness earlier this week, warning against the dangers of runaway inflation and criticizing the policies of the Obama Administration and Federal Reserve Chairman Ben Bernanke.

Curiously, at 1:18 he says that it's a good thing (or at least it seems from the video- the most reasonable thing) for the U.S. government to pay off its astronomical debt through inflating the money supply. Huh? I thought he was against that. And he does immediately seem to contradict himself a moment later by saying how bad inflation is and how much better it would be to cut spending and simply pay off our debt with revenues.

Can someone help me figure this out? Any big Ron Paul fans/apologists who might have an insight into what he meant? Was that a slip up when he said it's a "good thing" for government to liquidate debt by printing money? Or did he mean it and have some solid, though somewhat sophisticated reasoning behind it? Or is he just plain wrong and confused here? Thoughts anybody?

I am a pretty big Ron Paul fan myself, so I'd kind of like to figure this out. Puzzling.

4 comments:

Greg said...

I am not real sure what he meant. He used the word "liquidate", but I am not sure he intended that to mean starting up the printing press.

W. E. Messamore said...

Well... at the interviewer's prompting, he seems to clarify that by "liquidation," he means paying off our debts by printing money.

Daryl said...

Dr. Paul is talking about our obligation to pay our foreign debt; we have to pay our bills. When things get so out of hand (and boy is it out of hand!), we have to do what is a very bad thing—pay off our debt by hurting our currency. This is not what happens in a system of sound money, but it does in a command economy with floating currency. In order to pay the bills we have to kill our currency. It is in evitable and is with great precedent. Will paying our foreign debt hurt us here at home and inflate our money even more? Yes. But after we do it we can refocus our currency and our spending. It will be painful, but so is necessary amputation.

We can’t steal from others in order to maintain stability in our own currency; we made a deal when we borrowed and we can’t just default. What is sad is that we have put ourselves in this shape. It is unconstitutional, immoral, and fiscal stupid.

Btw, for any interested I have started a blog at www.indefenseoftheconstitution.blogspot.com for all you constitutionalists/libertarians/classic liberals/true conservatives out there.

W. E. Messamore said...

So I'm like a week late responding to this... but thanks for the explanation. I guess there's just no way around the fact that this sucks. There's no such thing as a free lunch.

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