Tuesday, Jan 27th, 2009
Texas Congressman Ron Paul has warned that passing the latest proposed economic stimulus package would be akin to pouring kerosene on an already raging fire.
Paul, who is also a member of the House Financial Services Committee, warned that such measures will cause a recession to turn into a full scale depression possibly worse than that of the 1930s.
During a Television interview with CNN, Paul explained why he believes stimulus funding is such a destructive policy.
“It’s because the government is spending it. If the people were spending it it would be fine, but the government never does anything productive. They have to take money from productive individuals and spend it in non productive ways, so it’s just digging a bigger hole, getting us into bigger debt, and that is the problem.” Paul said.
“This stimulus package is going to cost each and every American $6700 of more debt, so how can that be beneficial? If debt was the answer we would of never had a problem.”
“We are doing exactly what we did in the 1930s, we are taking a recession and working very hard to try and turn it into a depression.” The Congressman added.
“What we’re worried about right now, well certainly I am, is that it’s worse than the 30’s because we’re on the verge of destroying the dollar. So if you think the financial crisis is bad, and the financial system isn’t working, wait ’til you find out when the Dollar doesn’t work.”
The Congressman told viewers that only by liquidating debt, allowing the market to operate freely and allowing prices to come down will the problem be corrected.
Paul also spoke to those who have blamed the free market for the downturn and have suggested that deregulation is a primary cause of the financial crisis.
“We never had a hands off approach, that’s the fallacy, and as long as we believe that we will never correct our problem. If you blame Capitalism and free markets and sound money for this then we can’t win the intellectual fight.” Paul urged.
“If you want to regulate, regulate Government agencies, regulate the Treasury, regulate the Federal Reserve. The Federal Reserve has no oversight, they’re not even permitted to be audited by law, so that’s the kind of oversight we need. The Federal Reserve has committed trillions of dollars to individuals, corporations and banks, they don’t even have to tell us where it’s gone to.” he added.