Republican Congressman and presidential candidate Ron Paul tells Newsmax he will vote against any attempt to raise the debt ceiling and says a proposal to allow the president to raise the ceiling is “capitulating” in the debt debate.
The Texas lawmaker also warns that continuing to run up the federal debt will eventually lead to a “dollar crisis,” while insisting that a tax increase will be very bad next year for Republicans who support it.
But he acknowledges that Washington lawmakers will most likely agree to raise the debt ceiling after they agree on some spending-cut promises “that people will fall into the trap of believing.”
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Rep. Paul has served 12 terms in Congress and is chairman of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology. He previously ran for president in 1988 and 2008, and on Tuesday announced he will retire from Congress when his current term runs out and will focus on his presidential campaign.
In an exclusive interview with Newsmax.TV, Paul was asked what brought him to the decision to retire.
“One of the major reasons was I didn’t want to run for two offices and one time,” he explains.
“I didn’t want two campaigns. I did that before and I think it deserved some criticism. So I decided that I’m going to concentrate on the presidential race.
“The campaign is going very well. People are listening to my noninterventionist foreign policy, listening to my views on the Federal Reserve.
“I’m also at a point where I’m not that anxious to stay in the Congress right at this moment.”
Mitch McConnell, leader of the Senate Republicans, has proposed giving President Barack Obama the power to unilaterally raise the debt ceiling because the consequences of failing to raise it are too great.
Asked if that constitutes capitulating or is a good idea, Paul responds: “We are capitulating. I think it’s terrible. It should be Congress’ responsibility” and Congress should not give “this authority to the president to raise the debt limit.
“So far everybody I’ve talked to has been annoyed by it, mostly the conservatives. I don’t think it’s going to work. I do think, however, that somehow or other they will raise the debt limit by making some promises that people will fall into the trap of believing.”
Paul said he would vote against McConnell’s proposal “and any effort to raise the debt limit, because that’s been the problem. We just permit the Congress to spend and never do what they have to do, and that is cut back.”
The solution to the debt crisis, he adds, “to cut spending, an across-the-board cut. Pretend it’s not much of a problem and keep raising the debt limit and keep spending and keep running up the debt, eventually it’s going to end very badly, and that is with a dollar crisis. I’m afraid we’re going to end up with that instead of coming to our senses and cutting back, because politically it’s so difficult.”
The federal government, he adds, is already “destroying the value of the dollar.”
Paul says President Obama’s warning that seniors on Social Security could suffer if the debt ceiling is not raised by August 2 is merely a “scare tactic. I think what Social Security has on hand can last quite a while. They’re not going to stop sending the checks out. The cash is there to take care of a good many months.”
Paul discussed the possible fallout in next year’s elections if Republicans do agree to only modest spending cuts and perhaps even to a tax increase.
“If it involves tax increases it would be very, very bad for the Republicans and those who supported it,” he tells Newsmax.
“I think it depends on the economy, and the economy’s getting weaker. No matter what we do the people are going to be pretty upset.
“But right now all we’re dealing with in Washington is the blame game. Who’s at fault. Is it all Obama’s fault or is it something Republicans did in the past?
“I think it’s what Republicans and Democrats and many many administrations have done for a good many years — accepting the principles of central economic planning and a monetary system that encourages this type of behavior, as well as a foreign policy that gets us involved in these wars constantly. And they never seem to end.
“That’s what the real problem is, and until we change that attitude I don’t see how we can get a handle on what’s happening.”
Federal Reserve Chairman Ben Bernanke said Wednesday morning that the Fed stands ready to respond with more stimulus if needed. Commenting on the announcement, Paul says: “Same old. It’s his only tool. In a weak economy you print money, you run up debt, you try to get people to spend money, which is the exact opposite of what we need.
“Eventually printing all this money will get people to quit buying our debt.”
Paul also tells Newsmax: “If we were serious here in Washington and wanted to live within the budget rules and the debt limit, we could do that, and hopefully within a year we’d solve our problems.
“But I’m not much of an optimist.”
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