Thursday, Dec 2nd, 2010
Texas Congressman Ron Paul, active member of the Committee on Financial Services, appeared on MSNBC today and issued a stark warning to viewers regarding the continuing debt crisis: reduce the deficit now or face mass political and social chaos.
The Congressman began by acknowledging that the country is waking up to the fact that continued spending and an increasing deficit is unsustainable, but noted that this awakening has come “out of desperation” and there is still a long way to go before solutions can be put into place.
The Congressman told Morning Joe that he is “heartened” to see that the Debt Commission is considering his proposal to cut military spending.
However, Paul noted that he remains unconvinced, stating that there is a “need to change the policy, you can’t quit one weapons system and think that’s a solution if you still want to be policemen of the world.”
While making it clear that he does not see welfare spending as a long term solution, the Congressman suggested taking $10 billion that is earmarked for building more foreign embassies and bases and putting half of it into medical or unemployment benefits “to tide us over”, while using the remaining $5 billion “against the deficit.”
Earlier this week, the Congressman emphasized in a commentary piece that Congress should refuse to raise the debt ceiling, a vote that will likely take place early next year, noting that it would act as a litmus test for the new Republican controlled House.
Paul wrote that “You will know that Congress, despite the rhetoric of the midterm elections, is doing business as usual.” if they vote to raise the debt ceiling.
The Congressman elaborated on this issue in today’s interview.
“If the Fed couldn’t monetize debt and the debt limit couldn’t be increased, [Congress] would say oh my goodness, we’re going to have to change policies, maybe we shouldn’t be the policemen of the world, maybe we shouldn’t be the endless welfare state, and it will come to an end.” The Congressman said.
“And when it ends with the dollar crisis, everybody loses… then there’s political chaos. We’re not immune to that. This idea that we won’t suffer the same consequences of other nations…right now we bail out everybody!..But it all depends on trust in the dollar.” he added.
“One day people will wake up and say ‘why are we trusting this counterfeit machine.’ We’re the biggest counterfeit machine in the history of the world.”
MSNBC’s Jim Cramer re-emphasized the Congressman’s points by noting that if something is not done now to reduce the deficit, the consequences could be irreversible.
“This is too close, this is not thirty or forty years if we don’t do something, this is ten years. It’s way too close and we have got to reach some agreement.” Cramer said.
“IMF comes here if we don’t do this deficit reduction.” Cramer added. “The IMF is really pretty powerful, and you don’t want them in your country. But that’s who comes in when you can’t pay your debts.” the analyst warned.
Ron Paul added that he has spent a long time warning that we are dumping huge amounts of debt on our children and our grandchildren, but “I don’ t think that’s true anymore, it’s here, we’re in the midst of the crisis.”
Watch the full interview: