“We have to stop the spending. We have to bring our budget under control. We can't raise taxes to cut the deficit. We have to cut spending. Of course, where I want to cut spending might not be where you would like to cut spending. But I want to cut spending overseas. I don’t think we can maintain our empire. And we can get control of our budget mainly for political reason as much as anything else because you can't go after healthcare here in this country and say you're gonna balance the budget.
But we have to take the pressure of the fed to create money. You know, we spend, and then we tax, and we borrow and we still don’t have enough money. So we have this ridiculous monetary system where we go to the Federal Reserve and say buy this treasury bills, and they buy the treasury bills with money out of the clear blue, out of the thin air, and this is causing the inflation. The cost of living for our retired people now is probably going up 10% a year, and they're getting cost of living increases at 2%.
This is why so many people are unhappy. We have to deal with the budget. To me, this is the most critical thing, and if we don't, we're gonna have a financial crisis, and a dollar collapse. It's gonna be a lot worse than it was in 1979, 1980, when we save the dollar with interest rates at 21%”
December 18, 2009, CNN
“We are an immoral nation, but the immorality is through our government. Bastiat (French economist Frederic Bastiat, 1801-1850) when he wrote the law, he made this very clearly, the point, he says if you and I can’t steal from our neighbors, we don’t have the moral right to ask our government to do the same thing. So it is the moral aspect of the law, and we have become an immoral nation because because we think that if you transfer wealth through the government force, that its legitimate, and it’s an entitlement, and they have a right to it.
As long as we have that, then no, there's no way you and I can agree with that, there's no way we can solve our problem. But if you feed the system and allow people to get this benefits, it perpetuate the welfare state. It never will reverse. So I say, let’s start reversing it and start cutting the spending”
December 18, 2009, CNN
“When a country, and an individual, is broke, they're supposed to quit spending money and they're supposed to pay off their bills. But the only thing we've done here in Washington, is the admission that there's a crisis going on. We've accelerated everything. We've expanded government, expanded spending, expanded borrowing, and expanded the function of the Federal Reserve, that is to create more money and credit to try and bail out the problems they created. Oh yes, we're in for a lot of trouble.
… The country is technically bankrupt and if you and I were in business, I guess we would have to declare bankruptcy. Government print money so they can get away with it. But we are insolvent, the debt will never be paid for. That's a hard thing to accept, but you can’t pay for this debt. But the debt will be liquidated, the market always liquidate debt, governments always liquidate debt by destroying the currency. They pay off their debt with bad money and that's what we're in the process of doing. We took the bad debts of the bank and we dumped it on the American taxpayers deliberately, so it’s a transfer of wealth right now.”
February 26, 2010, CNN
Paul also offered an unorthodox, yet brilliant solution to wipe of 11% of the current federal debt. He proposed that we write-off the $1.6 trillion government bonds that the Federal Reserve currently holds, instead of servicing its interest and ultimately redeeming it. Being an arm of the federal government, it would simply mean the cancelling an internal IOU – with no significant effect to the market. This would instantly give the national economy some breathing space and cancel all debt ceiling discussions for the next couple of years.
"We owe, like, $1.6 trillion because the Federal Reserve bought that debt, so we have to work hard to pay the interest to the Federal Reserve. We don't, I mean, they're nobody; why do we have to pay them off?”
June 28, 2011, CNN
Paul’s economic philosophy is shaped primarily by one of the most important figures in the Austrian school of economics, Ludwig von Mises. Paul explains,
“My introduction to Austrian economics came when I was studying medicine at Duke University and came across a copy of Hayek’s The Road to Serfdom.2 After devouring this, I was determined to read whatever I could find on what I thought was this new school of economic thought—especially the work of Mises. Although the works were magnificent, and clarified many issues for me, it was more of a revelation
to find intellectuals who could confirm what I “already knew”—that the free market is superior to a centrally planned economy. I did not know how a free market accomplished its work, and so the study of economics showed me this, and how to build a case for it. But, like many people, I did not need to be convinced of the merits of individual freedom—for me that came naturally.”
1982, Mises and Austrian Economics: A Personal View by Ron Paul
In his 2008 presidential campaign, Paul even roped in Peter Schiff, one of the country’s foremost proponent of the Austrian school of economics, to be his economic consultant.