Sen. Rand Paul (R-KY) is talking about America’s debt crisis, telling Breitbart News Daily that if he’s elected President, he will do everything in his power to prevent the debt ceiling from being raised again.
Paul blamed big-spending politicians of both Left and Right for accumulating a debt that former GAO chief Dave Walker argues is over three times larger than the $18 trillion official figure.
Paul described the Federal Reserve as an indispensable accessory to debt crime, setting artificially low interest rates that make it possible for politicians in Washington to spend vast amounts of money they don’t have, without the public growing outraged over mounting debt interest costs.
The true cost of borrowing all that money is hidden by what amounts to a government conspiracy against taxpayers – an “unholy alliance,” as Paul puts it. When interest rates inevitably spring back to realistic levels, and the cost of debt service increases dramatically overnight, it will come as a horrifying shock to voters… but it will be far too late for them to do anything about it.
“Because we have this enormous debt, the Federal Reserve has to accommodate it, and they do it by having low interest rates,” Paul explained. “So imagine you have this enormous debt – whether it’s $18 trillion, or $65 trillion, or over $100 trillion, there are a lot of different ways to measure it – imagine if interest rates go to five, or six, or ten… I remember getting out of high school, and they were 18 percent, back in the early 1980s.”
This means the Federal Reserve is working “hand in glove” with deficit spenders. “You can’t have a big debt without the Fed,” Paul said.
He warned there were consequences to the free market from the monetary policies that grease the skids for titanic federal debt accumulation, including the distortion and exacerbation of income inequality. “If you look at who’s at the Fed, and where they go, they go from the Fed, to Treasury, back to Wall Street again,” Paul observed. “It’s a revolving door.”
He found it especially galling that the Federal Reserve is lobbying against transparency regulations, saying this was one reason he is determined to audit the Fed, and has also introduced a bill to ban them from lobbying. “I don’t think they should be able to use the power Congress gave them to lobby Congress against transparency. That’s ridiculous,” said Paul.
If elected President, Paul promised his first move would be to “quit the bleeding” by preventing the government from accumulating any more debt. He said there is no question he would have vetoed the latest debt-ceiling deal to pass through Congress. “If your kid is two thousand dollars in debt, you don’t give them more credit on their credit cards. You tell them they’ve got to pay their bills, and you cut up the credit card,” he said. “It is crazy what we’re doing here.”
And by “we,” he unfortunately means both Republican and Democrat big spenders, the “unholy alliance” that agrees to endless debt-ceiling increases so the conflicting priorities of Right and Left can both enjoy lavish funding. Military spending for the Right, plus welfare spending for the Left, combine to form a “guns and butter” spending policy, making a mockery of the old principle that politicians must choose between funding guns or butter.
“The debt gets worse under Republican presidents, and it gets even worse under Democrats. We doubled the debt under Bush, and we’re doubling it again under Obama,” lamented Paul. He expressed skepticism that a military funded by unrestrained deficit spending was truly a long-term national security asset, given the danger that fiscal collapse could leave a future generation unable to finance operations for the military its predecessors built.
Senator Paul also offered criticism of the Trans-Pacific Partnership trade bill, which he thought surrendered too much legislative power to the executive, and was passed using dubious legislative tactics, including keeping the details classified for much too long.
“There is some question about whether it’s constitutional to give up sovereignty,” he pointed out. “Can the legislature give up their own sovereignty to an international organization?”
He said that while he has supported trade deals in the past, based on his belief in the benefits of free trade, this bill was far too large for him to support without reservation. He vowed to read every single word of the titanic agreement with the assistance of his staff. (If he’s planning to read a hard copy, he will need assistance from his staff to lift it.)
Paul concluded his appearance with a few words about his presidential economic proposals, which he bases on the principle that “people need to be left alone in their economic lives… we need to leave more money in the private sector.”
To that end, he proposes both tax simplification and a significant tax cut, unlike rival plans that merely “shuffle around the taxes.” He proposes a single tax rate, 14.5 percent for both businesses and individuals, coupled with the end of payroll taxes,” which means all of the working class would get a tax cut also.”
Paul believes himself to be the only true fiscal conservative on the debate stage, because he’s the only candidate willing to hold the line against all spending.