• This is a rush transcript from "Your World With Neil Cavuto," September 3, 2008. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: All right, well, they have got an all-star lineup at the Republican Convention tonight. You got Mitt Romney. You got Rudy Giuliani. You got Michael Huckabee, and, of course, Governor Sarah Palin. She's the coup de grace tonight.

    Video: Watch Neil Cavuto's interview

    But you don't have Ron Paul. And his phone is not ringing. It's not that he's happy or sad about it. He just had his own shindig, because they kind of turned him off here — 10,000 people strong going nuts for Paul yesterday at his Rally for the Republic.

    Now the congressman saying that the party, this party, is slighting him.

    But you got here, Congressman. So, I don't know whether you were wearing a fedora, a mask, or whatever. You got here.

    REP. RON PAUL, R-TEXAS: Well, yes. Nobody said too much to me.

    (LAUGHTER)

    CAVUTO: Yes, but did they — they obviously recognized you. Did they say anything?

    More interviews, videos and tools on 'Your World' homepage

    PAUL: Yes, I think they would just like to pretend I'm not here.

    (LAUGHTER)

    CAVUTO: Oh, really, one of these things. They just turn around, you know, yes.

    PAUL: "Why don't you go away?"

    (LAUGHTER)

    CAVUTO: So, it's not as if they avoid you, but they avoid you.

    PAUL: Yes, I do. I mean, the best way I can describe it, it's not hostility. It's like, "Let's avoid the embarrassment." And I'm not looking for an embarrassment, I will tell you.

    But I think what I talk about is really very conservative Republican principles I think we should adhere to. And for me to suggest that maybe we don't adhere to them, and we have missed our chance, if we're trouble, and our party is getting smaller, and we should have a program that appeals to young people, and I have offered this, it seems like, hey, we — how do we handle this?

    You know, he doesn't want to endorse what we're doing, and, yet, a lot of young people are coming his way. So, it's a difficult decision for them to make.

    CAVUTO: Did it ever personally bother you?

    I think they try to relegate you to the crazy uncle. You know what I'm saying? And no disrespect intended.

    (LAUGHTER)

    CAVUTO: But that they thought, "All right, he's a fringe guy," and then they saw how much money you were raising on the Internet, and how much appeal you had, and particularly with young people, and they just said, "Well, he's not so crazy, and he's not so fringe. Now what do we do?"

    PAUL: I think that's pretty well put.

    And I think that's a common practice, to take what our group talks about and say "kooks" or "fringe" or "extreme" or something like that. But isn't it unusual, or sort of weird, to say that somebody who says we ought to obey the Constitution, we ought to balance our budget, we shouldn't print money when we need it, and we should live within our means, we shouldn't double the size of the Department of Education, things that Republicans have talked about for a long time?

    CAVUTO: So, you were the one who argued a long time ago, look, you guys are the ones who have abandoned the party, not me. I'm going back to what our roots were.

    PAUL: I think so.

    CAVUTO: But now — now John McCain is trying to broaden that. And by picking Governor Palin, he's trying to reach out beyond that base.

    You argue, that's not the way to do it.

    PAUL: I don't argue against it. I argue that we need a sincere outreach. I mean, you could pick a person, but will she be able to rein him back in? Will she be able to get him to repeal Feingold — McCain- Feingold, I mean, something that our people wouldn't like? Would she be able to get him to sort of back off on the Patriot Act? Or would we be able to rein him in and say, we don't need more troops overseas; we need a more sensible defense of this country, rather than pretending we can defend the whole world, like — you know, like the program that George Bush ran on in the year 2000, you know?

    CAVUTO: Let me ask you, though, Congressman, I mean, if you had your druthers — because you know what people say about you and third parties, extended parties, Libertarians, right? They just rain on the parade of the two parties. You have heard that rap. I know you're against that.

    But do you think that there's a difference between Democrats and Republicans? And, at the margin, do you favor one over the other?

    PAUL: No.

    I'm much closer to saying there's no difference, because I look at foreign policy. There's only foreign policy, foreign policy of intervention and world empire. Monetary policy, neither ones even talk about it. Protection of private liberties here at home, Obama pretends to be better, but he isn't any better. Balanced budgets, Republicans didn't do a better job.

    So, I come up — these are the important issues for me. And there is no difference. You know, we're not going to have a change in foreign policy. They're not going to address the subject of where the financial bubbles come from and why we have housing bubble collapses. They're not going to address this, because they're not interested. And, sometimes, I don't think they even understand how bubbles form.

    So, I wouldn't expect any change in — in policy with either one. The difference is between the two vs. the other. So, many of us have come to the conclusion that the two parties have been blended together, and that the political election of presidents over the years have turned into a charade.

    I mean, just think of the conventions going on. Thirty-three million dollars of taxpayers' money to propagate, you know, this propaganda that they have, and they're not deciding on the nominee. It's already been done.

    I mean, we had a pretty nice rally here and spent several millions of dollars, but no taxpayers had to pay any money for that.

    CAVUTO: And I understand the food was fantastic.

    PAUL: Yes. Yes. Yes.