• With: Sen. Rand Paul, R-Ky.

    This is a rush transcript from "Your World," May 8, 2012. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF "YOUR WORLD": Meanwhile, in the wake of that austerity revolt in France and Greece, a growing number of U.S. lawmakers are saying this is no time for austerity here. They're pushing for more spending, citing the fragile economy that needs it.

    Kentucky Republican Senator Rand Paul says, no, the economy does not need it; in fact, that's going to make things worse.

    Senator, good to have you.

    SEN. RAND PAUL, R-KY.: Good to be with you, Neil.

    CAVUTO: What do you make of that argument, that austerity didn't cut it, so, cut the austerity?

    PAUL: Well, you know, you've people like Paul Krugman, who still think Lord Keynes knew what he was talking about. But many of us don't think it's a good idea for government to go farther in debt.

    CAVUTO: We should preference you're referring to the New York Times economic...

    PAUL: Yes.

    CAVUTO: ... columnist Paul Krugman. Go ahead.

    PAUL: Yes.

    Well, he seems to think deficits don't matter and that we ought to pile on more deficits in the middle of a recession. And he thinks the worst thing we could do is actually to be austere or cut spending.

    You have to realize that austerity in Washington means cutting the rate of growth of spending. Nobody around here, other than myself and a few people, would actually cut real spending, which is what we ought to do.

    CAVUTO: But do you think that they're concerned -- or that some of your colleagues are concerned that voters have swung the other way, using France as an example, maybe Greece as an example -- not that they’re necessarily indicative of our mood -- but they've had it with even cutting the growth in entitlements, and they've had it with that, and they don't want to buck that trend?

    PAUL: No.

    I think, in Kentucky, anyway, I have not seen the French elections influencing our voters too much.

    (LAUGHTER)

    PAUL: But I would say that we haven’t even begun to do any of -- austerity or change anything. But when you poll the public and you ask them, would you be willing to let the age of Social Security rise or means- test the benefits, it’s over 50 percent of the people know we’re going to have to do something like that in order to save Social Security and save Medicare.

    CAVUTO: So why do so few of your colleagues do that? I mean, I give you credit. You go out on a limb and propose $1 trillion in spending cuts, and dramatic cuts at that, but a lot of your colleagues kind of leave you on a vine.

    PAUL: But it's kind of funny here, because I think they misunderstand the public.

    For example, we spend $30 billion a year in foreign aid around the world. If you ask the public, 75 percent of the public thinks we need to start paying attention to our country and less attention to giving welfare overseas. But when I bring up a vote to cut any -- any foreign aid, 80 percent of the legislators vote against me.

    So I think they misinterpret the public, but they’re also missing out on the vote, because I'm going to keep hammering them on this, that we can't send $2 billion a year to Egypt, a country that holds our citizens in detention, and asks to prosecute them and asks for international warrants. I don’t think that the American public is in favor of that.

    So we'll keep fighting those fights. But I think eventually Congress will change to reflect what the people really want.

    CAVUTO: Foreign aid might be one thing. I'm just wondering, when it comes to entitlement programs, Medicare, Social Security, Senator, that Americans are fine in the aggregate, saying, yes, you should rein in the growth of these, but you better not touch mine. What do you make of that?

    PAUL: Well, it depends on how you ask the people.

    If you ask people, do you want your Medicare to be cut, 80 percent of people say no. But if you ask those on Medicare, or those approaching Medicare, do you think we need to do something to save the system, and if that meant letting the age rise gradually, would you allow that, I think most senior citizens actually would.

    And actually most of the reforms are on the next wave. They’re on me and you, Neil. They’re not on the current retirees. So, I think people are willing to accept it. Most young people, when you talk to them, they don’t think Social Security will even be there for them, so they’re more than willing to accept some of these changes.

    CAVUTO: What do you mean they’re on me and you?

    (LAUGHTER)

    CAVUTO: But I digress.

    Could I ask you about your dad, if you don't mind my departing...?

    PAUL: Sure.

    CAVUTO: He is the last, sole survivor in the race. He's not quitting. He’s indicated of late that he's not really all that keen on a President Romney.

    He's acknowledged that the numbers favor him getting the nomination, but is there some bad blood there? Or what is going on?

    PAUL: No, I don't think so.

    I think my dad is who he has always been and he has not changed and that's to his credit. And I think that is why people see him as genuine and authentic. I don’t what he will do as far as endorsement goes. I know that he wants to grow the Republican Party and that Republicans need to understand that he's the only one out there on the trail that is getting 8,000 students to show up in a place like Berkeley, U.C. Davis, University of Pittsburgh, Champaign, Illinois. Thousands of people are showing up to see a guy and hear a guy who isn’t going to win the nomination.

    But there's something out there.

    CAVUTO: But is he going to try for another nomination? Gary Johnson, the former New Mexico governor, got the Libertarian nod. Talk was that they originally wanted your father, and he pooh-poohed it. Is that true?

    PAUL: I don't know the particulars of that.