Ron Paul Sounds Off on Economic Mess

This is a rush transcript from "Glenn Beck," January 21, 2009. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: You know, I am just like you, man. I watch the news and I see it, I'm like, wait a minute, that's not a separate story. These stories are all connected. The media never puts them together like a puzzle but that's really what the news is.

Let's put some together. First, the housing market collapses because banks are forced to make loans of people who can't pay them back.

Next, the bailout bonanza. We just keep on giving money, with no results.

Next, where is that money coming from? Oh, yes, we're printing it in the basement and devaluing our currency.

And finally, we're starting to nationalize our banks. This is pretty good. Bank of America literally will become Bank of America, which is great, because we can some save money. We don't have to save money on new signs.

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This all forms a big puzzle. Here it is: The government is to blame for each and every one of these pieces. President Obama — is he Bush on steroids and how long is this going to last before somebody says, "OK, this isn't making any sense to me anymore"?

Republican congressman and former presidential candidate Ron Paul is joining us now. Hello, Congressman. How are you?


BECK: You know, the more I read of the Founding Fathers and the more I read your words, they are almost interchangeable.

Let me start with the words of Thomas Jefferson. Here it is, "I sincerely believe that banking establishments are more dangerous than standing armies, and the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale."

I wanted to get you on because I don't know if "futurity" is a real word. Any idea? No?

PAUL: No, I'm not positive.

BECK: OK. Anyway, Thomas Jefferson is basically saying the banks stealing from our children and funding us is a really bad thing. And the banks are a really bad thing when we get into bed with them, and that's exactly what we're doing.

You have been crying out in the wilderness for a long time and people haven't really been listening to you. And you know what, congressman? I don't know if they're listening to you yet. What is it going to take?

PAUL: I think it is going to take a collapse of the dollar, because there is no intent here in Washington to change its ways. We're spending more, borrowing more and printing more, and that's why we're in the trouble we're in.

So since we're not going to do that, all the burden is placed on the value of the dollar. You can't create trillions and trillions of dollars and think we can bailout all the bad investments. And yet, that's all we seem to be doing here, and it is sort of contagious.

You know, we have appropriated money to bail out so many big companies and big banks are rating. It is the excuse for coming back and nobody can deny that. Now, you can say, "Well, so and so needs money," and they're logical. They say, "Well, if you bailed out the big banks and AIG and all these companies, why not bail out the little guy?"

So the bailout is a disease. It's contagious. It's ongoing, and the result of this will be the destruction of the dollar, which, to me, means runaway inflation and political chaos. It is very, very dangerous.

BECK: OK. Hang on, because you're saying runaway inflation. You're meaning Weimar Republic, wheelbarrow full of money kind of stuff to buy a loaf of bread. Is that the kind of inflation you're talking about?

PAUL: I think it will end before it gets that far along. They will come to their senses but it is going to be bad. But everybody is lulled to sleep and saying, "Well, there is no inflation."

But if you measure inflation by the increase in supply of money - I mean, we're doing it. So the inflation is already here. The effects have yet to be known.

BECK: Right. I talked to Stephen Moore of the "Wall Street Journal" and he talked to the Treasury. It looks like we have increased the money supply by 70 percent since October. They have been running the presses 24 hours a day.

The effects of this, you're saying, will destroy the currency. So then what happens? What do we replace it with? Or what — I mean, that sounds crazy, Congressman.

PAUL: Well, you will have to start over again with a new system. And history shows you that you have to go to sound currency that the people will believe in and have trust in. Right now, the trust in the system, which is the financial system - that trust is gone. That is why it has seized up and doesn't work.

The dollar is still accepted and they're relying on the trust of the dollar, but I believe that will come to an end.

BECK: You know, Congressman, there is one group of stories that I don't see covered in the media at all. And we're looking into it, and that is all these countries are allies. We have France. We have England. We have Germany. They just met two weeks ago over in France where they talked about a new sort of capitalism where government has the role at the table.

Also, they're all talking about some sort of a new currency that there needs to be a new gold standard, which, unfortunately for us, the dollar is the world's gold standard.

I don't see any coverage of this anywhere, and it seems to me that that would be kind of an important story for the American people to know about. Can you give me any update on this? Are you are following this story?

PAUL: No. They deny this information that information to us. As a matter of fact, the other day when Bernanke was before the banking committee, I complained about — that he didn't show up. But he was in Basel, Switzerland meeting with all the other central bankers talking exactly about what you are talking about.

But under the law, they are not required to tell us anything. That is why I'm working so hard to try to get transparency of the Federal Reserve. The responsibility falls on the Congress.

BECK: Real quick, just two quick questions — Hillary Clinton as the secretary of treasury, any comment on that? Or secretary of state —

PAUL: State?

BECK: Yes.

PAUL: I think policy is going to remain the same. I think foreign policy is dictated by individuals who control both the Republican and the Democrat Party, so don't expect any significant change in foreign policy.

BECK: OK. And the secretary of treasury, Geithner, should he be the guy or not?

PAUL: Well, no, I don't think so. I mean, we just gave him $350 billion and he doesn't know what he did with it exactly.

BECK: Is he going to be —

PAUL: It was mismanagement. So we're going to give him another $350 billion? I suspect that he will be approved.

BECK: OK. Thank you very much. Congressman, we will talk to you again.

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