Ron Paul: Foreign aid leads to 'more trouble, more debt'

Republican lawmaker wants to end flow of US dollars overseas

This is a rush transcript from "Your World," September 20, 2012. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF "YOUR WORLD": Hill on the Hill, and now there will be hell.

Welcome, everyone. I'm Neil Cavuto, and Fox on top of a secretary of state with a tin cup out and not too many politicians willing to throw any coins in.

Hillary Clinton lobbying Congress today to keep the money flowing to the Middle East. But she is facing huge resistance from Republicans and a whole lot of Democrats who say they've had it with pouring good money after bad in the Middle East. Images like these certainly do not help, do they?

To Ron Paul, who says long before this close the spigot and close it now.

Congressman, good to have you.

REP. RON PAUL, R-TEXAS: Thank you, Neil. Good to be with you.

CAVUTO: There are many more in your camp. And I'm wondering, having heard this before, when there's a dust-up of violence -- and certainly this is quite a dust-up -- but it fades. In other words, the resistance to lending money fades. And we go back to lending money.

PAUL: We got cut off.

CAVUTO: Can you hear me, congressman?

PAUL: No, we -- I lost that last sentence or two.

CAVUTO: Oh.

Well, this idea that as opposed as many are in Congress to giving more money to the Middle East, in the end, they come around and do so. What do you make of that?

PAUL: Yes. Yes.

They've been doing that for a long time. They'll probably do it again. But the people are waking up and they are not putting up with it so easily. But there is a bit of a truth to this argument that foreign aid is small compared to a lot of other expenditures. But the principle, it's the easiest one to attack, and it represents intervention overseas that is unnecessary and eventually leads to trouble, so it's a good target.

I hope it does some good, but quite frankly I think they will capitulate and they'll give all the foreign aid, try to buy friends. And yet I think it leads to no more than more trouble and more debt and the principle of us trying to influence the world and own the world and change the world by producing money, printing money and sending it over there, it's failing. We ought to give up on it.

CAVUTO: Now, the argument doing that by the likes of John McCain and others, who have talked to me, including Eric Cantor, who we're going talk to a little bit later, show some of that interview, is you can't not give money. You can't just divorce yourself from this region.

What do you say to that?

PAUL: Well, I say, why not?

It's going to happen if we run out of money, or people do not trust us and we have a currency crisis. It is going to end. But they have to realize it doesn't do any good. What good was that $40 billion or so that we gave to Mubarak in Egypt? It finally fell apart and there's chaos there now.

I would say it was a bad investment from the beginning. They say, well, we have to do this for Israel. But Israel is worse off when these things end. And they might argue in the short run, well, if we don't prop up these governments, you know it's going to be harmful to all our policies in the Middle East.

But it is going to end. It causes the turmoil. It causes the overthrow of these governments. And we cannot always control the people who take over it. We bought the government under Mubarak and now there is a new government, whether it's Libya or Egypt or what it might be like in Syria later on, it will be the Al Qaeda that will take over, so we don't benefit, Israel doesn't benefit, the taxpayer doesn't benefit.

It's a foolish policy. And it will come to an end. The sooner, the better.

CAVUTO: All right. Then the argument you hear, congressman, is that we step out, China steps in, Russia steps in, all to our detriment, all to embolden Iran and to embolden sinister moves toward us.

PAUL: I think they're smarter than that. They probably won't do it. But if they do, I think the Soviets and the Russians had their fill of it when they were in Afghanistan.

They were stung badly. They wised up and left and went through the disintegration of their empire. China doesn't have a history of doing this. They're more like capitalists. They actually sell us stuff, save money, invest in Iran and invest in these countries. So, they do not have the same characteristics that we have had for 100 years of putting troops overseas and occupying countries and picking and choosing dictators.

I think it's a possibility, but unlikely. And if it did, it would fail to them. If it's failing for us, it would fail for them as well. But I would let them have the burden and the problems and the complications rather than have the American people suffer from the consequences.

CAVUTO: Do you think in the end, congressman, they just hate us? That some of these extremists -- we had and have a president who has tried a more moderating approach to reach out to the Muslim world after a president who did not, this president says.

And no matter how you slice it and no matter the administration, invariably the same we hate you America response. What do you make of it?

PAUL: Yes, I think, actually, we on the Republican side have lost some ground because we have been overly aggressive with our presence over there.

And Obama, who do I not believe or a minute anywhere approaches my position of non-aggressiveness and non-occupation, but he's taken a different tone. He's going to benefit from this politically as not being a bomb thrower.

But I don't -- my position generally has been that in the very many years that I've been here in Washington that policies, and especially foreign policy, it really never changes from party to party. There's a general endorsement of us being involved.

And it's been going on for a long, long time. And I've been working hard to try and change this attitude and try to have a much more pro-American foreign policy and deal with our budget deficit and convince people that it's not in our national self-interest to have this position that we try to dictate to the world who their leaders should be and who the dictators should we and that we can buy our friends. I don't believe it is possible.

CAVUTO: And there is the little detail, as you have reminded me, we do not have the money to buy off anyway, but that is a separate issue.

Ron Paul, thank you very much.

PAUL: Thank you, Neil.

CAVUTO: All right.

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