Posted on 01/23/2008 11:04:51 AM PST by estimator
Republican presidential hopeful Ron Paul sounds radical when he advocates the elimination of the individual income tax, a return to a gold standard, the wholesale downsizing of the federal government, and the abolition of the Internal Revenue Service and the Federal Reserve. The media and the other presidential candidates treat him as a nut. Indeed, Paul often enough opens himself up to that treatment in the flamboyant way he expresses himself. Sometimes he even seems to relish his image as a gadfly on the political fringe.
But it’s time to start taking the ten-term Texas congressman seriously. He came in second in Nevada on Saturday. He beat both Rudolph Giuliani and Fred Thompson in Michigan (he also beat Giuliani in Iowa and South Carolina and Thompson in New Hampshire). And Paul now holds the record for the most money raised — $6 million — on a single day in a primary season by any candidate in history. It would be a real mistake to think of Paul as the Dennis Kucinich of the right.
Nut or not, Paul isn’t going away. His message is combining intense opposition to the war in Iraq with a strong agenda for free-market capitalism. So it’s drawing grass-roots support from both parties. Even if it’s a bridge too far for him to capture the GOP nomination, he could mount an insurgent run for the presidency with cross-party appeal and fundraising power, probably as the nominee of the Libertarian party (on whose ticket he ran for president in 1988). He could end up shaping the coming election as H. Ross Perot did the 1992 race — denying either major-party candidate the mandate of a majority of the popular vote, and shifting the center of gravity on important issues.
For many conservatives, what makes Paul seem like a nut is his absolute opposition to the war in Iraq and his insistence on immediate withdrawal of U.S. troops from the Middle East and most of the rest of the world. On the other hand, his views on abortion are perfectly in line with mainstream conservative values (although this side of Paul never seems to get any attention).
On the economics front, Paul is a delightful paradox. If you crack the nut shell and look objectively at what Paul is really advocating, conservatives will find that Paulonomics looks an awful lot like Reaganomics. Paulonomics emerges as a refreshing return to conservative roots: small government, low taxes, deregulation, and sound money. If Paulonomics seems nutty, that may say more about the sad state of events today, with “big government conservatism” having become the new touchstone.
The core concept of Paulonomics is the reduction in the size and cost of the federal government. Irking many of today’s conservatives, Paul emphasizes how this should include scaling back what he calls American “militarism,” beginning with a pullout of Iraq.
But embracing a more classic fiscal conservatism, Paul would outright eliminate what he believes are wasteful and counterproductive federal programs, such as the departments of Education and Energy. Nutty? Most Republicans wouldn’t dare talk about eliminating the Department of Education in the age of “No Child Left Behind.” But Paul reminded me in a recent interview that it wasn’t so many election cycles ago that scrapping this department was an official plank of the GOP platform.
And if you mean it about cutting the cost of government, you’ve got to after the big-ticket items. As to the biggest-ticket items of all, Paul would decommission Social Security and Medicare by honoring obligations to those who are utterly dependent, but letting young people opt out of both systems entirely. Nutty? Let’s be honest: Most conservatives want to do exactly this, but are afraid to say so in a political environment where even mandatory personal accounts are vilified as a “risky scheme,” as Al Gore famously put it.
With all that and more gone from the federal budget, it’s not so nutty for Paul to talk about eliminating the individual income tax and the intrusive bureaucracy that administers it. Paul points out that today’s level of federal tax revenues, without the income tax, is sufficient to meet all the government’s expenses as they stood not so many years ago. The problem is that the size, scope, and cost of government has grown so much. Would it be such a nutty trade-off to roll back the clock on government expenditures if it meant eliminating income taxes for all Americans?
Paul deplores the federal deficit, but insists the only way “to solve that problem is to cut spending, not to raise taxes — or to not lower taxes when you get a chance.” As a first step he advocates the elimination of all taxes on capital — estates, capital gains, interest income, and dividends. He told me, “It’s capital that you need to make capitalism work.” He says the idea that most excites young voters is his proposal to eliminate income taxes on tips: “It’s a big deal if you’re a family struggling and if a second member of the family is working and trying to pay the bills.” Nothing nutty about any of that.
Paul may be the anti-Reagan when it comes to foreign affairs and the military. But he out-Reagans Reagan in his unwavering opposition to the government regulation of business. He may have seemed like a nut when he was one of only three congressmen to vote against the Sarbanes-Oxley Act in 2002. But weren’t the real nuts the conservative congressmen who got swept up in a witch-hunt against “corporate crooks,” and voted to impose the most sweeping, burdensome, anti-competitive, and costly financial regulation in a generation?
Paul is an advocate of free trade — to a fault. He believes deeply in unrestricted trade between people and nations. Yet he votes against free-trade agreements such as NAFTA and CAFTA because he believes that trade is a right, not a gift for Congress to bestow in certain circumstances. Without such agreements, the reality is that trade is probably less free than it is with them. Is Paul a nut for letting the perfect be the enemy of the good? Perhaps, but for Paul it’s a point of principle. He told me, “I don’t call them free-trade agreements; I call them managed trade agreements.” Instead, Paul would like to see a simple policy of “low and uniform” tariffs for all products from all nations.
Perhaps the most unusual element of Paulonomics is the idea of abolishing the Federal Reserve. For Paul, this is another way to eliminate government interference and to lower taxes — in this case to lower what he calls “the inflation tax.” Do we need the Fed to be a lender of last resort to aid in financial crises, such as the present sub-prime mess? Paul says no: “the lender of last resort is just the printer of last resort, the inflationist of last resort.”
Most politicians fall all over themselves in public adulation of the reigning Fed chairman. But Paul has had the courage to grill these unelected economic central planners when they come before his House committee. He asks the tough questions that others fear to ask, and they’re the same questions that are often asked by economic commentators on this website, including me. Most prominently, how is it the Fed continues to operate on the demonstrably false premise that rapid economic growth is, ipso facto, inflationary?
Paul, however, can be his own worst enemy on this subject when, in debates, he seems to blame all our economic challenges on inflation, or when he buys into some of the conspiracy theories that have surrounded the Fed in various forms since its inception. In a recent grilling of Ben Bernanke, Paul made an issue of the discontinuation of M3 monetary aggregate statistics, as though the Fed had done this in order to hide something. Okay, that was nutty.
But as a first step toward eliminating the Fed, Paul advocates “legalizing competition — allow gold and silver to circulate with the dollar, and take off all the taxes on gold and silver money.”
Ah, gold! The mere mention of it in today’s modern economy brands you as a nut, or at least an economic hick. But remember, American money was linked to gold in one way or another for most of our history, until 1971 in fact. In his first year in office as president, Ronald Reagan established a blue-ribbon commission to investigate a possible return to gold. It went nowhere, but was Reagan a nut to ask the question? More fundamentally, is there anything nutty about money that would be, as Paul advocates, “convertible and redeemable in something of real value”?
For all his apparent extremism, there’s no other candidate who has managed to excite both Democrat and Republican voters by combining an anti-war message that irritates conservatives with a free-market message that irritates liberals. Nutty? Or brilliant?
If I’m right and Ron Paul doesn’t just fade away as the primary season progresses, he’ll make a real difference. His anti-war message would make life difficult for Hillary Clinton, by drawing away the most pacifist elements of the Democratic base. But it’s on the economics side where I think he could make the biggest impact. In an election year in which bigger government, higher taxes, and protectionism seem to have so much momentum, Paulonomics may be just what is needed to rebalance the debate in favor of growth.
If one is a cheerleader of big government (anti) conservatism, then yes, Paul is a nut.
Paul would outright eliminate what he believes are wasteful and counterproductive federal programs, such as the departments of Education and Energy. Nutty? Most Republicans wouldn’t dare talk about eliminating the Department of Education in the age of “No Child Left Behind.”
What a nut /s
The idea that a gold-backed dollar is somehow better or less infationary than fiat money at this point in time defies all logic. Gold prices in the last forty years have been way less stable than the prices of pretty much anything else.
Previously, the Gold Standard was maintained through a fixed-by-law price of Gold, which produced all sorts of problems of its own.
The idea of gold-backed money as sound relies upon a steady price for Gold - and enough gold to meet demands for redemption. Both are a fantasy.
No kidding. For me what has turned the tide to being in Ron Paul’s favor is the fact that Thompson is out of the race AND we are willing to nominate candidates who are:
* Pro-Abortion (or at least were in recent history)
* Pro-Socialized Healthcare (or at least were in recent history)
* Anti-1st Amendment
* Pro-Amnesty
* Anti-2nd Amendment
* Pro-Nanny-State
In lieu of the Iraq war and foreign policy. Seems to me once we elect a candidate that is for socialized healthcare, and pro-nanny government, we have lost the war at home.
The war at home is more important than the war abroad folks.
That’s my new stance.
When Paul attracts so much Washington and International personal hate instead of position discussion, he must be doing something right.
Are you related to Bill? Fantasy indeed. The only thing wrong in America is we have been dumbed down to the point where we do live in a fantasy world and realization will be a bitter pill to swallow.
If the US Senate had met briefly a few days after 9-11 and declared war on Iraq (or Afghanistan), would Paul be opposed to the war? We'd have a formal declaration of War, passed exactly as the Constitution says it must be passed. All the fighting since couldn't be more in synch with the Constitution as written.
This is one of the major problems with all these "police actions" and "nation building" that has gone on in my lifetime, and I'm in my 50's. If we actually declared war, as the Constitution allows us, we'd be much better off.
For one thing, it would be perfectly legitimate to hang traitors, after a formal trial, with a finding of guilty.
I wonder if Paul or his supporters would like to weigh in on this. I like a lot of Paul's economics - much of it is just the next logical step after you do what Reagan wanted to do 30 years ago.
Anyone who advocates eliminating the Fed and going back to the gold standard is certifiably a nut and would do our economy a tremendous hurt.
Also, Paul is against the Iraq war. I’m not clear on specifics of why. How is he going to protect us from Terrorist attacks if he isn’t willing to take out the state sponsors of terrorists?
Same for me...I really thought Fred would get some momentum after SC...when he dropped out...we're left with no small government, pro-2nd Amendment, pro-life, anti-illegal immigration conservative...except Ron Paul
I think he's wrong in wanting to leave Iraq now...but maybe he was right when he opposed the invasion...an invasion supported at one time by Hillary and Edwards
And...in any event...if fear of the Islamo-terrorists forces Republicans to vote for a nanny state, pro-abortion, pro-illegal alien, anti-gun right candidate...then they've won the war...we ourselves and our fears will have sowed the seeds of our own destruction
We might need to “Let FReedom Ping” on this thread. ;^)
The Democrats have been against the gold and silver standards for over a century.
“Do not crown us with these thorns of silver! Do not hang us from this cross of gold!”
-William Jennings Bryan
Fiat currency is not only a bad idea, its unconstitutional.
I agree, what is a foreign victory if we have no more country to be proud of. Win here at home is more important now. Just joined the Paul Camp today. It is the only place I can go after Fred.
Agreed, and my understanding is that the gold standard years, were marked by periodic bouts of deflation and resulting depressions.
Until that war abroad comes home to bite you in the hiney, right?
According to Appaullonyon, then it would be our fault........
Excellent article, thanks for posting it.
Paul is against all undeclared wars as unconstitutional. He would have no problem in fighting whatever wars Congress declares, against terrorism or otherwise.
Prepare to get flamed for your correct observation.
Actually, the system we have now is about as good as it can get - we have a fiat monetary system but are (now) free to own gold if we choose to as a hedge.
Yes.
Thompson was my man and I’m as yet undecided where to throw my (admittedly limited) support.
I’ve been leaning towards Romney, mostly because of his business background. McMe, Guiliani and the Huckster all have deficiencies (IMHO) that outweigh their positives.
What has kept me away from Paul, besides the kook fringe supporters he seems to have picked up, has been his stance on the war. I’m beginning to rethink that.
Taking his foreign affairs policies in totality (pulling troops from police missions all over the globe, making trade tariffs contingent on the rates other countries offer us, pulling out of the U.N., lowering taxes) and coupling them with a responsible pullout, giving other countries the time and notice to take over, I don’t think its any more or less risky than the course we’ve been on for the last 50 years and it has real promise of making a positive change.
Example: if Europe had to start solving its own problems by defending itself, would it have the spare cash to maintain its socialist states? My feeling is no. They’d either have to change their models, or let socialism kill their countries. Would it be messy? For some countries, yes.
The Saudis have plenty of money to build a military capable of policing the middle east. Maybe they should stop spreading Islam around the globe and clean up the mess in their backyard. It isn’t going to happen as long as we’re there.
If we were drilling our own oil would we care about what happens in the ME any more than we care about what’s happening in Africa? And if so, would the Islamic terrorist be bothering us at all? The only reason they have the power to reach us is that we finance their 10th century idology with 21st century money. Left to their own devices, they’d be too busy killing each other over subtle differences in Koranic interpretation to bother us.
Any thoughts?
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