Ron Paul: Federal Reserve is Like Drug Addiction
Mallie Jane Kim
Just like a drug high, Paul says, central banking can't last forever and ends in destruction
It's no secret that Rep. Ron Paul is no fan of the Federal Reserve, but today he likened the system to drug addiction -- something that feels good at the time but will end in destruction.
"It's a deception," he said of the central banking system this morning at an event sponsored by the libertarian CATO Institute.
"It's sort of like a drug. You get some benefits if you keep using it -- you know, run up debt, run up inflation, monetize the debt, make a bigger bubble," he explained. "Just like a drug addiction, the drug addict feels better when he keeps getting drugs."
But the high can't last forever, and like so many cases of drug addicts, "if you don't do something about it, you kill the patient," Paul said. "And right now the patient is very, very big, and that's the worldwide economy."
Go back to the gold standard, which tied the value of paper dollars to the value of gold.
Paul advocates a decentralized banking system in which states regulate fraud and abuse -- he said they do a better job than federal financial regulatory laws such as Dodd-Frank and Sarbanes-Oxley.
Paul also favors allowing private entities to issue gold and silver coins and wants to prevent federal and state governments from taxing those precious metals.
Paul reads the Constitution's requirement that "No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts" to mean the departure from the gold standard in 1933 -- and in the 1970s when ties were completely severed -- was unconstitutional.
But, he added, he wouldn't end the Federal Reserve in one day. Such a sudden change would be damaging, he said, as would letting the system collapse on its own, which he warned will happen eventually if the Fed is not reined in.
"The Federal Reserve will close themselves down eventually when they destroy money," he said. "But I don't want that to happen."
Read the latest political news.
- So the 'Super Committee' Failed. How Will That Affect You?
- Supercommittee Failure Brings Little Hope for Congress' Popularity
- Deficit Is Greatest Security Threat
- Cutting Back on Defense Spending Will Make the World Safer
- It Is Time for Discipline, Defense
- Defense Spending Not to Blame for Deficit
- Military Already Underfunded Thanks to Obama
- Cutting Defense Spending Is Short-sighted
- Reasonable Ways to Cut Defense Budget
- Cutting Military Spending Does Not Mean Cutting Defense
- Cuts to Defense Budget Might Be Inevitable But Pentagon Knows Best
- Charlie Cook Sees GOP Winning Big in 2012
- Norquist's Influence: Anti-Tax Pledge Strengthened by Campaign Spending
- Will Occupy Wall Street Survive Eviction?
- Misrepresenting Occupy Wall Street
- Occupy Your Bank
- Big Banks are Doing Just Fine, Thank You
- The Class War is So Over
- Top Democratic Governor Accuses Republicans of Neglecting Economy
- GOP Presidential Race Poised for Mud-Slinging
- Why the GOP (and Democrats) Should Be Thankful for Mitt Romney
- To Win, Newt Gingrich Needs Cash and Discipline
- 'Likeability' Unlikely to Derail Gingrich in GOP Primary
- Ron Paul: Federal Reserve is Like Drug Addiction
- Tea Party: Buyer's Remorse
- A Call for an Enlightened Foreign Policy toward Latin America
- Is the National Security Complex Too Big to Fail?
- Alabama Law Against Illegal Immigration Suffers Setback
- A Fair Tax That Really Is One
- On Harnessing the Rage
- Without Park to Sleep In Occupiers Should Change Strategies
- End of Park Occupation Raises Questions About Future
- Blame It on Brokaw
- An Idea Dysfunctional Washington More Than Happy to Let Die
- Dear Average American: It's All Your Fault
- Obama Unbound
- Romney More Savvy at Profiting Off of Layoffs and Bankruptcies
- The Corporate Pledge of Allegiance
- Wanted: Adult for President
- Newt Gingrich: The GOP's Leadership Bankruptcy
- Newt Gingrich Enjoys His 15 Minutes at the Top
- Why Newt Gingrich is Back -- for Now
- In Debates, Newt Gingrich's Real Target Is Obama
- Mitt Romney's Latest Pitch
- Herman Cain: Clearing the Knowledge Bar
- Rick Perry: The Politics of Self-Destruction
- The Coming Collision
- Rookie GOP Candidates Lead to Campaign Blunders
- GOP Debates More Entertaining than GOP Policies
- Mitt Romney Goes After Federal Employees in Fiscal Plan
- On the 'Super Committee' Menu: Social Security Cuts and Tax Hikes
- 'Super Committee' Looking Stalled
- Grim Warnings for the Deficit 'Super Committee'
Foreign Influence Inappropriate for
Lawmakers Tasked with Shrinking Deficit
- One Nation, Gone Awry
- Tax Wall Street to Heal America
- United States in Decline -- If We Allow It
Statue of Liberty Turns 125
Old Immigration Attitudes Alive as Well
- GOP's Empty Rhetoric on Obama's Immigration Record
- The Jobs Crisis is Over!
- President Obama: We Can't Wait
- John Paulson's Plaintive Plea
- Why Occupy Wall Street Needs a Republican President
Turning Point for Occupy Wall Street:
Does It Have a Political Strategy?
- Who Are These Fat-Cat Few at the Top?
- The Great Local News Heist
- Scandal in Presidential Politics
- Herman Cain Bungles Scandal Management 101
- 'Our' Blacks vs. 'Their' Blacks
- Herman Cain: Sexual Harassment Has Nothing to Do with Race
- Herman Cain's Gauntlet
- Herman Cain: Herman Agonistes
- Herman Cain's Scandal Pain
- Raising Cain
- Herman Cain: Blaming the Opposition
- Tim Pawlenty's Lost Chance
- Cutting Taxes for the Rich Never Ends Well
- Equal Taxation for Wealth and Work
- Not All Taxes Have to Hurt
- Secret of the Flat Tax
- Current Tax Code Is Confusing
- Flat Tax Would Eliminate 'Crony Capitalism'
- Flat Tax Would Introduce New Problems
- Flat Tax Unites Americans
- Flat Tax Unleashes Economic Growth
- Flat Tax Shifts Burden to the Middle Class
- Flat Tax Will Benefit Only the Rich
- Wall Street Is Back to Its Old Tricks
- The World Is Finally Fighting Off the Infection of Neoliberalism
- America Now More Pro-Civil Service Than Russia
Ron Paul: Federal Reserve is Like Drug Addiction | Politics
Copyright 2011, U.S. News & World Report