Federal Reserve Responsible for Recessions, Says Ron Paul
Ron Paul, the libertarian activist, is against wage and price controls and holds the Fed responsible for our economic troubles. In his latest interview, the former Congressman bluntly remarks that we don’t need the Federal Reserve to fix our economy. Ron Paul believes only free markets can rescue Americans from our economic woes under the current circumstances. (Source: “Myth-Busters! Things Are Not As Government Makes Them Seem,” Ron Paul’s YouTube channel, November 27, 2015.)
“Today, inflation is a serious problem and it’s not because the consumer price index [CPI] is going up, even though it is, much more than the government admits. It’s because it has caused so much distortion in the marketplace and there’s so much mal-investment that there has to be a correction. And controls won’t solve the problem. A lot of people from the liberal side argue that yes, we know the Fed’s involved, but we just have to have better regulation. No! The market should regulate it. We should have the money supply dictated by the marketplace and we would avoid a lot of harm and injury.
“So, there’s a lot to be said about understanding the basics of inflation, and if you did understand that you would come to the conclusion that we don’t need a Federal Reserve system. We don’t need central banks. What we need is free markets and sound money to solve the problems.”
According to Ron Paul, we’ve allowed the Fed to rule over us, giving it the power to decide our country’s economic fate. He believes that only free markets should dictate the supply of money, rather than a handful of people holding the economy’s strings.
Ron Paul suggests that the only solution to our economic troubles is to take the Federal Reserve out of the picture, allow markets to function on their own, allow property rights and let the free economy determine the equilibrium wages and prices.
“If you have this more primitive society that says, ‘Okay, here we are, we’re just under subsistence. We need some help. So we’re going to elect a board who will declare what money is, who’ll use beads or rocks or stones or pieces of paper. Then all of a sudden we’ll be rich.’ That’s what they claim they’re doing, and it makes no sense whatsoever. All it does is give people [at the Fed] power.”
“[…] If you want to be frugal and you want to save your money and protect your future [in the current economy], you don’t make any interest and prices are still going up. So, it’s the worst system that you can conceive of and then they wonder why there’s no economic growth.”
You can watch the full commentary here.
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