Friday, March 9, 2012
Ron Paul's does crazy on CNBC
Ron Paul was interviewed on CNBC this morning by Melissa Lee and Brian Sullivan. They gave him a total pass on his horribly flawed economic "logic."
Here are his main points and in italics I write what I would have said in response.
On the payroll gains Paul says, "I see these as blips,"
So, the jobs and income are not real to the people who have them?
"what about the person who wants to save and take care of their future? There’s no incentive there,"
For every saver there is a borrower. It's helping them.
"Why make the elderly suffer? They say that’s the price they have to pay.
Yet he is for eliminating Social Security and other social programs along with government spending almost completely. How does that help the elderly?
He would also let the market set interest rates instead of the Fed,
If the Fed/Treasury stepped out of the rate setting business, then US dollar interest rates would quickly go to zero (something he hates). The very fact that the US issues its own money necessitates reserve drains to keep rates above zero.
"When you keep interest rates at zero percent, isn't that a bit of quantitative easing?
QE is expansion of the Fed's balance sheet. Asset purchases. It's different than ZIRP.
The whole concept is wrong. There’s a lot of credit out there, but it’s being allocated by Congress. It completely distorts the market when you should be getting capital from savings and allocation of credit from the private sector.
The private sector would have no net dollar savings to lend unless the gov't runs a deficit. It therefore cannot lend, even if it wanted to. And who says it's better for it to be dictated solely by the private sector? That's his belief. It's not a fact.
"You have to get rid of the debt if you want economic growth again," he said.
They're getting rid of debt in Europe and growth is collapsing.