Ron Paul: American Elections

[Freshy-ZN]

The responsible borrowing of money to facilitate growth or objectives is no doubt a good thing, both on a National level and a household level but to get back to Paul's claims that the Fed is a bad way of facilitating this is really where he is unique (at least out in the open)

As I understand it his objection is the current mechanism for creating, lending, and recouping money not the fact that the US needs to borrow in principle. While he says he would love to see the end of the Fed he says the shock to the system would be too severe and proposes parallel mechanisms.

 

[empirex]

The responsible borrowing of money to facilitate growth or objectives is no doubt a good thing, both on a National level and a household level but to get back to Paul's claims that the Fed is a bad way of facilitating this is really where he is unique (at least out in the open)

As I understand it his objection is the current mechanism for creating, lending, and recouping money not the fact that the US needs to borrow in principle. While he says he would love to see the end of the Fed he says the shock to the system would be too severe and proposes parallel mechanisms.

Yeah of course, pull the Fed today and it would be disastrous. That's why you would need to implement it incrementally as Kennedy most likely would've done. The government introduces a gold / silver backed currency that runs alongside the Fed's fiat monopoly money and over time that could be phased out.

 

[Nicodeamus]

The responsible borrowing of money to facilitate growth or objectives is no doubt a good thing, both on a National level and a household level but to get back to Paul's claims that the Fed is a bad way of facilitating this is really where he is unique (at least out in the open)

As I understand it his objection is the current mechanism for creating, lending, and recouping money not the fact that the US needs to borrow in principle. While he says he would love to see the end of the Fed he says the shock to the system would be too severe and proposes parallel mechanisms.

He argued the end of the fed from the same principle as Friedman did, when times are good the Fed always credited themselves, when it went bad the fed always blamed the economy. Now it isn't impossible for the fed to implement the correct and the right policies at the right time, however if they get it wrong then the entire country feels it, in fact the entire world. If you allow competitive currencies to run against one another then some currencies will do better and some worse, however the market will determine it and access to all this debt won't be so abundant.

Then there is also the question of morality that comes into play, by printing more money to 'stimulate' the economy the theft is committing counter-theft.

 

[Nicodeamus]

It is entirely possible. But that is not the same as saying it *will* happen.
Paul has many good ideas. But people need to remember that Austrian economic theory is no more right or wrong than the other theories (Well, no one thoery has been proved 100% all of the time)

The Chicago school mostly agrees with the Austrian school, the only difference is that the Chicago school tries to use empirical models while the Austrian school uses formal logic and axiomatic reasoning.
The issue with economics is that there is a subjective factor involved, and it is obviously very difficult to model, especially on a macro scale.

 

[Nicodeamus]

People need to understand that Sovereign debt and household debt are not similar.
Remember that the USA was founded on the concept of them running massive debts, and always paying their debts.
They borrow money, which allows them to expand at a large rate, leaving the result that the repayment amount is a proportionally lower value.

There is a difference between debt where the money is wasted, and debt where it is used to continue growing the economy. The first is very bad, the second is actually a good thing.

A certain amount of debt will always be needed to grow an economy, the issue comes in when the fed tampers with the interest rates, like setting it way to low for way to long then you basically end up with companies taking out loans indefinitely and gambling them away on the real estate market, obviously knowing that they will get bailed out.