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Ron Paul's Money Policy Would Trigger Next Depression

Unfortunately, his views are embraced by the GOP: Paul Krugman

By Matt Cantor,  Newser Staff

Posted Dec 16, 2011 11:48 AM CST

(Newser) – It seems to be Ron Paul's turn in the GOP spotlight, and while he may be a longshot to win the nomination, his views on monetary policy are representative of the party establishment—and they're highly dangerous, writes Paul Krugman in the New York Times. Paul believes in "Austrian" economics, meaning he sees money "printed without being backed by gold as the root of all economic evil." Such thinkers were sure that the Fed's figurative money-printing to shore up the economy would cause huge inflation—but three years later, it hasn't.

"You might think that having been so completely off-base about something so central to their belief system would have caused the Austrians to lose popularity, even within the GOP," Krugman writes. Instead, "hard-money doctrine and paranoia about inflation" have to come to dominate the party's economic thinking. Paul embodies this philosophy. "What will happen if that doctrine actually ends up being put into action? Great Depression, here we come." Full column here.

Republican presidential candidate Rep. Ron Paul, R-Texas, speaks during a Republican presidential debate in Sioux City, Iowa, Thursday, Dec. 15, 2011.
Republican presidential candidate Rep. Ron Paul, R-Texas, speaks during a Republican presidential debate in Sioux City, Iowa, Thursday, Dec. 15, 2011.   (AP Photo/Eric Gay, Pool)
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COMMENTS
Showing 3 of 143 comments
ppacimr9ball
Mar 1, 2012 10:29 AM CST
yup - this is one of those "were nervous" articles, so sky rockting unemployment is a good thing lol
Go_Ron_Paul_2012
Dec 20, 2011 3:29 AM CST
This is more liberal leftist propaganda and speculation to discredit Ron Paul.What I think based on the last 3 years of real time facts, spending and policies. 4 more years of Obummer has the greatest odds and will almost guarantee a  Depression. 
jgarbuz
Dec 17, 2011 8:23 AM CST
The US had many depressions before WWI. Look up the panics of 1873 and 1907. In the depression of 1907 J.P. Morgan saved the US treasury, but the aftermath of that is what led to the creation of the Federal Reserve bank in 1913 so that the US not have to depend on some single big banker coming to the rescue again. As for gold, were on the Gold Standard when all the previous depressions happened before the 1930s. IT became illegal for Amercans to own gold between 1934 and 1971 when gold was completely dropped from world trade. If someone wants gold, they can buy it. Everyone should own a little bit of it, but to believe that returning to a gold standard is some kind of answer, which is Ron Paul's major plank, is simply historically false. We had lots of depression in American history in 19th century long before the creation of the Fed and the dropping of the Gold Standard. EVeryone should look up "List of  Recessions in America" in Wikipedia to get a quick education.

 
Federal Reserve • Ron Paul • Republican Party • Paul Krugman • monetary policy • Election 2012 • Ron Paul 2012

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