WEBVTT NOTE A Monetary Policy for a Free America 1 00:00:00.000 --> 00:00:04.880 I've been very pleased about what's happening in the country in general. 2 00:00:04.880 --> 00:00:07.200 I think there's been some definite improvements. 3 00:00:07.200 --> 00:00:12.700 I think that over the last several decades that we've seen a tremendous improvement. 4 00:00:12.700 --> 00:00:19.760 There have been organizations around, quite a few, the Mises Institute being one of the 5 00:00:19.760 --> 00:00:24.400 top organizations that have changed what's happened in the last decade or two, and that 6 00:00:24.400 --> 00:00:27.760 is there's been a revival of these ideas. 7 00:00:27.760 --> 00:00:31.200 They really have lain dormant for quite a while. 8 00:00:31.200 --> 00:00:36.560 I think that we really haven't had a full discussion of the principles of liberty since 9 00:00:36.560 --> 00:00:42.120 the Constitutional Convention, or with our revolution, actually with the revolution, 10 00:00:42.120 --> 00:00:47.320 where there was the rejection of the king and the nonsense and the courting of troops 11 00:00:47.320 --> 00:00:50.600 and the militarism and the violations of civil liberties. 12 00:00:50.600 --> 00:00:55.120 And our founders did have a discussion and came up with some pretty sound answers and 13 00:00:55.120 --> 00:01:01.120 and the Constitution. 14 00:01:01.120 --> 00:01:02.800 But today I think that's occurring again. 15 00:01:02.800 --> 00:01:10.520 I think it's moving quicker and this debate once again will be climatic in a sense in 16 00:01:10.520 --> 00:01:15.160 this decade mainly because of what is occurring economically and the problems that we're facing 17 00:01:15.160 --> 00:01:18.200 and this is indeed related to the monetary issue. 18 00:01:18.200 --> 00:01:23.680 The monetary issue might not be the issue, but it's very symbolic of the big issue and 19 00:01:23.680 --> 00:01:29.680 and the big issue is individual liberty and the size of government and the role and purpose of government. 20 00:01:29.680 --> 00:01:36.680 I was rather pleased even yesterday with the announcement of Steve Forbes' entry into the Republican race. 21 00:01:36.680 --> 00:01:40.680 I guess maybe because the race so far has been pretty boring. 22 00:01:40.680 --> 00:01:44.680 It hasn't been too exciting, you'd think, with 11 or 12 people running. 23 00:01:44.680 --> 00:01:47.680 And I wasn't looking for the excitement that Colin Powell might give us. 24 00:01:47.680 --> 00:01:52.680 So I was very pleased with the Steve Forbes announcement. 25 00:01:52.680 --> 00:01:59.360 Management, mainly because there was an expression of an opinion about the monetary issue. 26 00:01:59.360 --> 00:02:03.320 I mean, I've worked with and I'm friends with Pat Buchanan and I like a lot of things 27 00:02:03.320 --> 00:02:07.280 he says, but he says quite frankly, I really don't understand the money issue, I don't 28 00:02:07.280 --> 00:02:11.480 want to get involved with that, I don't want to address the Federal Reserve and yet I believe 29 00:02:11.480 --> 00:02:15.960 he is patriotic enough that he is not sold out to the internationalists because he's 30 00:02:15.960 --> 00:02:20.480 already been willing to challenge the internationalists when it comes to, you know, the trade issues 31 00:02:20.480 --> 00:02:25.980 and the different things United Nations. So it is in that, but he doesn't have an interest. 32 00:02:25.980 --> 00:02:31.980 Now, while I see this as a very nice opportunity, if somebody is willing to spend 25 million dollars of his own money 33 00:02:31.980 --> 00:02:35.980 in saying that he believes in the gold standard, it can't hurt us. 34 00:02:35.980 --> 00:02:43.480 You know, it at least allows us some credibility because I know what it's like to be up there talking about the gold standard in Washington 35 00:02:43.480 --> 00:02:47.980 and everybody looking at me and saying, hey, what kind of a nut is he? 36 00:02:47.980 --> 00:02:53.980 Well, he's one of those nuts that has read the Constitution and believes in it, but that's beside the point. 37 00:02:53.980 --> 00:03:00.980 But I think with Forbes running and talking about the gold standard, it could be of a big benefit to us. 38 00:03:00.980 --> 00:03:08.980 He happens to be what we call a supply sider. He's probably much closer to Jack Kemp when it comes to the gold standard, 39 00:03:08.980 --> 00:03:16.980 which in a way is a pseudo gold standard, and it's not very rigid, and I don't think it mandates the elimination of the Federal Reserve 40 00:03:16.980 --> 00:03:46.980 and a few other shortcomings like that but at least it gives the emphasis that money should be related to gold and then we can at least talk about the real gold standard versus the fake gold standard but even a little bit of gold is going to be a lot better than what we have now and the consequence of the paper standard that we've had now since 1971 is very clear the results aren't very good and all we'd have to do is look at 41 00:03:46.980 --> 00:03:52.220 this past week or two on how quickly the value of the dollar can change in relationship to 42 00:03:52.220 --> 00:03:53.220 other currencies. 43 00:03:53.220 --> 00:03:57.340 I mean, this is some type of a currency market that we've had going on. 44 00:03:57.340 --> 00:04:01.380 As a matter of fact, this whole year has been very interesting. 45 00:04:01.380 --> 00:04:05.620 We've had a dollar that was worth around a hundred yen, it goes down to eighty for a 46 00:04:05.620 --> 00:04:10.620 while, it bops up again to a hundred and five yen and now down to a hundred yen. 47 00:04:10.620 --> 00:04:12.500 Those are big moves. 48 00:04:12.500 --> 00:04:16.780 Somebody was telling me not too long ago, he said, you're one of those gold nuts. 49 00:04:16.780 --> 00:04:19.340 Well, I don't know about that, but I believe in gold. 50 00:04:19.340 --> 00:04:21.340 He says, but gold is so unstable. 51 00:04:21.340 --> 00:04:23.660 Gold, I says, now listen to me. 52 00:04:23.660 --> 00:04:25.740 I says, take a look at what this dollar does. 53 00:04:25.740 --> 00:04:28.140 Unfortunately, gold is way too stable for me. 54 00:04:28.140 --> 00:04:31.580 It's been between 390 and 400 for a year and a half. 55 00:04:32.300 --> 00:04:33.420 So it's been steady. 56 00:04:33.420 --> 00:04:36.780 The gold price in terms of dollars has been relatively stable. 57 00:04:36.780 --> 00:04:39.100 Not a good analogy, but for him it was, 58 00:04:39.100 --> 00:04:43.660 because the dollar yen and dollar mark ratio, there's nothing stable. 59 00:04:43.660 --> 00:04:51.160 Can you imagine calculating international trade transactions with a unit of account that jumps around like that? 60 00:04:51.160 --> 00:05:00.660 I sometimes think it must be like a builder that would have to build a house with a yardstick that was 39 inches and 34 inches and 36 inches, depending on the day. 61 00:05:00.660 --> 00:05:03.160 I mean, what kind of a house would you have at the end of the day? 62 00:05:03.160 --> 00:05:10.660 And that's why we have a hodgepodge economy, is because the unit of account has no definition and is totally unstable. 63 00:05:10.660 --> 00:05:19.160 and we end up with some messy type of trade imbalances and debt and a lot of other problems. 64 00:05:19.160 --> 00:05:28.660 So it is very clear to me and I hope to others that this type of monetary system cannot and will not continue. 65 00:05:28.660 --> 00:05:34.660 For that reason, I'm very excited about what's happening in a morbid sense of it, 66 00:05:34.660 --> 00:05:38.160 because it's not going to last and something's going to happen. 67 00:05:38.160 --> 00:05:47.160 The danger is, of course, is sometimes when a monetary system breaks down, you don't end up with what you need and what you want, and that is more freedom and a better currency. 68 00:05:47.160 --> 00:05:57.160 But because the Mises Institute is doing such a good job in educating so many young people, and we have a new generation coming up here that's going to know what to do, we don't have to really worry. 69 00:05:57.160 --> 00:06:06.160 We just have to help the Mises Institute a little bit more, make sure we get more kids and young people educated so that we can make this replacement rather painless. 70 00:06:06.160 --> 00:06:09.760 and I don't think it would be that tough if we had the opportunity 71 00:06:09.760 --> 00:06:13.680 in spite of a financial crisis which is likely to come. 72 00:06:13.680 --> 00:06:18.640 I really do anticipate that we will not gradually get out of the mess that we're in. 73 00:06:19.280 --> 00:06:25.360 We have been very much aware of things that have happened since 1971. 74 00:06:26.320 --> 00:06:33.360 1971, as you know, is the date of the complete severance of the paper from gold 75 00:06:33.360 --> 00:06:41.080 on August 15th of that date. It wasn't a very good gold standard from World War II up to 76 00:06:41.080 --> 00:06:49.080 1971, but in a way it worked remarkably well in maintaining reasonable prices and taking 77 00:06:49.080 --> 00:06:54.040 care of the economy, but even Henry Haslett back in 1945 said it wasn't going to work, 78 00:06:54.040 --> 00:06:59.360 this pseudo gold standard, and sure enough in time it broke down. I think I started reading 79 00:06:59.360 --> 00:07:09.360 In the early sixties, this would happen. And it was in 1971 that I think I really became convinced. 80 00:07:09.360 --> 00:07:24.360 The predictions made were correct and this fictitious so-called price of gold at $35 an ounce could not be maintained even if it cost us 500 million ounces of gold trying to prove something that was unprovable. 81 00:07:24.360 --> 00:07:44.280 In 1971, the economic charts of spending, deficits, decreased standard of living, all 82 00:07:44.280 --> 00:07:50.080 these problems have come back to 1971. 83 00:07:50.080 --> 00:07:54.680 I think we're really approaching the climax of this. 84 00:07:54.680 --> 00:08:00.120 It's been predicted for quite a few years that we would have major troubles and problems, 85 00:08:00.120 --> 00:08:01.760 but it cannot continue. 86 00:08:01.760 --> 00:08:07.440 You cannot forever bail out one paper currency with another paper currency. 87 00:08:07.440 --> 00:08:14.520 For instance, the Mexican peso was in trouble, and the Mexican economy was in trouble. 88 00:08:14.520 --> 00:08:18.100 The New York bankers were in trouble, and the politicians were in trouble. 89 00:08:18.100 --> 00:08:48.100 So they stole 50 billion dollars of our money and sent it down there and they said well that's fine and dandy, we didn't have too many people hurt, well fine yeah, a lot of Mexican peasants got hurt and a lot of American citizens got hurt, trouble is we don't know who really got hurt here, 50 billions that drop in the bucket when you divide that up among 250 million people so, but if there is a cost long term whether it's the money we pour overseas, buying goods that we get a free ride on because we purchase 90 00:09:18.100 --> 00:09:21.100 You know, it's pretty amazing how well they hold this together. 91 00:09:21.100 --> 00:09:25.100 There's no runaway inflation. Government statistics tell us the inflation rate is low, 92 00:09:25.100 --> 00:09:30.100 and prosperity is high, and productivity is high, and unemployment is low, and everything is okay. 93 00:09:30.100 --> 00:09:34.100 Then why are so many Americans so furious with their government? 94 00:09:34.100 --> 00:09:38.100 I mean, they're annoyed, and I think justifiably so. 95 00:09:38.100 --> 00:09:42.100 But what the government won't admit, and what a lot of people don't understand, 96 00:09:42.100 --> 00:09:45.100 and what most of the congressmen don't understand, 97 00:09:45.100 --> 00:09:55.100 is this disenchantment, this uneasiness that has occurred here in the last several years is related to economics and is related to the dollar. 98 00:09:55.100 --> 00:10:02.100 Statistically, it's very clear to show that the standard of living of many Americans has dropped. 99 00:10:02.100 --> 00:10:04.100 It hasn't dropped for the high income people. 100 00:10:04.100 --> 00:10:14.100 But if you take the 20 to 25 percent of the individuals in the low income bracket, the low middle class, have a decreasing standard of living. 101 00:10:14.100 --> 00:10:19.100 And this is even confirmed by government statistics. They're willing to admit that. 102 00:10:19.100 --> 00:10:26.100 And this is related. This is predictable. This is what happens when a currency is debased. 103 00:10:26.100 --> 00:10:28.100 Eventually it wipes out the middle class. 104 00:10:28.100 --> 00:10:32.100 But we have been getting a free ride on this dollar deal for a good while. 105 00:10:32.100 --> 00:10:34.100 We're able to create new dollars. 106 00:10:34.100 --> 00:10:39.100 And to our advantage, we've been able to buy foreign products. 107 00:10:39.100 --> 00:10:42.100 Everybody complains and screams and hollers how terrible those Japanese are 108 00:10:42.100 --> 00:10:47.380 are about buying that we have a negative trade balance with the Japanese, but they're taking 109 00:10:47.380 --> 00:10:51.040 our dollars, we're printing them and we're buying their automobiles, and they're hanging 110 00:10:51.040 --> 00:10:56.300 on to the dollars. And then they decide, well, the yen is too strong and the dollar is too 111 00:10:56.300 --> 00:11:00.300 weak. What they want to do is help the dollar. So what are they doing? They decide they're 112 00:11:00.300 --> 00:11:05.420 trying desperately to inflate their yen in order to make the yen weak. And that's why, 113 00:11:05.420 --> 00:11:11.240 of course, the yen went from 80 up to 105, and that was all government action. It was 114 00:11:11.240 --> 00:11:28.240 There is all government rigging of the currency system, but on the short run we benefit by this, because we are the reserve currency, we create the money, and they borrow and they take our money and keep it and hold it in reserves, but how long will they do it? 115 00:11:28.240 --> 00:11:33.240 How long are they going to do that? I think there will be a limit. 116 00:11:33.240 --> 00:11:43.240 Not only do they take our money for their products and we complain about it, but they actually go out of their way to buy up our debt. 117 00:11:43.240 --> 00:11:53.240 You know, last year, they bought probably close to four times as much of our government paper as our own Federal Reserve did. 118 00:11:53.240 --> 00:12:02.240 And you talk about internationalizing this currency scam and this financial scam is the central banks really aren't as competitive as they pretend to be. 119 00:12:02.240 --> 00:12:32.240 I predict that eventually though the spirit of nationalism will rise up and I've been saying that all along that there will be no smooth rise to a one world currency or a unified currency in Europe and that's also the reason this week that the dollar got quite weak again because the Europeans say hey maybe we don't want to have this currency the politics of the unified currency in Europe now it's very weak compared to what they thought it was going to be a year ago so this is there's there's a lot going on 120 00:12:32.240 --> 00:12:37.880 on right now, the spending is continuing and the inflation is continuing. The consequence 121 00:12:37.880 --> 00:12:43.280 of our inflation has been delayed. We're not feeling it immediately. This is the reason 122 00:12:43.280 --> 00:12:49.480 the bubbles allowed to get much bigger. Now, in Washington, there is a pretense. There's 123 00:12:49.480 --> 00:12:54.160 a pretense up there that they need to do something about this. They're going to get their house 124 00:12:54.160 --> 00:12:59.880 in order. But I think the best demonstration of what really is going on in Washington was 125 00:12:59.880 --> 00:13:06.640 There's that little debate, so-called debate, where the Democrat Wrangel was arguing with 126 00:13:06.640 --> 00:13:10.760 the Republican and was on TV and they were in each other's face yelling and screaming. 127 00:13:10.760 --> 00:13:14.360 And even Wrangel at one time took the guy's tie and pulled it. 128 00:13:14.360 --> 00:13:20.120 And this is, I mean pretty soon there may be a fist fight going on even in the American 129 00:13:20.120 --> 00:13:21.120 Congress. 130 00:13:21.120 --> 00:13:23.200 I mean it's getting close to that. 131 00:13:23.200 --> 00:13:27.920 Now they claim it's just a technical little problem that they can't quite figure out who 132 00:13:27.920 --> 00:13:38.920 and who to cut and who to raise taxes on and they need a little technical adjustment and it's because people, the members of Congress are ingenuous and that they want to hurt one person versus the other. 133 00:13:38.920 --> 00:13:55.920 What they don't realize is the country's bankrupt and there's no more money and there is no easy solution to keep this welfare state going and the people sense it, they're unhappy, they might not fully understand it but they know there's something seriously wrong 134 00:13:55.920 --> 00:13:59.920 And here the Congress says, they're up there, they're going to have a train wreck. 135 00:13:59.920 --> 00:14:03.920 That's to distract you, I think, and they're going to change the tax code. 136 00:14:03.920 --> 00:14:07.920 But the whole thing is, what are they going to do to get this budget resolution passed? 137 00:14:07.920 --> 00:14:10.920 Well, that's been coming up every year since I've been following politics. 138 00:14:10.920 --> 00:14:15.920 That happens every year. It's just more public right now 139 00:14:15.920 --> 00:14:20.920 because the Republicans are running the Congress and the media is on the side of the Democrats 140 00:14:20.920 --> 00:14:23.920 and they're making this a little bit more dramatic. 141 00:14:23.920 --> 00:14:28.720 I can't remember very many times in the four terms I was there that we really had a budget 142 00:14:28.720 --> 00:14:35.200 resolution. We never systematically passed thirteen appropriation bills and sent that 143 00:14:35.200 --> 00:14:40.480 off. It was always, seems to me, a continuing resolution. Then they would come up after 144 00:14:40.480 --> 00:14:44.320 a month or two and then they would have a, they would have another bill and they would 145 00:14:44.320 --> 00:14:48.480 have a budget. And then about six months later they'd come up and they'd say, well, we've 146 00:14:48.480 --> 00:14:53.520 run out of funds here. We have to have a supplemental appropriation. That's all going to happen. 147 00:14:53.520 --> 00:14:59.360 And they're not going to have a budget on October 1st, but they will have a continuing resolution. 148 00:14:59.360 --> 00:15:04.640 The whole posturing is all political to who gets to blame for this problem. 149 00:15:04.640 --> 00:15:09.680 And I think that maybe there's a little bit of blame to go all the way around 150 00:15:09.680 --> 00:15:14.480 in our administrations and on both sides of the aisle because they all participate 151 00:15:14.480 --> 00:15:18.920 in the spending. It's just that they've been wanting to spend for different reasons. 152 00:15:18.920 --> 00:15:28.920 Well, we have the budget coming up October 1st, but then shortly thereafter, there's the expectation and the dramatic confrontation about raising the national debt. 153 00:15:28.920 --> 00:15:39.920 The national debt is $4.9 plus trillion, and that means it's very close to approaching the $5 trillion mark, and they have to raise the national debt to make it legal. 154 00:15:39.920 --> 00:15:45.920 I don't know why they worry about that. They don't want to look at anything else. Everything else they do is practically illegal, too. 155 00:15:45.920 --> 00:15:50.760 But now they're going to be talking about making it make sure this is legal and if it isn't 156 00:15:50.960 --> 00:15:54.560 Do you think it was legal to send 50 billion dollars to Mexico? 157 00:15:54.560 --> 00:15:56.320 I mean there was nothing legal about that 158 00:15:56.320 --> 00:16:02.520 So there will be contingency funds and they're going to take care of all the weight and the burden and the pressure 159 00:16:02.680 --> 00:16:09.920 Will be placed on the on the US dollar, but there will be some some resolution of this the deficit will be increased 160 00:16:09.920 --> 00:16:13.480 I remember very clearly in the early 1980s 161 00:16:13.480 --> 00:16:19.480 I've been a supporter of Ronald Reagan's in 1976 and 1980. I was hopeful, you know, that something would happen. 162 00:16:19.480 --> 00:16:31.480 The first vote that we had in early 1981 came from Reagan and the Republican and the Democrats got together and said we have to raise the national debt. 163 00:16:31.480 --> 00:16:41.480 Ronald Reagan sent his congressional liaison over and he says, I know you guys. I know what we ran on and we know what we're supposed to do and we have to balance the budget. 164 00:16:41.480 --> 00:17:03.480 the National Debt by $50 Billion 165 00:17:03.480 --> 00:17:17.080 Before I left in 1984, just four years later, they had come in and Reagan asked for, and it was passed, to raise the national debt by $500 billion at one time. 166 00:17:17.080 --> 00:17:26.080 And so the process goes on. The debate is the same. Economic law is going to bring this to an end, not the politicians in Washington. 167 00:17:26.080 --> 00:17:33.080 No matter how determined they seem and what they have preached and have told everybody, 168 00:17:35.280 --> 00:17:40.160 it's not going to happen that way. November 15th is probably an important day to look 169 00:17:40.160 --> 00:17:45.160 at because there's a record amount of interest due that day. Interest has to be paid. That's 170 00:17:45.160 --> 00:17:49.560 not rolling over the debt. They're going to have to raise a lot of money. They need $22 171 00:17:49.560 --> 00:18:19.560 And that problem is going to compound as time goes on, because we have had a very astute politician here from Texas that helped Clinton out for a while on the budgetary matter, and that was Senator Benson, we became Secretary of Treasury, he took all the long-term debt, a bunch of it, changed it to short-term debt, and then drove interest rates down, and it was miraculous, it cut off, you know, 50, 60, 70 billion dollars of interest payments. 172 00:18:19.560 --> 00:18:25.560 I mean, insolvent savings and loans, what's going to happen when the interest rates go up? 173 00:18:25.560 --> 00:18:30.560 You have a $5 trillion debt, interest rates go up 1%, $50 billion. 174 00:18:30.560 --> 00:18:37.560 And, you know, according to our understanding of economics, long term, at least, we can expect higher interest rates. 175 00:18:37.560 --> 00:18:43.560 If the world gets nervous about the dollar and they will reject the dollar, how are we going to finance this deficit? 176 00:18:43.560 --> 00:18:45.560 How are we going to sell the bonds? 177 00:18:45.560 --> 00:18:49.640 interest rates have to go up. You don't have to have high interest rates 178 00:18:49.640 --> 00:18:53.360 because you have a booming economy and everybody needs a lot of money to build 179 00:18:53.360 --> 00:18:57.960 new businesses and economic growth reasons. That's one reason why interest 180 00:18:57.960 --> 00:18:59.560 rates may go up, the demand for 181 00:18:59.560 --> 00:19:03.060 demand for that type of loans. But if you 182 00:19:03.060 --> 00:19:06.800 if you have lost confidence in the dollar and nobody will buy the treasury bills, 183 00:19:06.800 --> 00:19:10.480 you're going to have interest rates go up and that's going to be uncontrollable and believe me they 184 00:19:10.480 --> 00:19:14.840 have not, they do not have that calculated in this miraculous plan 185 00:19:14.840 --> 00:19:17.480 to balance the budget in seven years. 186 00:19:17.480 --> 00:19:19.200 Isn't it amazing? 187 00:19:19.200 --> 00:19:23.760 Seven years. The only budget counts is one year, but they have this miraculous plan. 188 00:19:23.760 --> 00:19:27.300 You know, in the old days, you know, in the old days of Graham Rudman, 189 00:19:27.300 --> 00:19:31.400 they used to say they would have four-year plans, even though there were two Graham Rudmans, 190 00:19:31.400 --> 00:19:32.580 four-year plans. 191 00:19:32.580 --> 00:19:36.360 They at least were a little bit more optimistic than the communists. The communists always had 192 00:19:36.360 --> 00:19:37.840 five-year plans. 193 00:19:37.840 --> 00:19:42.840 But we had four-year plans to balance the budget, even though one year is the only one that counts. 194 00:19:42.840 --> 00:19:46.640 But the four-year plan has now given way to the seven-year plan. 195 00:19:46.640 --> 00:19:54.240 The seven-year plan is miraculous in that the first year there is a token little bit of cuts in the proposed increases. 196 00:19:54.240 --> 00:19:59.040 The spending's going up, the deficit's going up, and the taxes are going up. 197 00:19:59.040 --> 00:20:04.440 Everything's going up, but there's this big, big story about these radical cuts going on. 198 00:20:04.440 --> 00:20:06.540 The second year, nothing. 199 00:20:06.540 --> 00:20:10.640 All the cuts, all the real cuts are in the sixth and seventh year. 200 00:20:10.640 --> 00:20:21.480 And then they can get on television and then they can brag and say, look, this is the first time in the history of the 20th century that we have voted in a balanced budget program. 201 00:20:21.480 --> 00:20:25.040 Nothing could be further from the truth. They don't know what interest rates are going to be. 202 00:20:25.040 --> 00:20:30.240 They don't know how bad the recessions will be between now and then and how much the government's going to have to spend. 203 00:20:30.240 --> 00:20:32.640 They don't know how much production there's going to be. 204 00:20:32.640 --> 00:20:37.760 They won't know the revenues. And there's very little they know. 205 00:20:37.760 --> 00:20:45.760 When I refused to sign on and vote for the Reagan budget of 1981, a bit of an embarrassment to them, I guess, 206 00:20:45.760 --> 00:20:50.360 because I was the only Republican that didn't, after having supported the President. 207 00:20:50.360 --> 00:20:53.560 All the Republicans had voted against the previous year's budget. 208 00:20:53.560 --> 00:20:59.360 It was $38 billion under Carter, and every Republican voted against it. 209 00:20:59.360 --> 00:21:04.160 So when Reagan came in, he proposed this budget with $45 billion deficit. 210 00:21:04.160 --> 00:21:09.520 And I had gone to school and I had studied hard and I knew a little bit of arithmetic 211 00:21:09.520 --> 00:21:16.800 and I knew that 45 was bigger than 38. I really did. And so I went to them. I said, 212 00:21:16.800 --> 00:21:20.160 I don't think I can vote for this. And they said, well, this is so much better than if 213 00:21:20.160 --> 00:21:25.440 the Democrats were in. I mean, they wanted 50 or 60 and this is, we're saving the nation. 214 00:21:25.440 --> 00:21:29.760 And this is the litmus test to be loyal to Ronald Reagan and the revolution. 215 00:21:29.760 --> 00:21:33.040 And I don't understand that. I said, I have trouble with that arithmetic. 216 00:21:33.040 --> 00:21:36.280 But let me tell you what I think. 217 00:21:36.280 --> 00:21:41.640 I'm not going to vote for it, and I think the deficit is going to be twice that bad. 218 00:21:41.640 --> 00:21:45.080 And it turned out that I was way off. It was three times that bad. 219 00:21:45.080 --> 00:21:49.960 And I didn't even use the computer. You know, I just used my arithmetic and a little scratch paper. 220 00:21:49.960 --> 00:21:54.400 I said it's going to be worse because I think the economy isn't going to be as well, and interest rates will be higher. 221 00:21:54.400 --> 00:22:00.720 And that's as close as they can get on the calculations. They are not very good at calculating. 222 00:22:00.720 --> 00:22:09.720 But the bubble is growing. There's a very important relationship to the problems in Washington, to money. 223 00:22:09.720 --> 00:22:15.220 Now, we talk a lot about taxes and we talk a lot about money. I've been very interested in the monetary issue. 224 00:22:15.220 --> 00:22:21.920 Thankful to people like Murray Rothbard and Sandholz and the Mises Institute and the Fee Foundation. 225 00:22:21.920 --> 00:22:26.120 All these groups have helped me to study this over the years. 226 00:22:26.120 --> 00:22:56.120 And in spite of my interest in the money issue, I am the first one to admit the money issue is not the total issue. It is not the most important issue. The most important issue is liberty. Freedom and the role of government and the purpose of government. The purpose of government is to be there to preserve our liberties. It's to be very limited and fortunate that we have a pretty good document to follow if we would. The government would be designed for that. But close to that is the money issue because governments have always had a 227 00:22:56.120 --> 00:23:12.120 The tendency not to follow the rules. This is human nature, that you might restore sanity to the government and institute limited government, but there's always the temptation that, you know, the power corrupts and the government gets bigger and liberty is extinguished. 228 00:23:12.120 --> 00:23:28.120 And this has been the temptation. One of the purposes of the gold standard and a sound monetary system is to make sure that those individuals who want bigger government can't do it in a very, very sinister, dishonest, immoral fashion. 229 00:23:28.120 --> 00:23:41.120 And that is, spend the money, not even collect the revenues directly and then print it. It's not a whole lot more complicated than that. They just create the money out of thin air to subsidize a big government program. 230 00:23:41.120 --> 00:23:53.120 If we had an honest government that was following the rules of the gold standard, yes, it would have a restraint on the growth of government. 231 00:23:53.120 --> 00:23:58.120 The 19th century is a pretty good example of that. Far from perfect. It was not a perfect gold standard. 232 00:23:58.120 --> 00:24:07.120 Bi-metalism and they had national banks and they had a civil war and a few other little problems like that that caused them to abuse the rules of the gold standard. 233 00:24:07.120 --> 00:24:37.120 Gold Standard. But generally it was believed that they should follow the gold standard, even to the point where after the Civil War they went back to a gold standard without a great deal of difficulty. But, you know, throughout the 19th century, no huge deficits and no huge growth in government. That has occurred in this century. And it came together. Those who believed in big government knew they had to undermine the restraints. One restraint was getting 234 00:24:37.120 --> 00:24:39.040 in your wallet directly with a tax. 235 00:24:39.040 --> 00:24:40.560 So they had to get an income tax. 236 00:24:40.560 --> 00:24:41.920 That was the direct method. 237 00:24:41.920 --> 00:24:44.680 They also knew that most Americans weren't all that 238 00:24:44.680 --> 00:24:47.620 interested in sharing their wealth with the government 239 00:24:47.620 --> 00:24:49.500 that they didn't trust all that well. 240 00:24:49.500 --> 00:24:51.780 So at the same time, they, of course, 241 00:24:51.780 --> 00:24:55.240 created this government system of monetary debasement 242 00:24:55.240 --> 00:24:58.200 and created the Federal Reserve system 243 00:24:58.200 --> 00:25:01.600 in order to undermine the gold standard. 244 00:25:01.600 --> 00:25:06.600 But the gold standard could very well restrict the size, 245 00:25:06.600 --> 00:25:13.800 is the size of government if we had the individuals there that would obey the gold standard. 246 00:25:13.800 --> 00:25:21.800 The notion, the principle of inflation is that, of course, it's immoral in a sense because 247 00:25:21.800 --> 00:25:27.800 it's counterfeit, but it is a tax too, and I think if we could get more people to think 248 00:25:27.800 --> 00:25:34.040 of inflation as a tax, it might be a better way to handle the problem, especially since 249 00:25:34.040 --> 00:25:42.040 The tax falls unfairly on a segment of our society, especially the low-middle-income people. 250 00:25:42.040 --> 00:25:47.040 Now, we're in this mess of trying to pay for a government that doesn't work. 251 00:25:47.040 --> 00:25:51.040 And nobody's willing to give up. Everybody's afraid. You know, everybody's unhappy. 252 00:25:51.040 --> 00:25:55.040 I don't think there are very many who are totally pleased with what's happening. 253 00:25:55.040 --> 00:26:01.040 But I've decided about half the people that are unhappy are sick and tired of paying the bills. 254 00:26:01.040 --> 00:26:05.680 and the other half are scared to death their checks won't come and so they're 255 00:26:05.680 --> 00:26:11.320 they're very concerned about what's happening but the politicians in 256 00:26:11.320 --> 00:26:15.720 Washington I think would like to avoid the real debate and really the real 257 00:26:15.720 --> 00:26:20.600 debate is the size of government, the role of government, defending liberty, reducing 258 00:26:20.600 --> 00:26:25.660 the size of government which means in the in a very practical fashion what 259 00:26:25.660 --> 00:26:32.060 What needs to be done is we have to cut spending immediately and in real terms and yet the 260 00:26:32.060 --> 00:26:37.380 great debate right now, what has the debate been these last several months, it's mainly 261 00:26:37.380 --> 00:26:43.560 been on tax collecting, how to collect taxes less painfully, let's have a flat tax rate 262 00:26:43.560 --> 00:26:49.780 of 17% or 20% and miraculously everything is going to be okay or let's have a sales 263 00:26:49.780 --> 00:27:03.780 And now, you know, when I proposed that we do away with the IRS back in the 1970s, this was looked at with, you know, a little bit of curiosity and this weird guy introducing this. 264 00:27:03.780 --> 00:27:11.780 Now, I can have to say that I'm very pleased that even our chairman of Ways and Means Committee and others, Lugar and others, have said, let's get rid of the income tax. 265 00:27:11.780 --> 00:27:18.780 That means we have popularized the idea and a lot of Americans are responding to that, and they're not really quite leading. 266 00:27:18.780 --> 00:27:28.780 I think they're doing a little bit following and trying to put their ear to the wind and find out what the American people might want them to say, but at least it's more popular to talk about getting rid of the income tax. 267 00:27:28.780 --> 00:27:36.780 But what are they saying? Well, let's have a sales tax. You know, what kind of sales tax do you think we might need if we paid for all our bills? 268 00:27:36.780 --> 00:27:42.780 It might be 38. I've seen all kinds of estimates. 38, 40 percent sales tax. In a way, it would be okay, though. 269 00:27:42.780 --> 00:27:47.780 I think it would sort of be getting rid of the principle of withholding. 270 00:27:47.780 --> 00:27:50.780 You know, you walk into the store and you buy that loaf of bread. 271 00:27:50.780 --> 00:27:54.780 It used to cost you a dollar and say it's a dollar forty and forty is going to the federal government. 272 00:27:54.780 --> 00:27:59.780 People start, really, you know, I don't think I'm getting my money's worth anymore from the federal government. 273 00:27:59.780 --> 00:28:01.780 This is a good idea, you know. 274 00:28:01.780 --> 00:28:03.780 So I would, I lean toward that. 275 00:28:03.780 --> 00:28:09.780 I would go for the sales tax over the income tax because I haven't been much of a friend of the IRS. 276 00:28:09.780 --> 00:28:11.780 And I don't like the IRS. 277 00:28:11.780 --> 00:28:41.780 I never talk about taxes without continuously emphasizing that learning to tax us less painfully is not the problem. The problem is spending. Cut spending, cut spending, cut spending. Then maybe think about raising a lot less money some other way. If we had 90% of our government removed and probably 8 or 90% we could, collecting the revenues for the rest wouldn't be too difficult. 278 00:28:41.780 --> 00:29:11.780 I'm sort of fascinated with this idea that two important members of Congress, both from Texas, are advocating two diametrically opposed methods of revenue collection, and that is the sales tax versus the income tax, and I'm suspicious at times about how things operate up there, and I think it sort of distracts you from the real issue, and that is cut spending, cut spending, cut spending, but I think it's one important point 279 00:29:11.780 --> 00:29:17.940 about what they're doing with taxes and that is that even those who are saying 280 00:29:17.940 --> 00:29:23.260 if we go to a sales tax I want to get rid of the IRS I don't want any more IRS 281 00:29:23.260 --> 00:29:30.580 but they never bring up one subject and that is the worst of the income tax and 282 00:29:30.580 --> 00:29:36.340 I don't call it Social Security tax I call it a regressive income tax which is 283 00:29:36.340 --> 00:29:40.420 a great burden to us and it's the worst kind because it's on everybody on the 284 00:29:40.420 --> 00:30:10.420 Social Security Tax 285 00:30:10.420 --> 00:30:18.420 So they're likely to raise that. The odds of them raising that most regressive income tax is very good. 286 00:30:18.420 --> 00:30:23.420 So whether you have the flat tax or the sales tax, you're always going to have the Social Security tax. 287 00:30:23.420 --> 00:30:31.420 So the problem is much greater than just dealing with which way we're going to collect this revenue. 288 00:30:31.420 --> 00:30:39.420 It has to do with they have too much revenue and we have to figure out some way to cut down the size of government. 289 00:30:39.420 --> 00:30:58.420 My theory is that the reason that it was a total failure in the 1980s, my enthusiasm that lasted a month or two under the Reagan administration, came to an end, and I think I've been proven more correct than the other side, that there wasn't much done. 290 00:30:58.420 --> 00:31:05.420 The national debt tripled under Reagan. It was less than a trillion dollars when Reagan came into office. It's five trillion dollars now. Nothing has changed. 291 00:31:05.420 --> 00:31:12.860 I don't believe everybody that is in Washington is deliberately doing this to us. 292 00:31:12.860 --> 00:31:18.300 I think many of them go very sincerely thinking that they can tinker on the edges and come 293 00:31:18.300 --> 00:31:22.940 up with a compromise and cut back, and I don't think that's true. 294 00:31:22.940 --> 00:31:28.420 I think what has happened for even the good conservatives who went with good intentions 295 00:31:28.420 --> 00:31:29.940 have made sincere efforts to do this. 296 00:31:29.940 --> 00:31:35.400 The reason they have lost and they will continue to lose is they're fighting this on an accounting 297 00:32:05.400 --> 00:32:13.400 The government has the moral authority to initiate this power and force to come with a gun and take from you to give it to somebody else. 298 00:32:13.400 --> 00:32:18.400 And I think you have to go and tell them they have no authority to do that. 299 00:32:18.400 --> 00:32:24.400 They do not have the right to do it. They don't have the constitutional authority to do it. 300 00:32:24.400 --> 00:32:29.400 And besides that, if you want a more practical reason, it's been a fiasco. 301 00:32:29.400 --> 00:32:32.400 It absolutely doesn't work, hasn't worked and won't work. 302 00:32:32.400 --> 00:32:39.400 5 trillion dollars in the war on poverty, more poverty than ever, more homeless than ever, education worse than ever. 303 00:32:39.400 --> 00:32:44.400 So even from the very practical humanitarian argument, we win. 304 00:32:44.400 --> 00:32:48.400 We win all those arguments, yet we're not winning the fight in Washington yet. 305 00:32:48.400 --> 00:32:54.400 And I think it's because we concede to them the moral argument at the beginning that they're allowed to do it. 306 00:32:54.400 --> 00:33:00.400 And I think somebody has to get up there and say, you do not have this authority and it must stop. 307 00:33:00.400 --> 00:33:07.400 That's why I'm interested in that piece of legislation you could, if that is a good vehicle to say, look, you show me. 308 00:33:07.400 --> 00:33:15.400 And I'm sure, like I said, even those who claim they would vote for that piece of legislation, they probably have never even thought about the money issue. 309 00:33:15.400 --> 00:33:26.400 So you could go and say, show me where you can justify the Federal Reserve system under the Constitution, and why don't we do more to improve this. 310 00:33:26.400 --> 00:33:40.400 Today versus a gold standard. I've mentioned the gold standard restrains government power, it is a check on government spending, it keeps the government from spending more than it has in the monetized debt. 311 00:33:40.400 --> 00:33:53.400 Probably the number one reason, at least close to the top, of why we end up with a paper monetary system is that those who control the money, the control of money, are the most powerful. 312 00:33:53.400 --> 00:33:58.800 Money conveys a lot of power to those who control the money. 313 00:33:58.800 --> 00:34:05.240 Even when we used metals for currencies, we've always had the stamp of the king on the money. 314 00:34:05.240 --> 00:34:07.640 The king always controlled the money. 315 00:34:07.640 --> 00:34:10.320 And if he didn't have enough, he debased the metals. 316 00:34:10.320 --> 00:34:12.440 And it's just a little more sophisticated today. 317 00:34:12.440 --> 00:34:17.280 They just pull a computer switch and create $10 billion, whatever they need. 318 00:34:17.280 --> 00:34:19.800 So it's the same thing. It's power. It's power. 319 00:34:19.800 --> 00:34:27.560 Those who control it, now it's sophisticated, and those who are behind the scenes controlling it can benefit in many, many ways. 320 00:34:27.560 --> 00:34:34.280 So, I think power by those who delight in political power are greatly motivated. 321 00:34:34.280 --> 00:34:39.960 Probably a close second to the desire to hold power and the way to hold power, of course, would be to control the military. 322 00:34:39.960 --> 00:34:48.040 But controlling military and control the money just about makes it impossible for individuals who believe in liberty, 323 00:34:48.040 --> 00:35:02.040 The Gold Coin Standard is so important compared to a pseudo-gold standard and a gold exchange standard. 324 00:35:02.040 --> 00:35:07.040 Another major reason why you have a paper standard is for the purpose of monetizing debt. 325 00:35:07.040 --> 00:35:16.040 If they spend the money, they can and will monetize the debt and manipulate the whole monetary system this way. 326 00:35:16.040 --> 00:35:22.500 I believe that there were very knowledgeable people who fought for the Federal Reserve 327 00:35:22.500 --> 00:35:25.840 system in 1913 that knew exactly what they were doing. 328 00:35:25.840 --> 00:35:31.160 It wasn't too long after that that they were able to use the monetary system to finance 329 00:35:31.160 --> 00:35:40.080 the World War I and, of course, the Depression and everything else that came down the road. 330 00:35:40.080 --> 00:35:50.080 The Keynesians use the paper monetary system and I give them a little bit of intellectual credit for this or at least intellectual honesty. 331 00:35:50.080 --> 00:36:01.080 They honestly believe and been taught in school that the people in the Federal Reserve are a lot smarter than the marketplace 332 00:36:01.080 --> 00:36:07.080 and you need smart people managing the money so that we don't have any recessions or depressions. 333 00:36:07.080 --> 00:36:12.080 They were banking crisis in the 19th century and they didn't understand how they came about. 334 00:36:12.080 --> 00:36:17.080 So therefore they said, we must make sure we don't have depressions and what not. 335 00:36:17.080 --> 00:36:25.080 So therefore they have to have smarter people running the money supply than the marketplace, such as with gold and silver. 336 00:36:25.080 --> 00:36:29.080 Others would be very sophisticated in wanting to transfer wealth. 337 00:36:29.080 --> 00:36:34.080 And like I mentioned before, there is a transfer of wealth that occurs under the paper monetary system. 338 00:36:34.080 --> 00:36:39.680 is the wealthy can get wealthier, the poor get poorer, the middle class get wiped out. 339 00:36:39.680 --> 00:36:42.040 And who are the beneficiaries of all this? 340 00:36:42.040 --> 00:36:48.440 You know, the corporations, the big banks, governments, the politicians, the bureaucrats, 341 00:36:48.440 --> 00:36:54.560 they have direct benefits from this type of system. 342 00:36:54.560 --> 00:36:58.240 One other area I think that, and I think it may have been already discussed at the conference, 343 00:36:58.240 --> 00:37:03.080 I think that now we do live in a much more international age. 344 00:37:03.080 --> 00:37:11.080 This is not just the Federal Reserve system. We are now talking about the Bank of International Settlements being very much involved. 345 00:37:11.080 --> 00:37:17.080 We are now a member of the BIS for the first time, and this occurred just last year. 346 00:37:17.080 --> 00:37:29.080 They would like to have one world currency, but I don't think the one world currency is as much threat today as it is the manipulation that goes behind the scenes. 347 00:37:59.080 --> 00:38:04.520 The gold standard to work, I think you have to have a little bit of trust in government. 348 00:38:04.520 --> 00:38:08.280 This is why, going back to the gold standard after the Civil War period, there was trust 349 00:38:08.280 --> 00:38:09.280 in government. 350 00:38:09.280 --> 00:38:11.080 They said, we're not going to spend more money than we take in. 351 00:38:11.080 --> 00:38:14.000 We're not going to run up deficits. 352 00:38:14.000 --> 00:38:16.560 We're going to withdraw some greenbacks. 353 00:38:16.560 --> 00:38:18.480 And they weren't promoting the welfare state. 354 00:38:18.480 --> 00:38:21.320 And they weren't in a mood for another war. 355 00:38:21.320 --> 00:38:22.320 And the people believed them. 356 00:38:22.320 --> 00:38:28.240 And the final conversion date after a three-year transition period was a non-event. 357 00:38:28.240 --> 00:38:34.120 That is not likely to happen today. There's too much pressure to spend, too many special 358 00:38:34.120 --> 00:38:40.560 interests. Eventually, though, if there is a collapse, we should have something available. 359 00:38:40.560 --> 00:38:45.000 I don't think it should be all that complicated. We could, as a guide, go to the Constitution 360 00:38:45.000 --> 00:38:51.280 and just look and see what we're supposed to do. And it says something about making 361 00:38:51.280 --> 00:38:56.560 only gold and silver legal tender. We might improve on that. I certainly think if we had 362 00:38:56.560 --> 00:39:00.560 Gold and Silver is legal tender. We shouldn't have any fixed exchange rate between gold and silver. 363 00:39:00.560 --> 00:39:07.560 We shouldn't have a fixed bimetallic standard that they had in the 19th century, which was a shortcoming. 364 00:39:07.560 --> 00:39:13.560 But we could use gold. We could use silver. Silver was the unit of account originally. 365 00:39:13.560 --> 00:39:24.560 And this would restrain government. But overall, the most important thing, of course, is to restrain the government as government grows and its power. 366 00:39:24.560 --> 00:39:33.560 I am not all that optimistic, you know, like I say, about what is happening in Washington that they're going to come up with a balanced budget and we are moving toward a crisis. 367 00:39:33.560 --> 00:39:42.560 But I am optimistic in many other ways. I do believe this country has come a long way into developing a new generation of people who understand what is happening. 368 00:39:42.560 --> 00:39:45.560 I think we've seen the early stages of what's happening with the last Congress. 369 00:39:45.560 --> 00:39:53.560 But we have some there that are weak enough or not well informed enough to know exactly what to do to stand up to the resistance of the leadership. 370 00:39:53.560 --> 00:40:15.560 It wasn't Clinton who built up Mexico. It wasn't Clinton. The Congress had to be a collaborator, and believe me, there was a major meeting. It occurred at the White House, and the leadership on the Republican side of the House and on the Senate attended it, and they gave the approval of that, and there was some token votes after that to try to criticize it. 371 00:40:15.560 --> 00:40:45.560 I don't want to criticize it but the approval is there to continue this and we will continue with that but I don't anticipate that we're going to see that real soon so in the meantime I think that we can anticipate that we will continue with our educational process and have more people available to make these changes and I think there's reason to believe if we face up to a major economic 372 00:40:45.560 --> 00:40:50.560 and the economic crisis, that if we do the right thing, that we don't have to suffer. 373 00:40:50.560 --> 00:40:56.560 If we give up, if we don't have enough people to present these views, if we don't have a sound currency 374 00:40:56.560 --> 00:41:00.560 and we don't have a concept about the morality of the proper role of government, 375 00:41:00.560 --> 00:41:03.560 I think we're going to lose and things are going to get a lot worse. 376 00:41:03.560 --> 00:41:11.560 But if we do the right things, even if the bubble bursts and we suffer as the lower 25% of the people suffer, 377 00:41:11.560 --> 00:41:14.560 if we all suffer and lose half our wealth or three quarters of our wealth, 378 00:41:14.560 --> 00:41:18.040 Clinton has his way. He's going to consume our pension funds and everything else. 379 00:41:18.040 --> 00:41:21.320 They're going to be taxed away. We are not building wealth. We're not building 380 00:41:21.320 --> 00:41:24.480 strength in our currency. This country is getting poorer. 381 00:41:24.480 --> 00:41:28.800 But if we get very much poorer and do the right things, I don't think it would take very long. 382 00:41:28.800 --> 00:41:32.840 I think within a short period of time we would be back on our feet again 383 00:41:32.840 --> 00:41:36.640 and doing all the things necessary and building great wealth again. 384 00:41:36.640 --> 00:41:39.960 Our problem is we've concentrated too much on the wealth. 385 00:41:39.960 --> 00:41:51.960 Our country is so determined for the materialism of the world and forgetting about the standards that are necessary, the type of government we need. 386 00:41:51.960 --> 00:42:00.960 They have given up on that. And now a corporation spends more money probably on their lobbying efforts in Washington than they do on their research. 387 00:42:00.960 --> 00:42:03.960 And it's probably a short-term wise decision. 388 00:42:03.960 --> 00:42:06.960 In the short run, I have one little question for you. 389 00:42:36.960 --> 00:42:41.960 I would suggest that we do one thing to the tax code to help a little bit, to give us a little bit of time. 390 00:42:41.960 --> 00:42:44.960 I would remove all taxes on capital gains. 391 00:42:44.960 --> 00:42:48.960 I would remove all taxes on interest earns from savings. 392 00:42:48.960 --> 00:42:51.960 And I'd usually remove all taxes on dividends. 393 00:42:51.960 --> 00:42:55.960 And then I think this would give us another year or two or three. 394 00:42:55.960 --> 00:42:58.960 This would be tremendous if we didn't have a tax code. 395 00:42:58.960 --> 00:43:02.960 I would suggest that we do one thing to the tax code to help a little bit. 396 00:43:02.960 --> 00:43:05.760 And I think this would give us another year or two or three. 397 00:43:05.760 --> 00:43:09.200 This would be tremendous to help the economy. 398 00:43:09.200 --> 00:43:11.840 And yet I don't think they're likely to do that. 399 00:43:11.840 --> 00:43:15.400 That would just create a lot of demagoguing again. 400 00:43:15.400 --> 00:43:16.800 And they'll lose the argument. 401 00:43:16.800 --> 00:43:23.440 The demagogues will beat up on the semi-demagogues, and the semi-demagogues will lose. 402 00:43:23.440 --> 00:43:24.440 But we lose. 403 00:43:24.440 --> 00:43:28.440 We haven't been successful enough, I think, for major reasons. 404 00:43:28.440 --> 00:43:34.000 We have been able to present the merits of the free market and show how it creates prosperity, 405 00:43:34.000 --> 00:43:39.680 but we really haven't shown how liberty is beneficial in a humanitarian sense. 406 00:43:39.680 --> 00:43:47.680 We come up short by looking like we're supporting only the rich, and yet in a free society, 407 00:43:47.680 --> 00:43:53.060 in a sound monetary system, in a limited government system, it's really the only humanitarian 408 00:43:53.060 --> 00:43:54.840 approach to government. 409 00:43:54.840 --> 00:43:56.600 And our country has proven this. 410 00:43:56.600 --> 00:44:01.520 We did have great prosperity, we had a huge middle class, we were the leaders of the world 411 00:44:01.520 --> 00:44:03.120 and now we're getting poorer. 412 00:44:03.120 --> 00:44:10.440 We have a currency that's reaching its last legs and we have not presented this case well. 413 00:44:10.440 --> 00:44:15.560 So not only do we need to know the soundness of the economics, but we also need to be able 414 00:44:15.560 --> 00:44:23.560 to present this in a very positive way so that the people understand it and will accept 415 00:44:23.560 --> 00:44:26.400 our ideas for a very positive way. 416 00:44:26.400 --> 00:44:32.800 Now, there is a famous quote that I like to use from Mises to sort of make this point, 417 00:44:32.800 --> 00:44:38.160 since he was such a great leader and the champion of the free market and one that influenced 418 00:44:38.160 --> 00:44:39.760 me a whole lot. 419 00:44:39.760 --> 00:44:45.640 Mises said, the flowering of a human society depends on two factors, the intellectual power 420 00:44:45.640 --> 00:44:53.000 of outstanding men to conceive sound social and economic theories and the ability of these 421 00:44:53.000 --> 00:44:57.800 or other men to make these ideologies palatable to the majority. 422 00:44:57.800 --> 00:45:04.040 So we can have sound theories, but if we don't make them acceptable and palatable and understandable 423 00:45:04.040 --> 00:45:08.680 and why people should be for them, we can't win this fight. 424 00:45:08.680 --> 00:45:10.080 We have to do that. 425 00:45:10.080 --> 00:45:16.120 This is in contrast to many of my friends who believe, like I do, about most of these 426 00:45:16.120 --> 00:45:21.260 issues, but they come down on the side and say, Ron, you're wasting your time. 427 00:45:21.260 --> 00:45:28.900 Don't go into politics, politics is the worst thing to do, it's corruption and it's not 428 00:45:28.900 --> 00:45:34.500 the way you bring about change, you only bring about change through economic education. 429 00:45:34.500 --> 00:45:39.620 I happen to not accept that notion, I am a political activist even though I recognize 430 00:45:39.620 --> 00:45:43.360 the superiority of economic education. 431 00:45:43.360 --> 00:45:48.120 I think that's number one, education and beliefs are important, but can you imagine if our 432 00:45:48.120 --> 00:45:53.160 Our founders of this country were as aware of what should have been done and they didn't 433 00:45:53.160 --> 00:45:54.160 do it. 434 00:45:54.160 --> 00:45:55.160 They said, well, I'm not a political activist. 435 00:45:55.160 --> 00:45:58.640 This will live with the king for a while longer and maybe we can persuade them. 436 00:45:58.640 --> 00:46:03.240 Well, there was a point where they said, no, we are done trying to persuade and they became 437 00:46:03.240 --> 00:46:04.600 political activists. 438 00:46:04.600 --> 00:46:06.920 I think that we should become political activists. 439 00:46:06.920 --> 00:46:10.000 I do not believe that we should pack our bags and leave the country. 440 00:46:10.000 --> 00:46:11.520 I don't think that we should give up. 441 00:46:11.520 --> 00:46:13.480 I think this is a good place to fight the battle. 442 00:46:13.480 --> 00:46:14.960 I think it can be a lot of fun. 443 00:46:14.960 --> 00:46:20.620 I think that coming together with people like this, like you, that we have similar beliefs 444 00:46:20.620 --> 00:46:25.420 and convictions, we should not look at it on a negative thing that tomorrow the world's 445 00:46:25.420 --> 00:46:27.940 coming to an end or the economy's going to collapse. 446 00:46:27.940 --> 00:46:31.880 If we have problems, take advantage of it to present our views and maybe our views would 447 00:46:31.880 --> 00:46:33.160 be more listened to. 448 00:46:33.160 --> 00:46:37.760 The fact that now a candidate is talking about the gold standard makes us all more credible 449 00:46:37.760 --> 00:46:41.760 because we've been talking about the gold standard for a long time and therefore we 450 00:46:41.760 --> 00:46:49.260 We should not be at a point where we say, you know, give up and say everything is going to and because we don't know what will come. 451 00:46:49.260 --> 00:46:54.260 We don't know the consequence of our actions and miraculous things can happen. 452 00:46:54.260 --> 00:47:02.760 So in that sense, I'm optimistic, optimistic in many ways on what I do, not because of me myself, because I know my shortcomings, 453 00:47:02.760 --> 00:47:16.760 But where I am optimistic, where I have become convinced, is that the ideas of liberty, the principles that we know about, that have been part of the American system, I am convinced they are the right ones. 454 00:47:16.760 --> 00:47:25.760 That I am firmly convinced. But I'm also firmly convinced that every one of us has an obligation to do whatever he or she can do to promote these ideas. 455 00:47:25.760 --> 00:47:40.760 I think if you know these things are true, believe they are true, and then all you do is accumulate more funds and put them in a Swiss bank account and forget about education and political action, I don't think that's the right way to do it. 456 00:47:40.760 --> 00:47:54.760 I would have a personal criticism of that and think that we should reinvest a little bit of our time and energy in trying to preserve the very important concept and the principles of liberty that are so dear to all of us. 457 00:47:54.760 --> 00:47:55.760 And I thank you very much.