Ron Paul has some of the most extreme views out of all the presidential candidates. Because of these views, Paul has gained many loyal followers; however, they also make him potentially vulnerable. Though he is not the frontrunner in the race to win the Republican nomination--he came in fifth in last week's Republican caucus in Iowa, garnering 10 percent of the vote--let's look at how things might turn out if Paul is able to win the Republican nomination and become president.
Paul is heavily in favor of free market ideas and he strongly opposes taxes. His campaign website touts the fact that he has never voted for tax increases during his term as a congressman in Texas. In fact, most of his proposed polices call for cuts in taxes. According to those who believe in Reaganomics, these tax cuts would likely spur the economy further and end up benefiting everyone. However, there are those who would argue that such policies would only lead to an increase in the deficit--the exact opposite of Paul’s monetary policy stance.
Paul’s monetary policy stance is that we as a nation need to halt our spiral of debt, hold the Fed accountable for their actions, curb inflation and save the value of our currency. While these are worthwhile goals for the country to aspire to, the pain this process could create during the transition period would not be looked upon fondly by the general public. As Americans, we tend to favor instant gratification.
Fixing America’s monetary problems will involve some serious belt tightening on the spending side for an extended amount of time, considering our deficit. In order to curb inflation, the Fed would need to raise interest rates and stop dumping money into the system. This would likely send the financial markets into a tailspin. Based on the negative uproar from investors when Ben Bernanke dropped interest rates by only 0.25 percent at the last Fed meeting, it is unlikely that raising rates would gain popular support.
Unfortunately, most Americans prefer the easy way out and would rather have us continue to lower rates and deflate our currency, thus allowing us to pay back our debt more cheaply, while artificially increasing the markets.
Ron Paul has built his campaign on the premise that we must stop paying our economic problems forward. Paul has impressive grass roots support which, regardless of whether he wins the nomination, could indicate that financial responsibility is becoming an important issue for an increasing number of Americans.