- uploaded: Mar 6, 2012
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Ron Paul on gas prices:
Before the U.S. House of Representatives, May 2, 2006
"...We must remember that prices of all things go up because of inflation. Inflation by definition is an increase in the money supply. The money supply is controlled by the Federal Reserve Bank, and responds to the deficits Congress creates. When deficits are excessive, as they are today, the Fed creates new dollars out of thin air to buy Treasury bills and keep interest rates artificially low. But when new money is created out of nothing, the money already in circulation loses value. Once this is recognized, prices rise-- some more rapidly than others. That's what we see today with the cost of energy.
Exploding deficits, due to runaway entitlement spending and the cost of dangerous militarism, create pressure for the Fed to inflate the money supply. This contributes greatly to the higher prices we all claim to oppose.
If we want to do something about gas prices, we should demand and vote for greatly reduced welfare and military spending, a balanced budget, and fewer regulations that interfere with the market development of alternative fuels. We also should demand a return to a sound commodity monetary system."