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Educate me on Ron Paul's theories

Dabljuh

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I came accross Ron Paul's maybe a year or so ago. As I do have an economics background and my specialty being monetary systems, I could assess what he says. Since I'm not living in the US, (you may have noticed I write with an accent) I however know fairly little actually about him.

With this thread, I'm going to give ronpaulites the chance to convince me with good arguments that anything Ron Paul says has merit.

My current positions:

Basically I consider fractional reserve banking to be harmless or beneficial to society as it creates localized flexibility on the localized money supply, acting as a buffer if in a subsection (a town, or a small grid of interlocked market participants) money supply threatens to run dry.

Gold backing is one of the worst ideas ever. There's not only simply not enough gold to keep even a small country's economy fueled, and gold has other properties that make it highly undesireable with the common good in mind.

Ultimately I think he's at the right ball park - There's some issues with the way the central banks handle their currencies that can only be resolved on the national scale. But attacking fractional reserve and fiat money aren't.

Since I love conspiracy theories, I figure he was sent by "the man" to keep gullible people who want a more just economic system barking up the wrong tree. But then again, many people may really be that dumb.
 
I never heard that Dr. Paul is considering 100% "Goldbacking". His idea
is to support the Dollar via gold reserves. I'm pretty sure that he knows
that full gold backing would be catastrophically inflexible.

Anyway - my geo-economical knowledge is a catastrophe as well. :D
You might ask at Ronpaulforums.com, they discuss this all the time
with noobs.

Oh, and your accent is horrible :D - where are you from?
 
My understanding is that his plan is to not tax exchanges of commodities like precious metals (I'm not sure it is limited to precious metals) as purchases in and of themselves so they can be used as a medium of exchange by those who want to. The idea is that if inflation gets out of hand, more people would turn to commodities as a medium of exchange, providing an incentive for the central bank to keep inflation under tighter control in the face of competition against federal currency (under inflation, the demand for reserve notes would decrease). It would also work against deflation, as people would prefer bank-issued currency under that circumstance and the demand for those notes would increase. Although economics is a strong interest of mine, I'm not an economist, so with that caveat, in my opinion, allowing commodity exchange in this fashion would be a stabilizing influence on US currency without paralyzing it. For example, the currency supply should still be able to increase in proportion to economic growth.
 
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Mister Agenda said:
My understanding is that his plan is to not tax exchanges of commodities like precious metals (I'm not sure it is limited to precious metals) as purchases in and of themselves so they can be used as a medium of exchange by those who want to. The idea is that if inflation gets out of hand, more people would turn to commodities as a medium of exchange, providing an incentive for the central bank to keep inflation under tighter control in the face of competition against federal currency (under inflation, the demand for reserve notes would decrease). It would also work against deflation, as people would prefer bank-issued currency under that circumstance and the demand for those notes would increase. Although economics is a strong interest of mine, I'm not an economist, so with that caveat, in my opinion, allowing commodity exchange in this fashion would be a stabilizing influence on US currency without paralyzing it. For example, the currency supply should still be able to increase in proportion to economic growth.
Click to expand...

Actually it seems to me that this would destabilize the currency. Under inflation the demand for reserve notes would decrease meaning the price would decrease, meaning further inflation. Under deflation the demand would increase meaning the price of money goes up, and that means more deflation.
 
Ron Paul believes that your state should be making laws about things like abortions and its not in the scope of the federal government. So he supports freedom for everyone except people in the deep southern states and Utah.
 
corplinx said:
Ron Paul believes that your state should be making laws about things like abortions and its not in the scope of the federal government. So he supports freedom for everyone except people in the deep southern states and Utah.
Click to expand...


No, he supports Freedom and Democracy based on the majority
of opinion. To say that the federal legislation is above the local
one is less democratic than Ron Pauls stance - thanks to the
differing opinions all across the states.

(Which isn't surprising to me at all in such a large country as
the United States)
 
As opposed to virtually every other candidate Ron Paul has written in great detail about nearly every one of his political and economic position and takes some trouble to explain why he holds the views he does. These documents are not difficult to locate. Read them, understand them and then disagree.
 
It's worth dwelving into Ron Paul's views regarding church/state seperation. He fully believes there is no such thing.
 
Well, basically dropping the currency monopoly is nothing bad by itself. It may increase inflation of the state's currency slightly, as the demand for that currency dropped, but that's about it. However something like that wouldn't save the dollar.

But what's this nonsense about fractional reserve banking and the secret rule of the jewish bankers?
 
billydkid said:
As opposed to virtually every other candidate Ron Paul has written in great detail about nearly every one of his political and economic position and takes some trouble to explain why he holds the views he does. These documents are not difficult to locate. Read them, understand them and then disagree.
Click to expand...


So which other Candidate is talking about the economy as
well despite Paul? Who is your favorite to solve those problems?
 
Checkmite said:
It's worth dwelving into Ron Paul's views regarding church/state seperation. He fully believes there is no such thing.
Click to expand...


Source? (No Alex Jones/Fox/WWN-like agenda-sites, please!)
 
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corplinx said:
Ron Paul believes that your state should be making laws about things like abortions and its not in the scope of the federal government. So he supports freedom for everyone except people in the deep southern states and Utah.
Click to expand...

The thing is, he MIGHT be right. If he's really going strictly constitutionalist, it MAY be a state's right. For damn sure its position as a matter of "privacy" leaves it open to attack anyhow. I would rather see someone try to move it to a first amendment issue, then it could truly be a federal issue with federal protection.

I was pretty dismayed when I actually read into it that I had been attacking Ron Paul for a position he didn't actually, hold, just one the media had assigned to him
 
pipelineaudio said:
The thing is, he MIGHT be right. If he's really going strictly constitutionalist, it MAY be a state's right. For damn sure its position as a matter of "privacy" leaves it open to attack anyhow. I would rather see someone try to move it to a first amendment issue, then it could truly be a federal issue with federal protection.

I was pretty dismayed when I actually read into it that I had been attacking Ron Paul for a position he didn't actually, hold, just one the media had assigned to him
Click to expand...


To me it's quite funny to see people arguing against the constitution.
Especially the ones ignoring the fact that it's is the basic law of the
United States by declaring it as an "irrelevant, old piece of paper"... :D
 
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Dabljuh said:
I came accross Ron Paul's maybe a year or so ago. As I do have an economics background and my specialty being monetary systems, I could assess what he says. Since I'm not living in the US, (you may have noticed I write with an accent) I however know fairly little actually about him.

With this thread, I'm going to give ronpaulites the chance to convince me with good arguments that anything Ron Paul says has merit.

My current positions:

Basically I consider fractional reserve banking to be harmless or beneficial to society as it creates localized flexibility on the localized money supply, acting as a buffer if in a subsection (a town, or a small grid of interlocked market participants) money supply threatens to run dry.

Gold backing is one of the worst ideas ever. There's not only simply not enough gold to keep even a small country's economy fueled, and gold has other properties that make it highly undesireable with the common good in mind.

Ultimately I think he's at the right ball park - There's some issues with the way the central banks handle their currencies that can only be resolved on the national scale. But attacking fractional reserve and fiat money aren't.

Since I love conspiracy theories, I figure he was sent by "the man" to keep gullible people who want a more just economic system barking up the wrong tree. But then again, many people may really be that dumb.
Click to expand...
Dabljuh, I'm surprised to hear you ask this question.

Ron Paul has stated in the past that he agrees with Austrian economics, as taught by Mises and Rothbard. The Austrians don't necessarily support a gold standard, but tend to support competing monetary systems established by the private sector (pretty crazy, huh?). They are sympathetic to the gold standard, though, and support it over fiat, because they believe it would limit the ability of government to act.

More on Austrian economics:

"Austrian economics," isn't seen by modern economists as a legitimate school of economics, but as a historical school of economics that has modern heterodox adherents, the same as with Marxism.

Austrian economics can be summarized: The only statements that can be made about economic behavior must be said about individuals because only individuals engage in economic behavior (methodological individualism). However, human beings can't be studied scientifically through observation because they're too complex and too self-conscious. Therefore, all economics should be founded upon essentially Libertarian philosophy about the nature of individual human action (this methodology of theirs is called "praxeology"). Any praxeological conclusions are universally valid for all people.

For more, see this site:
http://mises.org/

You can also debate with them on their forum:
http://austrianforum.com/

The core of Austrian economics can be understood by reading "Human Action" by Ludwig von Mises and "Man, State, Economy" by Murray Rothbard.

For an understanding of their view of monetary policy, see "What Has Government Done to Our Money?" by Murray Rothbard.

I tend to look at Austrian economics as being like bizarro-Marxism. They frame economics with poor assumptions -- like methodological individualism (as opposed to the Hegelian dialectic) and subjective theory of value (as opposed to the LTV) -- and therefore come up with a dubious "proof" for their utopian idealistic society, which is a highly efficient and practical economy that's totally unregulated, probably even without any government, as opposed to a highly efficient and practical economy that's run entirely by the state.

Finally, although the Austrians can be considered "Liberals," for their support for individual rights and freedom, their capitalist extremism (if they could even be called "capitalists") laid the groundwork for Fascism in Austria, as Fascism in Austria was later defined as a combination between radical economic liberalism and nationalism. Even today, Austrians have a cult of personality around Mises, and have an "Us vs. Them" mentality, which makes them feel the need to be intellectually dishonest in order to spread the movement. Once again, the Marxist parallels become more clear.

They issue a "scholarly" journal: the Journal of Libertarian Studies. Their articles tend to be rather conflated, often taking credit for others' accomplishments, while misinterpreting other fundamental economic concepts, outright incorrect facts, and an overabundance of citations so as to make their articles seem more scholarly.

Even fellow Libertarian economist Bryan Caplan, who is a Neoclassical economist, has attacked the school for being pseudoscientific, and for not laying enough groundwork in economics to be considered a distinct school:

http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm
 
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Just to clear up the issue about Paul's position on the gold standard.

"Paul says he 'wouldn't exactly go back on the gold standard,' but would push to legalize gold and silver as legal tender and remove the sales tax on them, so that gold-backed notes (or other types of hard money) and digital gold currencies can compete on a level playing field with fiat Federal Reserve notes, allowing individuals a choice whether to use 'sound money' to protect their purchasing power or to continue using fiat money."

Source: Wikipedia


 
Kerberos said:
Actually it seems to me that this would destabilize the currency. Under inflation the demand for reserve notes would decrease meaning the price would decrease, meaning further inflation. Under deflation the demand would increase meaning the price of money goes up, and that means more deflation.
Click to expand...

The supply of fiat currency is arbitrary (see Zimbabwe) in the sense that you can pretty much issue as much as you want, so there's no reason for the central bank to issue more money when it is devalued or less money when it is overvalued.
 
Checkmite said:
It's worth dwelving into Ron Paul's views regarding church/state seperation. He fully believes there is no such thing.
Click to expand...

I strongly disagree with him about that, but it doesn't distinguish him much from some of the other Republican candidates. At least he believes in evolution.
 
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