What sets Ron Paul's economic philosophy apart?

Presidential hopeful Ron Paul has stood out for his throwback economic philosophy.

Jeremy Hobson: Well we're just a little more than a week away from the Iowa caucuses. And one GOP candidate who's been gaining steam in Iowa heading into the home stretch is Texas Congressman Ron Paul. As part of a series of conversations
about the candidates economic ideas, we're going to talk Paul-onomics now with Kevin Hassett. He's director of economic policy studies at the conservative think-tank the American Enterprise Institute. He's with us now from Washington. Good morning.

Kevin Hassett: Good morning.

Hobson: Well first of all, just give us an overview of Ron Paul's economic philosophy.

Hassett: Yeah. Ron Paul's economic philosophy is kind of a throwback philosophy -- he wants to go back to the 19th century of how we ran the country. So he wants to repeal the 16th Amendment of the Constitition; he wants to have free trade; and wants a really, really small government.

Hobson: How do you think that the economy would be different in this country if Ron Paul actually did the things that he wants to do? I can think of, for instance, he wants to get rid of the Federal Reserve, right?

Hassett: Yeah, that's right. And that's one of the things I have the most trouble with. Ron Paul is for going back on the gold standard, and that's a really cockamamie scheme. There's no government left on earth that thinks that way about monetary policy. And I think that going back to the gold standard would make it so that if all of a sudden somebody finds some gold somewhere, then we've got inflation; or you're shipping some gold across the ocean and the ship sinks, then you know, goes the other way. There are a lot of strange things that happen if you're on the gold standard.

Hobson: There are going to be some people who hear this interview and maybe they're Ron Paul supporters, and they will say, 'Oh listen to this Kevin Hassett; he's just an establishment Washington guy at the American Enterprise Institute. He just doesn't want Ron Paul, this outsider, to come in and make real change.'

Hassett: I think that that's really false. The fact is, Ron Paul has some good ideas -- I like the fact that he supports the fair tax. But he also proposes things that are really based on a misreading of modern economics, I think, and sometimes even a misreading of the Constitution. So that's a strong reason to oppose, I think, the really strange set of policies that make up the Ron Paul platform.

Hobson: Kevin Hassett is director of economic policy studies at the American Enterprise Institute. Kevin, thanks.

Hassett: Thanks a lot.

Hobson: And you can find the economic ideas of all the candidates. Check it out.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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