

GUY RAZ, host:

Now, one of the strongest opponents of government intervention in reforming the health-care industry is congressman Ron Paul, Republican of Texas. He's known to some as Dr. No for his opposition to tax hikes and refusal to vote for spending bills.

He's a doctor by training, an OB-GYN, and he's written a new book. It's simply called "End the Fed," as in the Federal Reserve.

I spoke with Ron Paul earlier. We started with health care, which he doesn't believe is a fundamental right.

Representative RON PAUL (Republican, Texas): I do not believe people's needs or desires or wants or demands are rights. Once you do that, you embark on a system of government that is uncontrollable.

You have a right to your life, your liberty, and you should have a right to keep what you earn. So I do not believe medical care is a right, and that's one of the problems that we're facing today and why there's so much confusion in what we ought to do about health care.

RAZ: Congressman Paul, yesterday on this program we spoke with Oregon Senator Ron Wyden. He's a Democrat. Like you, he opposes a government-sponsored health-insurance plan. Here's what he's proposing: He wants a market-based solution, an exchange, that would have all insurers compete for your business and mine. But unlike the current plans floating around Capitol Hill, Ron Wyden would allow everyone to take part in that. Would you back something like that?

Rep. PAUL: Well, from what you told me, that sounds like I should certainly think about it, but sometimes when they're offered in that frame of mind, it means sometimes that they force you to participate.

RAZ: Under the Wyden plan, and to some extent under the Baucus plan currently circulating in the Senate, health insurance would be a mandate. People would be - most people would be required to buy it.

Rep. PAUL: Yeah, and that's - that wouldn't be something that I could support because once the government gets in and either mandates something or regulates it or subsidizes it, it's no longer insurance.

If they want to call that a social welfare program, they would be more honest, but they shouldn't ever use the word insurance. Insurance is a market phenomenon. When you buy something and somebody's paid to measure risk, like life insurance, people understand that.

This whole idea that anybody that has - already has a condition can demand insurance is sort of like saying, well, your house is burning down, and you go to the insurance - and say hey, my house is on fire. Can I buy insurance? Everybody knows it doesn't work that way.

And we here on the coast in Texas, if there's a hurricane in the Gulf, we can't go out and buy insurance. Otherwise, the insurance companies would all go broke, and the government would have to bail them out. If you want better care and cheaper care and more care for more people, you have to look to the market for the distribution.


Rep. PAUL: Well, about opposite of what we should expect when we go to total government, and we have a pretty good record of showing what we did in this country up until the 1960s. I recall working in a church hospital for $3 an hour, and nobody was ever turned away, and nobody was left out in the streets, and just think of all the church hospitals that have been closed down because the invasion of government into the health-care industry.

RAZ: But who would pay for them?

Rep. PAUL: Well, who pays for the Shriner hospitals? Charity takes care of it, the churches take care of it. When government takes care of it, the bureaucrats get paid, and the insurance companies become the lobbyists, the drug companies become the lobbyists, the management companies become the lobbyists. Doctors get squeezed, the patients get squeezed.

You can't put all these corporations in between the doctors and the patients. You'd have a form of corporatism, which motivates the type of system that we have now, and it's not any better.

Some worry that Obama would give us socialized medicine, but he isn't. He's giving us a continuation of corporatism. He's forcing people to buy insurance. The insurance companies love it. They love to see 20 or 30 million more people being forced into the system, and they will have more customers.

RAZ: Ron Paul, let's move on to your book now, "End the Fed." You want to replace the Federal Reserve with a money system that would be backed by gold or other commodities. Is that right?

Rep. PAUL: Yeah, basically I want to follow the Constitution, and that's what the Constitution says.

RAZ: Many economists disagree on how the government should have dealt with the financial crisis last year, but most of them now concur that the Federal Reserve's intervention worked to some extent. How would it have worked if there was no Federal Reserve?

Rep. PAUL: Yeah, and the people who are saying it's worked fine — and Bernanke says the recession is over — are the same people who never saw it coming and never predicted it.

RAZ: Well, we talked to Nouriel Roubini, one of the economists who did, and he agrees with most of the other economists on this.

Rep. PAUL: What, that everything is OK?

RAZ: Not that everything is OK, but that the government intervention essentially stabilized the markets.

Rep. PAUL: Well, to some degree that has happened, and you could argue that case and make the point that since 1971, yeah, we've had some dips, but the government always came in and bailed them out, printed more money and spent more money, and the recessions were held to one year or two year. But what that does, it sort of patches over the leak in the bubble but makes a bigger bubble.

RAZ: If there was no Federal Reserve, and we had the economic crisis that we had last fall, what would have happened today? Where would we be now?

Rep. PAUL: Most of it would be behind us in a real sense. The best way to understand this would be to understand the depression of 1921. The Federal Reserve came in in 1913, and quickly they became great inflators to pay for a World War I that was absolutely unnecessary for us to be involved in.

But that inflation had to correct. They still believed that you should have hands off and not, you know, continue to print a lot of money. And the boom was there from the wartime boom. They took hands off, and one year it was over. And it was a big, serious crash, but nobody remembers about it because it was over in a year.

So the answer to your question is, if we'd have done more like 1921, allowed not only Lehman's to go broke, how about AIG? And how about Goldman Sachs? All the correction that is necessary has been delayed, and so many bad debts have been passed off to the taxpayers now because the Federal Reserve has bought these. And this is why they don't want us to know. This is why they won't permit an audit - is because we're going to find out too much of the shenanigans that are going on behind the scenes.

RAZ: Ron Paul, you have tapped into a deep well of anger that is out there in this country, but I'm wondering whether you are at all uncomfortable with some of the more extreme statements, posters and signs that we've seen from some of the anti-government protesters in recent weeks; for example, posters that read: Bury Obamacare with Kennedy. We saw them here in Washington, D.C., last weekend. Are you uncomfortable with those lines?

Rep. PAUL: Yeah, I'm uncomfortable, but I don't have control over people. I have control over what I think and do and say and vote, and that's the best I can do. And I can make suggestions. And you know, and I know people are thinking along those lines and accuse people of things. And then the people on the other side will use the same type of language condemning them. So I don't like that. I like to stick with the issues of the marketplace and sound money and limited government, and what rights actually mean. That's the only way we can get to the bottom of these problems.

RAZ: Congressman Ron Paul represents the 14th District of Texas. His new book is called "End the Fed." He joined us from his hometown in Clute, Texas.

Congressman, thanks for your time.

Rep. PAUL: Thank you very much.

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