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Ron Paul's State of the Republic Address

Part 1:


Parts 2 & 3, and full transcript below

Part 2:


Part 3:



As we start the new year 2010, the establishment politicians, economists and Wall Street are trying to convince themselves that we have turned the corner and economic growth has once again begun. The predictions that conditions are getting back to normal come from those who never saw the crisis coming and don't have the vaguest notion what caused it. Some of them concede that it could be a jobless recovery. That will establish a new definition for a recovery.

Official unemployment is at 10% but even the government knows that if everyone is counted, including those individuals that are too discouraged to even be looking for work, the unemployment rate is 17%. Free-market economists claim the actual unemployment rate is closer to 22%.

There's reason to believe that the correction is just barely started and has a long way to run. If the financial bubble came from excess credit created by the Federal Reserve, doubling the money supply can hardly be a solution. It wouldn't make much sense for a doctor taking care of a very sick patient from severe infection to deliberately give the patient another infection. Yet that's what the PhD doctors are doing to our very sick economy. It can't work. It will make the economy much sicker. If our leaders don't wake up soon, the economy will be brought to its knees. Great danger lies ahead.

In foreign policy, it's always crucial that the motives of those who would do us harm are understood. Denial of the truth and accepting more politically palatable excuses will guarantee that threats to our safety will continue as we pursue a seriously flawed involvement overseas.

It's the same in economic policy. If there's denial or ignorance of the real cause of financial bubbles and the inevitable corrections that must follow, the economy cannot be reenergized.

We should have learned the lesson from the Depression of the 1930s that it was a predictable result from the Federal Reserve's orchestrated excesses of the 1920s. Instead, the new-born Keynesian economists who took charge made certain that the correction would not be a one or two year affair as were the previous corrections in our history. The aggressive intervention by Hoover and Roosevelt, the Republicans and the Democrats, turned a short recession into the Great Depression, which lasted until the end of World War II.

The real tragedy was that the interpretation of the 1930s institutionalized bad economic theories. Unfortunately, and erroneously, the Depression was blamed on the gold standard, free markets and a lack of regulations. Though monetary policy was analyzed, its importance was 100% misinterpreted. The low interest rates and excess credit of the 1920s, driven by Federal Reserve policy, was not considered a factor in producing the stock market bubble and the mal-investment.

Instead, the 1930s analysts and even later analysis by Milton Freidman and the monetarists, along with academic "scholars" like Bernanke, came to an opposite conclusion: the Fed was at fault but only because it was too tight, arguing that massive monetary inflation was the only answer to the slumping economy.

And now we are witnessing a grand experiment by the very person who for years claimed special knowledge regarding the Depression. Chairman Bernanke is in the midst of trying to solve the problem of massive monetary inflation and excessively low interest rates instituted by his predecessor, Alan Greenspan, by implementing even more inflation at historic rates. The sad part is the answer to his very risky experiment with the wealth of our country and the health of our economy will take years to analyze. The conclusions will be just as flawed as they were in the aftermath of the Great Depression by an intellectual and political community that had totally rejected commodity money and the principle of free market with the current understanding in Washington.

One hope, though, is that free-market thinking and Austrian economic theories will have greater influence in the next decade or two, since their influence is now on a dramatic upswing. But there are a lot of hurdles to overcome.

In the 1930s, in an effort to find the true cause of the crisis, Congress ordered an official investigation. It became known as the "Pecora Investigation" named after Ferdinand Pecora, the aggressive chief council of the hearings. It received a lot of public attention and brought about many major changes but, tragically, every conclusion made and new policies implemented caused the depression to worsen and legitimized bad economic theories that continue to haunt us to this day.

The Federal Reserve was not blamed except for not printing enough money fast enough. Artificially low interest rates and mal-investment, the main source of the grossly distorted economy and bubble of the 1920s, were exonerated. Not enough regulations were blamed, thus the Glass-Stiegall Act and the Securities Act of 1933 were passed and deepened the depression. Separating commercial and investment banking and the newly created SEC were to have solved all future problems-as long as the Fed was free from any restraint in its money creation operation to serve big-government spenders and members of the banking cartel.

Since the flaws in the monetary and economic system were not corrected but made worse after the Depression, it was to be expected that periodic booms and busts would persist. The longer these cycles could be papered over with new money and credit, the greater would be the distortions and debt that would one day have to undergo a major correction.

That correction is now in its early stages. Since the dollar was the reserve currency of the world and totally fiat since 1971, without any linkage to gold, the financial bubble became worldwide. This bubble that burst in 2008 was the largest in history. During the formation of the bubble, the U.S. as the issuer of the world currency received undeserved benefits. We essentially became the counterfeiter of the world and no one called us on it. Even today, the trust in the dollar that persists has buffeted the pain of the correction for us. This unique setup was a prime cause for our balance of payment deficits and the huge foreign debt we owe-the largest in the history of the world. The discord in the world financial system is telling us that it's time for us to pay for our profligate spending and massive foreign indebtedness. We have lived, as a nation, far beyond our means and the message is, for the foreseeable future, that we will be forced to live beneath our means as this debt is paid.

The inflation optimists are excited about current signs of economic growth and have even announced the end of the recession. It is conceivable that a reprieve can be achieved and the penalty that our economy must endure delayed. A reprieve must not be confused with a pardon; one is a temporary delay, the other an exemption. The payback for our excesses is certain to come.

Massively increasing debt and monetary inflation can slow the crash and change some government statistics encouraging the optimists. But real job growth and return of prosperity will remain elusive. The odds of us once again becoming an exporter of manufactured goods, like steel, cars, and textiles, are remote.

Ironically, a reprieve may well restore some confidence and motivate some spending and investment. But instead of restoring long-term growth, it may well act perversely by precipitating price inflation and higher interest rates. Since today's interest rates are artificially set, much of our investing is unproductively misdirected.

Current enthusiasm in the stock market is once again a reflection of the message that low interest rates send. Thus too, the government's stimulus package has helped to sustain the bond bubble, which in time must be deflated in order to get back to sound economic growth. All of this activity poses a threat to the dollar.

Governments are very powerful, and when in partnership with the monetary authorities that can inflate the currency at will, big government thrives. Welfare demands and senseless wars can be financed for long period of time through inflation, as long as trust in the currency lasts. Trust, though ultimately controlled by facts, can be misleading, since currency values can gain benefit from a country that has a strong military and wealth and a reasonably healthy economy. Eventually, markets and reality overwhelm, and illusions about a currency's worth become a reality.

Today, reality is setting in and the first of three major events has begun. The worldwide financial system, built on a foundation of paper, has received the shock waves of an impending collapse.

The wild speculation and the derivatives market, the stock market bubble, the insurmountable debt-public and private-and the massive mal-investments have been shattered.

The only solution so far offered worldwide, but led by the United States, has been to "print money" faster, keep interest rates low at practically zero percent, and remove all stops for controlling deficits. These are the very policies that caused the disequilibrium, and doing more of the same, but only faster, can hardly help our economy. The addiction to easy credit and deficit defies a wise political solution. Politicians are incapable of delivering the message of frugality, common sense, and sound money.

We can expect that the course we are on to continue and accelerate, since the first event, the collapse of the financial system, is still in its early stage.

The housing crisis is far from over; the commercial property crisis has not yet gotten much attention, and the financial obligations of the government are growing exponentially. And none of this forces the slightest pause in the expanding of welfare growth. The number of regulations, which are indeed a tax, are exploding though the market was already suffering from regulatory excesses. There's a consensus in Washington that "wise" regulations can compensate for all the mistakes made by the Federal Reserve, the Executive Branch, and Congress. This fallacy has been around a long time and will be difficult to overcome.

The pessimism of the middle class continues to get worse despite the prognostication of Wall Street and the Administration. Most Americans know that the standard of living and real wages have not gone up for the past 10 years. If you're not a shrewd stock trader and instead invested in stocks 10 years ago and held on, in real terms you would have lost 20% of your savings. The middle class is poorer also because house prices have crashed and many have lost their homes. On top of this, all we hear about is the trillions of dollars of debt and entitlement obligations that have been racked up for future taxpayers to pay. When it is revealed that the insider friends of the Fed and Congress get billions of dollars in bailout at the expense of the middle class, it's no wonder the people are taking to the streets and directing their hostilities toward both Republicans and Democrats in Washington. Many would agree it's well-earned anger and properly directed.

This anger and frustration will certainly grow as the consequences of the collapse of the financial system become more severe. The concerted effort to prevent the correction the market demands, guarantees a prolonged agonizing crisis. Every effort to reverse the tide will depend on spending, higher deficits, increased taxes and money creation. This effort is now providing another grand bubble: the dollar/bond bubble.

The next event will be a dollar crisis. A full-blown dollar crisis will be worse than our current financial crisis. The extent of a dollar crisis depends on whether or not the Washington politicians wake up and change their ways-a dubious hope.

More likely, the insanity will continue until some not yet known event will undermine the confidence of the dollar worldwide. Signs of less desire by foreigners to hold our dollars are already present. I'm certain our Treasury and Federal Reserve are pulling out all stops to prevent a massive run on the dollar. At present the "orderly" retreat from the dollar is working. But it won't last.

China is quite active in investing in natural resources around the world, and including in Iran. While we live in the dark ages and believe only our military presence and military threats can protect our access to oil, China is actually spending some of their savings investing in their future access to energy and other precious metals and minerals.

But the orderly retreat from the dollar won't last forever. Since 1973, shortly after the breakdown of the Bretton Woods Agreement, the dollar has lost 32% of its value against a Federal Reserve basket of currencies. But that doesn't tell the real story, since that is a measurement against all other currencies, and they are fiat currencies as well. This gave the dollar an artificial benefit from its position of power in great wealth and military prowess. The dollar in relationship to gold, however, is down 97% since 1971, and 82% as measured by the CPI. The dollar, mismanaged by the Fed, has not been a benefit to the savers who sought to responsibly take care of themselves. They've been cheated by a rotten system and are just beginning to understand exactly how the Federal Reserve has been responsible for the swindle.

It is impossible to predict the time when confidence will be lost, but it can come quickly. Resorting to buying other paper currencies will not be of much help. When the dollar crashes, most likely the purchasing power of all currencies-since all countries hold dollars as a reserve-will go down as well.

This means that dollars and other currencies will go into buying consumer items, precious metals and other physical properties. Consumer prices will soar, as well as interest rates. The central bank will lose control; and the more they inflate, the worse the confidence becomes. The interest rates will respond to these efforts by rising sharply.

If the Fed tries to reverse the run on the dollar, interest rates will also soar, and the pain on the American citizens will be of such proportion that political chaos will result. Either scenario leads to political and social chaos-the third event, and the most dangerous.

With no ability of the federal government to fund its commitments, international or domestic, major changes will occur in our system. The social unrest will elicit cries for government to exert unusual force to head off a complete breakdown of law and order. The ultimate trap will be set for a system of government claiming to protect a free society. If more power and police authority are not given to the federal government, it will be argued that only anarchy will result. If more government policing power is given, it will mean a lethal threat to civil liberties. Already we have permitted the notion that a single person, the Attorney General or President, can decide who is an "enemy combatant", thus denying that individual the right to habeas corpus, permitting indefinite detentions without charges made. This attitude toward civil liberties has changed significantly since the fear built around 9/11.

Yes, I know declaring one an "enemy combatant" is reserved for the radical Muslims engaged in terrorism against the United States. To be reassured by this reasoning is quite dangerous and naïve. Logic should not lead us to equate suspects with terrorists, and include American citizens, and yet this has already been set by precedent. Under difficult circumstances, our political leaders will not be hesitant to use these powers to maintain order. Tragically, the people may even demand it.

We are rapidly moving toward a dangerous time in our history. Society as we know it is vulnerable to political and social chaos.

This impending crisis comes as a consequence of our flawed foreign and domestic economic policies, a silly notion about money, ignorance about Central Banking, ignoring the onerous power and mischief of our out-of-control intelligence agencies, our unsustainable welfare state, and a willingness to sacrifice privacy and civil liberties in an attempt to achieve safety and security from an inept government. Dangerous times indeed!

What can be done about it? Must we wait for the inevitable and expect to restore our liberties in a street fight against the overwhelming power of the state? Not a good option!

The only way that we can prevent blood from running in the streets is to offer a better idea of the proper role of government in a society that desires first and foremost -liberty.

And that is impossible without a firm commitment by our thought leaders to the ideas of freedom, the source of all creative energy and prosperity. An all-powerful state is the threat to that ideal.

The prevailing attitude of the people-as it once was in early America-must be that of liberty and self reliance, rather than the nanny state and dependency relying on government force to mold all private choices.

If this is understood, a smooth-although not painless-transition to a free society is achievable. Ignoring this option will be very destructive to everything that is dear to the hearts of most Americans.

What is it that we must do? We must immediately:

• Balance the budget by reducing spending
• Change our foreign policy to that of non-intervention
• A full audit and more supervision of the Federal Reserve leading to abolishing the Federal Reserve
• Legalize competition to the Federal Reserve with competing currencies
• Regain respect for civil liberties and privacy while reigning in the CIA
• Wean ourselves off the dependence of wealth transfers by government
• Abolish crony capitalism-no subsidies, no bailouts, no regulatory or tax privileges to protect the powerful elite, especially the military industrial complex
• Eliminate the income tax, inheritance tax and taxes on savings and dividends.

None of this can happen without the restoration of Congress to its dominant position of the three Branches of Government as was originally intended by the Constitution. The Executive and Judicial must be reined in, and Congress must assert its prerogatives over all legislation curtailing all unconstitutional agendae through budgetary controls.

Signs abound that angry Americans are now more ready than ever before for a change in direction that is indeed real. If this program were improvised-even suddenly and dramatically-the adjustment, though significant and to a degree somewhat painful, would be much shorter and of minor consequence compared to the chaos and poverty that will result if we refuse to change our gluttonous appetite for a free lunch.

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For an absurd Presidential speech the other night. I am interested to hear that all combat forces are presumed to leave Iraq by August. A promise I hope is kept. Then again GITMO is still open, no response to that last night. How many civilians will be left behind or "non-combat personnel"? How bout the embassy in Baghdad?

Now the Lord is that Spirit: and where the Spirit of the Lord is, there is liberty.
www.yaliberty.org - Young Americans for Liberty
www.ivaw.org/operation-recovery - Stop Deploying Traumatized Troops

Reading both addresses...

I kept thinking...

Paul's address = Gods of the Copybook Headings

O'Bama's address = Gods of the Market Place


Joη's picture


Great connection.

Kipling is awesome!

"You underestimate the character of man." | "So be off now, and set about it." | Up for a game?

I wish the O-bots could hear this message

This is Ron at his finest. We need to continue to fight the good fight.

Ron Paul is my President.

reedr3v's picture

Why is that pretender's speech

all over the media tonight instead of my president's State of the Republic speech?

You said it.

The above is my president's speech.

Thank Heaven for Ron Paul!

Thank Heaven for Ron Paul! I'm so glad that we have someone who's well-versed in economics and is willing to speak out against the policies that the Obama administration is pursuing. Hopefully Dr. Paul can get enough support to put a major mark on the map and prevent a hyperinflationary holocaust from occurring before it's too late.

After Obama's speech, tonight

watch what should be the true Republican Rebuttal with Dr. Paul's State of the Republic. Maybe Ron is practicing for 2012.

Dr. Ron Paul's redress to Barack the O'Bomber's SOTU address

[the 3 piece suit is the uniform of the biggest,baddest,boldest,evilest criminals and gangsters in the world..the international banksters]
"well..yes it is as a matter of fact..it represents liberty and freedom and taking back the republic of these United States from the death grip now held by banksters over the people and returning the republic to its rightful owners".."we the people"
gladly!..how about making it an even 50? for the 50 SOVERIGN states of these United States that are going to abolish the private unconstitutional un-federal no-reserve banking system!

randy n.

Joη's picture


Somebody put an appropriate message above this one so those who seek rebuttals tonight don't see this first.

"You underestimate the character of man." | "So be off now, and set about it." | Up for a game?

He's getting ready for 2012

Ron Paul speaks from the heart always but...

This time, he's using a script (written by him I'm sure). Did you notice the camera angle changes? Did you notice it's not his usual open commentary?

For example: Do you remember his question to John McCain on the Presidents Group on Working Markets

I'm shouting.

He schooled McCain, but hardly any American knew it.

I like the direction he's taking. Thank God for the good judgment of Dr. Paul.

I agree,

Kyle. Dr. Paul does need to choose his words carefully so that they do NOT go over the average person's head. I was happy to hear this from the speech, which in my opinion, is short, simply-put, and to the point:

"...If the financial bubble came from excess credit created by the Federal Reserve, doubling the money supply can hardly be a solution. It wouldn't make much sense for a doctor taking care of a very sick patient from severe infection to deliberately give the patient another infection. Yet that's what the PhD doctors are doing to our very sick economy. It can't work. It will make the economy much sicker. If our leaders don't wake up soon, the economy will be brought to its knees. Great danger lies ahead..."

O.P.O.G.G. - Fighting the attempted devolution of the rEVOLution
Ron Paul 2012...and beyond

Debbie's picture

Obviously it was his script, nobody could ever write for him,

and I think he read it due to it's length.


I always preferred this one:


You have to watch until the end to get it... :-)

I often wonder

if people in Paul's organization aren't sabotaging him, as we know they did during the presidential run....This is excellent content, of course, but fourth rate delivery and production.

Compare it to the recent CNN piece, and how effective and compelling that was. I have no background in film-making, but I know I could use that and similar pieces as references and direct and edit this commentary so RP and his message came across well to the people who need to hear it.

Why leave the mis-reads and awkward spots. Why? There are probably literally ten thousand tech-savvy supporters who could make this video a winner and who would happily do it for free.

Nothing is stopping anyone from pulling the video off the net

and editing it together in a more dynamic presentation. If people want better graphics and cuts this can easily be done. Please take out him rubbing his face in between paragraphs as well. Why was that left in?
I think the message comes across regardless and at least it is far more Presidential than Bobby Jindahl and State of the Union bedtime story retort response.

Now the Lord is that Spirit: and where the Spirit of the Lord is, there is liberty.
www.yaliberty.org - Young Americans for Liberty
www.ivaw.org/operation-recovery - Stop Deploying Traumatized Troops

Joη's picture

yeah, but how do you edit in all the

missing text?

Coallate all past instances of Dr. Paul saying those words?

Just flash the text up there with a "scene missing" note?

Cut out the whole paragraph?

"You underestimate the character of man." | "So be off now, and set about it." | Up for a game?

The last option

Less words, more impact, maybe video clips interspersed with the words like in the CNN piece.

News Tip, baby

Send a link to part 1 as a news tip to D RUDGE. The submission form is about 2/3 down the right hand side of the page. This is seriously the State of the Republic(Union) address that We, the People are not hearing!

Debbie's picture

Yes, this is the REAL state of the Union! Thank you Doc!!!

This is my favorite part: "The prevailing attitude of the people-as it once was in early America-must be that of liberty and self reliance, rather than the nanny state and dependency relying on government force to mold all private choices."


This is why I love Ron Paul!

Thank you, Michael for posting the transcript to this.

"Hence, naturally enough, my symbol for Hell is something like the bureaucracy of a police state or the office of a thoroughly nasty business concern." ~~C.S. Lewis
Love won! Deliverance from Tyranny is on the way! Col. 2:13-15

Does anyone know who this producer is?

I've got a few suggestions I'd like to share with them:

I think Dr. Paul should've been seated at a desk - I did not like his posture - it looked like his hands may have been resting on something, which gave him a bit of a hunched appearance.

I think it should have been filmed a bit closer up.

I think he should have had some kind of salutation at the end... Just an idea:
Together we can save this great nation... Thank you for listening.

I think they should redo it in one video, This would be enormous after the state of the union.... Remember Jindal?!!! People will be clamoring for a powerful rebuttal. Most of the people who need to hear this (and to whom I want to send it) do not have the attention span to watch three videos.

Just my two cents, submitted humbly.

Joη's picture

agree 1200%

This up to us, though.

Never mind the missing text!

"You underestimate the character of man." | "So be off now, and set about it." | Up for a game?

State Of The Republic

I watched this as it went up.

As I did I wondered who would seriously listen to this message. It is long and disconnected because it is in three parts. However, I am hopeful that if sent out at the right time, it can be confused for the Republican response to the President. People will listen for that reason alone. I also thought that maybe I'm tuning him out because he is saying the same things I've heard from him for years and its depressing. The last part however provides solutions to the problems and it is new to many. Maybe to a new ear Paul's message will ring loud and clear. I don't think we need to have the message dumbed down if people like us are around to touch up the rough and lofty edges in the comments. We need people who know what they are talking about, articulate, and educate at a much higher level, bringing those around them up rather than catering to their continued ignorance of what is going on. Lets give this a chance.

Now the Lord is that Spirit: and where the Spirit of the Lord is, there is liberty.
www.yaliberty.org - Young Americans for Liberty
www.ivaw.org/operation-recovery - Stop Deploying Traumatized Troops

This is very presidential!

This speech of Paul is done very very well; and it should reach as many people as possible. Fantastico!

"Air is the very substance of our freedom, the substance of superhuman joy....aerial joy is freedom."--Gaston Bachelard--

I Said the Same Thing!

He looks very presidential here. He will always be my President.


This is one of Ron Pauls most professional productions. Well Done! Good shots and changing in camera angles.
However you could see he was reading and had a monotone voice like a professor and my mind turned off.

Twitter: https://twitter.com/#!/youownyou (quotes)
Website: http://www.own-yourself.com

Content should be more important than delivery.

Yes, I noticed him reading too and at times it even seemed he was bored, but it really is the content that is most important. You're getting the truth.

Quite the opposite, Barack Obama is a great speaker and may be more interesting to watch, but the content of his speeches are false promises, lies, deception, and ignorance.

I would rather hear the boring truth from a president than well delivered deception. Actually, I would rather have the boring truth from anyone, over deception.