During an interview on economics last week, 2016 GOP presidential candidate Ben Carson raised questions about U.S. monetary policy and said that as president he would not authorize any government spending increases.
Outlining his government spending policy, Carson told Marketplace:
[pull_quote_center]If we simply refuse to extend the budget by one penny for three to four years, you got a balanced budget. Just like that. So this is not pie in the sky, very difficult thing to accomplish. Having said that, one of the bugaboos that has kept us from reducing government in the past is sacred cows. What I would do is first of all, allow the government to shrink by attrition. Don’t replace the people who are retiring, thousands of them each year. And No. 2: Take every departmental head, or sub-department head and tell them, ‘I want a 3 to 4 percent reduction.’ Now anybody who tells me there’s not 3 to 4 percent fat in virtually everything that we do is fibbing to themselves.[/pull_quote_center]
When Carson was asked by Marketplace host Kai Ryssdal whether he would support now-routine increases to the U.S. debt limit, he replied, “Let me put it this way: if I were the president, I would not sign an increased budget. Absolutely would not do it. They would have to find a place to cut… I would provide the kind of leadership that says, ‘Get on the stick guys, and stop messing around, and cut where you need to cut, because we’re not raising any spending limits, period.’”
He added, “I mean if we continue along this, where does it stop? It never stops. You’re always gonna ask the same question every year. And we’re just gonna keep going down that pathway. That’s one of the things I think that the people are tired of.”
Carson then raised questions about America’s fiat monetary system and said that it enables out-of-control spending:
[pull_quote_center]Now the only reason that we can sustain that kind of debt is because of our artificial ability to print money, to create what we think is wealth, but it is not wealth, because it’s based upon our faith and credit. You know, we decoupled it from the domestic gold standard in 1933, and from the international gold standard in 1971, and since that time, it’s not based on anything. Why would we be continuing to do that?[/pull_quote_center]
Responding to a question asking him to pinpoint the gravest issue facing the U.S. economy, Carson said, “I think our debt is horrendous. You know, one of the things that happens with this level of debt is that it’s very difficult for the Fed to raise interest rates. And why is that such a problem? Well it used to be that Joe the Butcher would take 5 percent of his earnings every week and put it into a savings account. And he would watch that grow over two, or three, or four decades. And by the time he was ready to retire, he was in good shape. Now, poor people and middle-class people really don’t have a mechanism to grow their money. The only people who can grow their money are people who have a certain risk tolerance. And those tend to be upper-income people who can utilize the stock market.”
Noticing what appeared to be Carson’s anti-Federal Reserve rhetoric, Ryssdal asked him to comment specifically on the Federal Reserve and its chair Janet Yellen. Carson balked at the chance to criticize either directly and said, “Well, you know, I’ve known Janet Yellen for a long time. We’ve served on boards together, and she’s a very intelligent individual, very responsible, and obviously is trying to do what she thinks is right. But she’s caught between a rock and a hard place, and I understand that. And that’s why I would tend to really put the emphasis on driving down our debt, because that’s how we begin to correct the problem. You know, unless we correct the fundamental problems, all the other stuff we’re doing isn’t going to matter that much.”
Carson also said that early wealthy American industrialists built the foundation for America’s economic engine. “You know, the Europeans, they looked over here and they saw the Rockefellers, and the Vanderbilts, and the Fords, and the Kelloggs, and the Carnegies, and the Mellons, and they said you can’t run a country like that. You’ve gotta have an overarching government that receives all the funding and equity that redistributes it, so we actually inspired socialism.”
“But all of those people that I just mentioned,” Carson continued, “they didn’t just hoard money and pass it down from generation to generation, they built the infrastructure of our country. They build the transcontinental railroads and seaports and textile mills and factories that enabled the development of the most powerful and dynamic middle class the world has ever seen, which rapidly propelled us to the pinnacle,” he said.
Commenting on Carson’s questioning of America’s fiat currency system, Washington Post writer Matt O’Brien implied that the retired neurosurgeon is not a “candidate of serious policy,” criticized the concept of a gold dollar standard, and defended the Federal Reserve’s manipulation of interest rates.
Mises Institute’s Ryan McMaken then challenged O’Brien’s critique of Carson on the issue. “Without a hint of irony, O’Brien suggests that interest rates guided by the market simply lack the wisdom of our current PhD Standard,” said McMaken.
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