Ron Paul Tells Fox’s Neil Cavuto that Default is “American Tradition”

Ron Paul gave Fox News’ Neil Cavuto the latest in a series of Republican presidential campaign advertisements, posing as interview, today as the nation waited to see Congressional leaders gather with Pres. Obama in the White House Cabinet Room. While Cavuto labored to spin the issue toward a Tea Party interpretation of reality, Mr. Paul made the astonishing claim that the least damaging outcome of the debt ceiling negotiations would be a national default.

He then went on to claim that his view represents “American tradition”. While Paul is often a credible and passionate voice in the wilderness, defending individual liberties against the encroachment of modern government and corporate tendencies, his claim that great nations “always default” when they get to a place where default is possible, or that it is American tradition to let entire government agencies collapse, for failure to negotiate a responsible solution, is unfounded and reckless.

When Ron Paul attempted to explain that part of his appeal to independent voters is related to his revulsion to departures from American civil liberties traditions, such as the so-called USA PATRIOT Act, which enabled domestic spying and other constitutionally dubious security powers, Cavuto cut him off and said bluntly he didn’t want to discuss “those issues”.

Even as Fox News ran its “Fox Facts” at the lower right of the screen, revealing its people know and understan that 44% of all government bills will go unpaid, if the debt ceiling is not raised by August 2, Cavuto made the incredible statement that the wealthy “are already paying a lot”—they are paying historically low levels of taxes—and that they have no reason “to pay more for a lousy product”. The network that wrapped itself in the flag to promote war in Iraq, and the USA PATRIOT Act, now says the United States of America is “a lousy product”.

There is an undercurrent of reveling in what some perceive as the demise of a form of government, so-called “big government”, which they believe is a threat to American democracy. There is a trend among far-right conservative ideologues that favors advocating for and trying to bring about the sabotage of the American system of electoral government, on the grounds that it is dangerously “liberal” and that it somehow disregards “traditional” values.

Mr. Cavuto and Mr. Paul today showed themselves both to be guilty of the unfortunate—and one hopes unintentional—failure to recognize when extremist far-right euphemisms penetrate into their more moderate conservative rhetoric. This crossover has been happening for too long, and is an irresponsible attack on informed discourse. It mirrors the false claim that all issues of public controversy are just “opinion”, and radical, factually unfounded smears as legitimate as sincere dealing with circumstance.

In a subsequent interview, Cavuto immediately interrupted his interlocutor, when the consensus position that responsible debt and deficit reduction requires an upward adjustment of tax rates on the wealthiest Americans. Cavuto interrupted in order to shout that the wealthy are “already paying a lot”, then to state his “lousy product” blanket smear against the American government.

That there is intense logical incoherence in this method of reporting—where facts are brushed aside in favor of metaphor, hyperbole and counter-to-fact claims, designed to further a world view, not a solution—is obvious. That this logical incoherence matters to viewers or to editors is not so obvious. Mr. Cavuto’s deliberate manipulation of his interviews, to convey a biased, counter-to-fact line of argument, is indicative of the morally bankrupt tabloid culture promoted by Rupert Murdoch’s tabloids in the United Kingdom.

That is not to say Mr. Cavuto is himself so unworthy of respect, but he, like any other journalist or news analyst, must earn what respect is given, by dealing intelligently with the reality of the world before him. To refute the very facts everyone at the table agrees to, to argue that the failure of the US government to pay 44% of its bills would be of negligible importance, to invite collapse as somehow courageously patriotic, is irresponsible and suggests a lack of seriousness about the responsibility of the press to foster actual understanding of events.

Whether he has been directed, by Bill Sammon—whose emails instructing reporters to slant their reporting for ideological and partisan reasons have shocked and concerned media analysts, citizens and journalists—to slant his reporting, or whether he is voluntarily doing so in order to further the culture that prevails at his network is impossible to know, unless Mr. Cavuto chooses to express his genuine thinking.

Mr. Paul, for his part, must improve the way he manages the unwieldy set of passions that inform his rhetoric. If we were to give him the benefit of the doubt, that he believes honestly that the United States of America does not need its government, or most or much of it, then he would do better to learn specifics, and to explain what, precisely, he would eliminate and how, precisely, he would secure the same services and from whom.

The right-wing doctrine, for instance, that the EPA is some sort of hostile force with no productive value does not contemplate any means of any kind to protect the air and water the American people need to survive. No one argues that function should be militarized, and the very idea that there should be an actual police component to environmental regulation is anathema to the anti-EPA hardliners.

Yet those people need clean water and clean air, in order to avoid the literally thousands of carcinogenic chemicals and compounds that are released into the environment by American industry, all the time. Their children and grandchildren will be less able to live in a nation that has the health security to function as an advanced nation, if clean air and water services are not performed by any entity, with enforcement powers. Yet they profess it is patriotic to throw caution to the wind and allow industries whose entire methodology requires them to release these chemicals into the environment, unless otherwise constrained, to “regulate themselves”.

It is this kind of gap between Mr. Paul’s words and the real world that make him a less serious candidate than he might otherwise be. It is this kind of flippant, sometimes irrational, politicking that wins him the affection of passionate supporters, but not necessarily the respect of the wider electorate or the press and the parties.

In short, Mr. Paul again revealed himself to be more of a rhetorician than a leader, more a critic than a president. After so many years of presenting himself as eligible for the nation’s highest office, he has yet to communicate a credible vision for what he wants the United States of America to be. To get a grip on administrative specifics and how they affect real people’s lives, would go a long way to making his rhetoric more credible.

Saying that default is acceptable, or that it somehow represents “American tradition” is just an astonishing failure to reason with clarity.

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16 Comments

on “Ron Paul Tells Fox’s Neil Cavuto that Default is “American Tradition”
16 Comments on “Ron Paul Tells Fox’s Neil Cavuto that Default is “American Tradition”
  1. Thanks for the post, interesting and thought provoking.
    I was reading this article in the Washington Post about the national debt and budget deficit. The stats provided by the Congressional Budget Office are absolutely staggering

    See full article here: http://wapo.st/mEQQPz

    I find myself looking at all of these budget issues as if there are only two options a Right option and a Left option, both options presented by Right and Left seem sub-optimal at best.

    Traveling abroad over the last several decades I can say America is getting left behind. Ideas, capital, and people are mobile and they were go they are the most welcomed, is America still that place?

    I voted for Obama but I have to say it has been one big disappointment since inauguration.

    I am trying to figure out why everybody is against the cut, cap, and balance plan it seems reasonable to me. Tax increases alone won’t get us there, and the spending cuts don’t seem big enough to get us there. Even if we tax those making over 250K at 90% we wouldn’t even be one quarter to where we need to be to balance the budget.

    I would prefer if the Fed Govt. was forced to balance their budgets like the states are.

  2. Thanks for the comment. This is a crucial and difficult issue, and we agree that right-left divisions are not constructive. The “cut, cap and balance” plan has some serious shortcomings, not least of which is that it provides no viable strategy for balancing budgets. The problem is that without significant increases in government revenues, built into the tax code, two important things will happen: spending will fall by more than is economically healthy, directly cutting into GDP at dangerous levels, and borrowing will have to continue increasing.

    The result will be more frequent debt ceiling crises—the Constitution precludes a permanent “cap”—and escalating borrowing costs, further reducing the dollar-for-dollar ROI on debt-financing. Instituting a blanket balanced budget requirement would then have to take place mostly be radical increases in the money supply, which would only superficially cover the deeper wound. Each of these effects of the plan would be at best a drag on economic growth, at worst a cause of prolonged joblessness and possibly recession.

    To balance the federal budget, there needs to be a more equal treatment of the value, over time, of spending cuts and revenue increases. Spending cuts do not automatically result in economic stimulus and therefore job creation and increased revenue, but they do directly reduce GDP, leaving total economic benefit neutral in many cases. Without substantial new revenue, taxpayers will be stuck paying what they pay to fund increasingly expensive borrowing costs. That reality cannot be wished away.

  3. Im guessing you didn’t read the two books Dr Paul has written. He clearly states his plan in detail to reform and down size our over reaching federal government. Your attach on Ron Paul are totally misinformed and fall in the same yellow journalism category as fox news and Npr. You should fallow your own advice and research the subject before you write on it. Ron Paul offered a great plan to reduce the debt with out spending cuts or raising revenue that has been whole ignored by main stream media including fox. He purposes to eliminate the 1.2 trillion dollars worth of treasury bonds the fed is currently holding. There by reducing our federal deficit by 1.2 trillion dollars. This is legal and well within the power of congress. Please don’t write in ignorance as though it were truth. Your smearing of the only politician in office who truly cares for the rights and welfare of the American people is a real disservice to America.

  4. It is interesting that you classify Fox News as “yellow journalism”, and very constructive. It is more interesting, and far less constructive, that you classify NPR that way. NPR is not a for-profit outfit, and it is not a tabloid-style operation; it is not partisan and allows no overtly partisan reporting on its airwaves. Radical conservative ideologues attack NPR, because they misunderstand that public radio is actually non-partisan, and in service of the public.

    As for Ron Paul’s books, the same holds that holds for his on-air analysis: when he resorts to metaphor, faith-based falsehoods about economic policy and ad-hominem attacks on serious people doing honest work, he degrades his own discourse and undermines the communicative value of his vision. Cutting everything, and defaming bureaucrats, is not a vision; it is faith healing.

    The question for Rep. Paul to answer is: How would he govern, if he would not have a government to run? In simpler terms, what constructive responsibilities would he actually take on, were he president of the government he seeks to roll back with no plan for replacing the services that will then disappear from the landscape of our society?

    We believe that Rep. Paul is a committed champion of civil liberties and of American democracy. We are not smearing him, but rather asking that he be more constructive in his discourse. It does not help to further his mission of protecting the sphere of private liberty of every American citizen if his remarks are demonstrably unfounded, irrational or hyperbolic.

    It may play well with some for him to accuse the government of being against the people or to accuse Pres. Obama of not sharing his commitment to civil liberties, but the fact is that Pres. Obama’s career has been founded on a persistent endeavor to protect and expand the sphere of private liberty of every American citizen.

    A serious leader works with people, builds coalitions, and makes sure his views are shared in a credible way; we urge Rep. Paul to make his rhetoric match the high principle you see in his ideas, so that our public discourse might actually be more constructive.

  5. This has got to be the worst piece of statist propaganda i have ever read.

    Ron Paul has been the only candidate to present a credible vision of America. He is the only one to stand up against illegal wars, the federal reserve, and the only one who has any sense of economic thinking. And he is certainly a step up from the double speaking politicians of today that never tell you their true opinions.

    And why don’t you look up the term “the invisible hand” and also learn microeconomics, rather than complaining about the” American Industry ” like it is not made up of millions of competing businesses.

  6. Forgive the grammar mistakes of the commenter above. It is the internet, after all. :)

    Your article was well-written, however, the problem with Ron Paul is that he doesn’t operate in sound bytes. He can’t simply say “freedom is great” or “yes, raise the debt ceiling so people don’t suffer”. He has real theories that must be expounded in order for them to click. This is why his followers are so passionate – it’s not because his message is easy, but because, if you really dive in, the entire picture becomes crystal clear. That’s when it’s frustrating to see pieces like this who only take away the 5% that doesn’t make sense without the other 95%.

    The real question is – when do we let the, excuse my language, sh*t hit the fan? We just keep delaying and delaying, making the inevitable problems worse and worse.

    Paul did a piece about it here for Bloomberg:

    http://www.bloomberg.com/news/2011-07-22/default-now-or-suffer-a-more-expensive-crisis-later-ron-paul.html

    It’s a good introduction. There’s certainly more to it, however. It might make you for eager to dive in if you realize that Dr. Paul squarely predicted our housing bubble all the way back in 2003. If you need more proof, just do a youtube search:

    http://www.youtube.com/watch?v=KONpt9a6HrI&feature=related

    See, Ron’s an economist, whereas 99% of Americans know absolutely nothing about the economy. That’s why there’s a lot of confusion.

    I encourage the writers of this article, as well as the readers of this seemingly quality publication (liked many of your other articles!) to do a little bit more research into Dr. Paul. I think you’ll be surprised!

  7. 1. This is not “statist propaganda”; please refrain from random smears based on reflexive use of ideologically narrow vocabulary.

    2. Being an elected official is not about having “opinions”; it is about being a constructive part of the process of governing.

    3. The government is not the enemy of the American people; it belongs to the American people. That is the founding principle of American democracy.

    4. “The invisible hand” is not a magical force that automatically makes all markets just all the time; it requires justice, rule of law, a level playing field, and vibrant democracy.

    5. That just, vibrant democratic marketplace does not work in an environment where all safeguards against abuse of citizens’ rights are removed—universal deregulation undermines the efficacy of Adam Smith’s “invisible hand” of the marketplace.

    6. The United States was not founded to mimic narrow ideological categories and theories; it was founded to allow them to compete against one another: if Ron Paul’s ideas are the best, and we need no further democratization to make things fair, then they will win the argument.

    7. If there is little room for good ideas that safeguard the liberties of individual American citizens, then we need to balance safeguards against erosion of our liberties against the urge to “shrink government”, which is a tempting shortcut, but not necessarily an effective tool.

    8. Again, we insist: Being blunt is not the same as leading; Rep. Paul should do service to his ideas, to his supporters and to our great democracy, by being more thorough, more open, more precise and more constructive with his language.

  8. Botounami: Thank you for your response. We do not argue that there is no theory behind the remarks made by Rep. Paul in today’s interview. We do not argue that his attitudes are not founded in a sincere desire to reach a state of affairs that makes sense.

    That does not, however, mean that laughing at the idea of working with the president—who is working hard, being honest and taking major political risks, to work out the most significant debt-reduction deal in history—is constructive or a sign of leadership.

    There are great examples of individuals who have interesting theories that never get a public hearing. There are those who believe we should let things come apart in order to rebuild from scratch, as if that would not cause grave suffering for millions.

    But this is a democracy, and those of us who would like to prevent our nation from coming apart, who do not share the commitment to the idea that letting things fall apart might be constructive, have a right to work through the system for a better future.

    Again, there might be better ways for Ron Paul to bring his ideas into governing national policy than by rejecting the opportunity to do so or making flippant remarks about others involved in crafting solutions.

    Our request to Rep. Paul is that he endeavor to be constructive, engaged, and to put aside politics and be part of a genuine solution.

  9. To the editors:

    It seems that the main issue impeding a more accurate understanding of Dr. Paul’s philosophy is a series of fundamental mis-calculations that people make in regards to the state. The primary of these fallacies can be seen made bare in your response to Zapadoes, that “The government is not the enemy of the American people; it belongs to the American people.” While this is most certainly the founding principle of popular American political discourse, please excuse we more libertarian minded people from objecting to this affront to logic.

    The government may provide certain services to certain people (food stamps, welfare, road construction, food safety inspection, etc…), however it does not stand to reason that these few exceptions somehow stand as the primary purpose of government. The primary focus of government is almost always to preserve, perpetuate and expand power and influence of the status-quo (except during the most revolutionary of periods). This can be seen to be the dominate theme of all major pieces of legislation. The response to any crisis is always “more government” in some form or another.

    The effect of these actions? Stratification of society into the “influencers” and the “influenced”, or the “rulers” and the “ruled”.

    When government is permitted to regulate virtually any activity, which will they first choose to meddle with?

    The answer: Those which stand to either directly enrich the “influencers”, or those that will help to insulate the “influencers” from competition.

    For further reading please see: Man, Economy and State by Murray Rothbard (The Anatomy of the State will probably serve as a short primer.)

  10. Furthermore, your misunderstanding of the nature of “regulation” in a free market is telling. The idea that businesses “regulate themselves” is true only to the degree by which they choose to adopt competitive strategies based on their own rational self-interest. HOWEVER, under a free market with respect to property rights, many activities that are now “regulated” via various burdunsome corporate-controlled federal bureaucracies would be outright prohibited through much stronger tort-protections. One government service that Dr. Paul would never attempt to restrict access to is the courts. Of course, changes in tort law would require acts of Congress, however so would the dismantling of the EPA, so the issue is moot.

    Finally, I urge you all to take a serious look at the actions of this current president in regards to this manufactured crisis. Look at his candor. You claim he is being honest and working hard? About what? For what?

    He has intentionally attempted to scare senior citizens about the possibility of social security checks not going out (the same checks that are being made increasingly worthless due to many of the policies of this and past administrations). This is a scenario that could only happen if the president let it happen. Our nation must live within it’s means and prioritize its payments.

    Ron Paul is absolutely correct with regards to historical president for national defaults. The United States has defaulted at least 3 times: during the Civil War, in 1933, and in 1971.

    Ron Paul is not saying that we SHOULD default, he’s saying that we WILL. The only question is what payments we are going to choose to default on? The promises to our creditors? The promises to our senior citizens and dependent children? Or the promises to the bureaucrats, bankers, corporate fat cats, and war profiteers?

    I think the American people, and you, dear Editors, all know that answer we should choose.

  11. Thank you for your insights and your comments.

    To clarify: We do not argue that businesses DO regulate themselves; we take issue with the idea that those with no incentive to perform certain improvements to their behavior might do so voluntarily. Regulation just means norms, standards. Government regulation in the best sense simply makes sure the norms make sense for all the people affected by something, so that government actually serves the people. Where it oversteps is where it makes impossible demands, or becomes unnecessarily intrusive; it is important to distinguish and irresponsible not to.

    On the issue of US default: the only time the United States ever defaulted on external debt obligations was in 1790. There were other times when domestic obligations were defaulted on, most of these by a number of states. These were typically blamed on revenue shortfalls.

    On the question of “influencers” and the “status quo”: government may often be dominated by powerful interests that wield influence and promote and defend the status quo, but this is not the purpose of government—certainly not in the United States. The unique innovation in the American system of government—and I believe Rep. Paul would agree with us here—was that for the first time in recorded history, a government was established with the explicit responsibility of ensuring that the status quo is not injurious to basic rights every individual is entitled to enjoy.

    On “more government”: it is true that the people commonly demand that government act in response to crisis. It is true that Congress does what it does, and presidents do what they do, by passing and signing new legislation, respectively. This does not always mean we have “more government”. There are many examples, at crucial moments in our history, when the government has performed ably in response to crisis, without expanding its control over ordinary people’s lives. Again, it is important to distinguish and irresponsible not to.

    A note to the more aggressive commenters (not shown here): We will not publish violent, profane or obscene language. If you disagree with facts or analysis, please provide some of your own; if you don’t like people you agree with being evaluated or judged, please refrain from participating in discussions of political controversy, where this is likely to occur.

  12. I am your regular college student turned new Ron Paul supporter. I have to say that one of the reasons I support Ron is the option to opt out of social security, abolish federal taxes on income (No one lets a thief steal our money yet we slowly handed over our civil rights to govt), and refusing to police the world. Our founding fathers had a lot to say about big govt.

    How come no one exposed Bachmann for signing a pledge saying black families faired better in slavery? It was all over Iowa news here. Even if she didnt read it the assessment is bad for her.

  13. ” Cavuto made the incredible statement that the wealthy “are already paying a lot”—they are paying historically low levels of taxes—”

    Where do you get your information from? The liberal Yahoo! “news”? The wealthy PAY MUCH MORE in taxes compared to the 1950′s when the Federal tax rate for a family making $25,000 was 21%. Adjusted for inflation the new $25,000 as of 2010 is $250,000. The average federal tax bill for these families? 36%. The misinformation from the liberal media is astounding.

    “Mr. Paul made the astonishing claim that the least damaging outcome of the debt ceiling negotiations would be a national default.”

    You liberals HATE reality don’t you? Paul is 110% correct and it may astonish you, but it’s the best things for the country. At some point you have to stop spending money you don’t have, period. Economics 101, whether it’s a household or the federal government, you can eventually have to stop living above your means. I can’t believe intelligent people can even debate this fact of life.

  14. To The Editors..

    Forgive my crassness in my prior post.

    The US is the biggest debtor nation in the world, it’s only going to get worse, not better. Does anyone really believe whatever deal they agree to will actually reduce the deficit? I mean really? We’ve heard it all before, the cuts simply do not come, the spending only increases. Why on Earth is Ron Paul so clueless? Households and businesses that are in the black eventually go bankrupt when all credit dries up, why do people think the federal government is any different? Sure they can, and are, prolonging it, they have means most people and businesses don’t, but in the end it’s just putting off the inevitable. Take our medicine now or a decade from now when it will be even worse. Ron Paul is the only one making sense.

  15. Dear Eddie,

    The crassness of your first comment is evident, and meaningful. Let’s look at a couple of points: first, you attack liberals for not liking reality, then you make a 110% exaggeration, immediately following. This is instructive as to the hyperbole that is influencing your view of this issue.

    Second, we prefer to avoid personal attacks, smears and disdain as tools of argument; they tend to fall short and obscure the evidence. So let’s stay away from name-calling and look at some evidence.

    On the issue of tax rates: they were higher under Eisenhower and under Reagan than they are under Obama. PolitiFact—which is a Pulitzer prize-winning fact-checking service, not a liberal media outfit—found that when adjusting for inflation, the top tax rates under both Republican presidents was higher than under Pres. Obama:

    http://www.politifact.com/truth-o-meter/statements/2010/sep/22/barack-obama/barack-obama-says-taxes-are-lower-today-under-reag/

    Specifically: The top rate is now 35 percent, and starts at $373,650 for both individuals and couples.

    PolitiFact reports that “By contrast, during the eight years of the Eisenhower presidency, the top rate averaged roughly 90 percent, typically hitting individuals making $200,000 a year or couples making $400,000 a year. In 2010 dollars, that’s equivalent to $1.6 million for an individual and $3.2 million for a couple. Someone making the 1954 equivalent of $373,650 in today’s money would have paid a tax rate of 72 percent back then.”

    $250,000 is not $25,000 in “Eisenhower dollars”, but what is more meaningful is that the top tax rate now starts at such a low income level. The revenue lost by not applying a more progressive tax rate at the highest levels of income puts a far higher burden on middle-class and working people, even on families earning $250,000 or more.

    Tax rates on those who earn $1.6 million a year or more could be at 45% and still be just half of what they were under Eisenhower, and that would go a long way to closing our deficits.

    Where taxes have increased under Obama it has been on things like cigarettes and on government entitlement payments to the affluent—who, arguably, do not need them and would pay more than they do in taxes were they to shift to, say, private health insurance. Yet taxes for most Americans have consistently fallen under Obama.

    On Ron Paul’s “reality”: a default would immediately drain 10% of annualized GDP from our economy; that means not only a credit downgrade and soaring interest rates, and turning over unprecedented influence to a foreign power—China—but also a major slowdown of our economy, and massive new job loss.

    You may agree with his Devil may care philosophy about such things, but if he has a serious view of the economic landscape: what plan does he have to prevent interest rates from going up and job losses from mounting?

    Saying there is no way is not good enough; saying it is someone else’s fault is not good enough. A leader, a man fit for the presidency, has to have a plan to deal with these issues.

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