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GLENN: Senator-elect -- boy, this sounds good. Senator-elect Rand Paul is with us. Senator-elect, how are you, sir?
RAND PAUL: Very good. Good to be with you, Glenn.
GLENN: Ahhh. Thank you for running. Thank you for winning.
RAND PAUL: Well, it wasn't an easy -- it wasn't an easy chore. We had to get through a lot of mess to get there, but in the end I think it's going to be worth it to have somebody who really honestly is going to try to rectify the problems of the budget and the debt.
GLENN: Senator, I believe things today that I didn't believe two years ago. I believe things today that I would have thought was absolutely insane. I'm doing a show tonight on George Soros that if I didn't have the evidence in front of me, if I didn't have -- I mean, it's -- it's nuts what's going on. You are somebody who would like to restore us, not change us. Restore us; am I correct?
RAND PAUL: Absolutely. I think the real thing we face in our country is a debt crisis of monumental proportions and I'm reading this little book called Broke right now and in it I think what I like most about it is that it honestly and refreshingly says, you know what? This is a bipartisan problem. We didn't get here because the Republicans did this or the Democrats did this. They both did this to us, and it's going to take a bipartisan way out of it. But the way out of it is to say we have to cut spending.
GLENN: Okay, now --
RAND PAUL: And one of the other things is I got from looking -- I'm about halfway through this book now -- is that instead of talking about contraction of the government, we need to talk about expansion of the private sector. So, you know, if government is consuming 25% of gross domestic product and we want it to consume 20%, let's talk about that that's going to be a 5% expansion of the private sector. It would be the most momentous growth you'd ever see in our country if we just take that 5% we give to government and let's give it back to the private marketplace.
GLENN: Well, I appreciate you reading the book, and I hope that it is useful to somebody in Washington. I try -- what I tried to do is to get people to think out of the box because I believe, I believe we are facing the most dangerous two years of our republic's history. These next two years may decide whether we as a country live or die. Would you agree with that?
RAND PAUL: Yeah, I think that I keep telling people there's a day of reckoning and that it's not in the distant future, that it's now become an imminent problem. And I've said this repeatedly for over the last year that it isn't just our kids and our grandkids. It's really around the corner and that I don't want our country to have the chaotic situations that erupted in Greece. And when level-headed people like Bernanke are telling us -- who are not alarmists who are telling us that the debt is unsustainable, when Greenspan -- the other quote you have in there about Greenspan saying that within the next three decades it will be paid for but basically by devaluing, dramatically devaluing the dollar, that worries me. And -- but I'm also a great believer in the ability of capitalism and individual ownership of property to create jobs, and I really want to -- really we need to extoll the virtues of what we can do as a country, what we have done as a country, and say look, we don't need to say government has to do everything for us. We can do it ourselves. You know, it's like we have to believe in ourselves again. That's what I keep telling people.
GLENN: Here's what I am concerned about. There is, as I'm doing a show on Soros tonight, there is a global governance that is being constructed, and most of it is already in place. It's already there. And there are people pushing us over the edge because they want that global governance. They don't believe in really our sovereignty and our system of government. They are trying to cut us down to size, et cetera, et cetera. The rest of the world is looking at what we're doing to their economies now by quantitative easing. They see what's happening. The world is going to turn on us and blame us for all of their problems. And in some ways, especially the last two years, we'll deserve that. You are being faced now with a couple of things. One of them is the debt ceiling. And the Republicans I thought, you know, they stood lockstep. Nobody voted for the increase of the debt ceiling. I don't believe that we cannot raise the debt ceiling. I think we have to cut spending dramatically. But if we can't do both, we have to make some -- we can't default on our loan because I'm afraid of an event like that, of any kind of real major event will set the dominoes, just push the first domino over and then it's just a collapse. Do you agree or disagree with that?
RAND PAUL: Well, most of the time the debt ceiling vote has ended up being a symbolic vote. Those who have voted no have been ones who said to government, you know, we can't continue to run up the debt. And there never really has been a serious challenge of the debt ceiling not going up that I'm aware of. I don't think there will be a serious challenge this time on it. My inclination, though, is to vote no to send the message that we can't keep borrowing.
GLENN: That's right.
RAND PAUL: But I do agree that it's sort of a backwards approach. Really what we should be doing is promoting and what I will promote from the get-go is I will introduce a budget that is balanced and that's what we need to do is have someone introduce and have that as an alternative. But that's doing the planning in advance. The debt ceiling is doing the planning -- is not really doing planning. It's just saying we won't borrow more. But I do think as a general principle we should tell, you know, the American people want us to quit borrowing and that's what I'm in favor of. Whether you do it dramatically in one day in one vote is still I think something that has to be discussed. But I think we do have to introduce balanced budgets, we do have to have -- the Democrats want to say, oh, the Republicans are hypocrites, you won't introduce anything that can cut spending, you know, to pay for tax cuts and this and that. I don't accept the logic on it, but I will accept that, yes, we should introduce spending cuts and I think we need significant bills that cut several hundred billion dollars right off the bat and we need to introduce it and that's what needs to be the Republican message.
GLENN: Do you see a way out of this quantitative easing? I mean, Tim Geithner said it would never happen. Ben Bernanke said under oath it would never happen, the Fed will never do that. The last two challenges where it did come to a real push, the first one came I think under George W. Bush, or was it Clinton? One of them was George W. Bush, and Bush sold gold. He just sold the gold at Fort Knox. He sold a pile of it and kept things rolling that way. I think Bernanke has just said the debt ceiling doesn't matter to us at the Fed. We'll just keep -- we can just keep, you know, doing what we're doing.
RAND PAUL: Well, what concerns me about it is that, you know, during the crisis in 2007, we doubled the monetary base. That's all the bank reserves and the currency basically doubled. A lot of that money is still sitting in banks because the Federal Reserve for the first time is paying interest rates. Not much, but is paying interest to the large banks in New York to keep the money in the banks. I think a lot of that money has not filtered into the economy yet. But my concern is we already doubled the monetary base, you know, in the period of about four months in 2007. That's still lurking about and will create inflation eventually and then they want to do more easing on top of that. That concerns me.
The other thing that concerns me is a lot of us have been talking about ObamaCare and how awful it is, and I agree with all that but I don't think we've been talking enough about what these banking regulations are doing because the banking regulation bill to my mind may be even worse for the economy than ObamaCare.
GLENN: I agree.
RAND PAUL: Because if you talk to small community banks and businesses, even with good credit they are finding they are having a tough time getting money. So the banking regulations are stifling the loaning of money. That's exactly the wrong thing you want to do in the midst of a great recession.
GLENN: And this is going to hurt the -- in the end there will -- it will wipe out all the small banks, all local banks, all the community lenders and it will leave just giant institutions in its wake, and that will just kill small business.
RAND PAUL: And one of the things that we've been talking about through all of this is that when people say we need to regulate things, well, yeah, let's regulate the banks that caused the problems, Fannie Mae, Freddie Mac. I'm all for more regulations on those banks and also on the Federal Reserve. Let's control the mess that the Federal Reserve got us in by keeping interest rates below the market rate and causing this huge housing boom and ultimately this bust. But let's don't heap more regulations on the private banks that really had nothing to do with the problem.
PAT: Can these new financial regulations be repealed?
RAND PAUL: They need to be, and I think we're going to find that they are really -- it's the same with ObamaCare. The more we know with each of these bills, the more they will be a disaster. And particularly if the economy takes a down turn again, which I think it may, the banking regulations have to go because, you know, in the Great Depression one of the things that made it a lot worse is they increased reserve requirements in the middle of the Great Depression and all of a sudden made it much more difficult for loans to originate. And that was when we went from '32 down to 1937, but a large part of that was the government making bad decisions. We're doing the same thing now. President Obama believes government is the answer to everything. What we need are people who will be vocal in our government to say, you know what, we are the answer. It's ourselves. The American dream is getting the government out of the way of individual entrepreneurs and businessmen. But the American dream is not heaping more regulations on business.
GLENN: I only have about a minute left with you and I have to ask you this: Do you believe that there are radicals and revolutionaries in our midst?
RAND PAUL: Well, I mean, I think there are people who have different beliefs. There are people who believe once, you know, the government's the answer to everything and there are varying degrees of that. I think that the current administration, there is every evidence that their belief is in a very, very large governmental presence in everything.
GLENN: Do you -- have you heard of Cloward and Piven?
RAND PAUL: Not right offhand.
GLENN: All right. We'll send you some information on Cloward and Piven. I believe that there is an effort to collapse the system, that it is a different kind of revolution than these radicals foresaw in the 1960s but it is one in a business suit. And as nuts as it sounds, I'm concerned that the country is at the brink and there are people that want to push it over. I want to play a piece of audio. They have been saying that the left -- the left has been saying that the tea parties are dangerous. I want you to listen to this piece of audio from an anchor on MSNBC last night.
RATIGAN: We are here with very disconcerting questions. Are things in our country so bad that it might actually be time for a revolution? The answer obviously is yes. The only question is how to do it. And our next guest, cartoonist --
GLENN: Now, he talks about -- he talks about violence, and violence may be necessary. Can -- do you believe we are so fragile that any kind of act of real violence, any kind of striking out is a danger to the republic at this point because the whole thing could collapse?
RAND PAUL: Well, what I do tell people often is that I think out of chaos bad things can happen and so I don't want chaos. I don't want what happened to Greece but I also don't want what happened in 1923 to the German currency and I do fear that. And people say, oh, America, that could never happen.
GLENN: Oh, it can.
RAND PAUL: I think it could happen and that is my great fear is that we destroy the currency but out of chaos, yes, there could be much, you know -- Germany elected Hitler and then people come to me the same way the come to you and saying you're saying so-and-so's Hitler. I'm not saying anyone's Hitler. What I am saying is out of chaos Germany chose a strong leader that said give me liberty and I'll give you security and I don't want to have that kind of situation occur in our country.
GLENN: Rand, it is -- congratulations, senator-elect. It is good to have you in Washington. You keep your backbone and watch your back because, man, there are going to be all kinds of -- watch Mr. Smith Goes to Washington before you go.
RAND PAUL: My favorite movie.
GLENN: God bless you and thank you very much.
RAND PAUL: Thanks, Glenn.
GLENN: Appreciate it, bye-bye.
