(1) At 1.07 onwards, Ron Paul tells us that he wants a “natural rate of interest.” I have news for Paul: there is no such thing; it is a fantasy, a myth. A “natural” rate of interest does not exist outside of a fictitious equilibrium state. The non-existence of this natural rate of interest destroys the Hayekian versions of the Austrian business cycle theory.I have more thoughts about this, and I might update this post in the next day or so.
(2) Paul tells us that inflation is theft. Well, why isn’t deflation theft, committed against debtors? Deflation imposes a tax on productive businesses and individuals in debt, who must pay back their debts with money of higher purchasing power. There may also be debt deflationary effects. Wages and prices do not adjust smoothly or rapidly or uniformly, despite the laughable myths of Walrasians and Austrians who think that near perfect wage and price flexibility would magically occur to compensate for the debt deflationary effects and deflationary theft imposed on debtors.
(3) Paul’s comments on the Roman empire are misleading. Paul implies that the Roman empire was destroyed by inflation, but that is false. Rome did experience an inflationary crisis (by their standards) in the third century to the early fourth century AD, but this economic crisis largely abated by the mid-fourth century, and the empire persisted for over a century after this. Even the social effects of the inflation are debated, because so much of the empire’s population were peasant farmers not significantly reliant on monetised exchange. Furthermore, the Eastern Roman empire had been hit by the same inflationary crisis, but it never fell. Moreover, the Roman Republic fell during persistent private debt problems and, arguably, debt deflationary crisis.
(4) Ron Paul’s remarks on the post-WWII boom are plainly wrong.