"washington journal" at 7:00 a.m. eastern on c-span. >> texas congressmen ron paul continues traveling around new hampshire. next, a town home meeting from meredith, new hampshire. >> good afternoon, meredith. before this started, i want to give dr. pual a chance to introduce his family. >> i thought that after two days of the debates you would be tired of politics. but we are just getting started. we are looking forward to tuesday, for sure. before we started, i wanted to introduce several members of my family. this is my wife, carol. you might have received some greetings from her. she has sent out a lot of

cookbooks here lately. also, a daughter-in-law is here. and her daughter, linda. we also had the arrival of a son, and we celebrated his birthday yesterday, senator rand paul. [laughter] [applause] >> i am from the lakes forsyth. we also have senator sanborn and senator white on board. i am glad to have the support of so many senators. i have the honor of working with rand paul when he was campaigning for a father. i got to know him very well. he is a true believer. at that time, he did not want to run for office. he was a family man and had a successful practice. he saw the call to duty and i

am so glad that he did. he has done a fantastic job. senator ran the fall introduces -- rand paul will introduce his father. [applause] >> thank you. thank you. what a crowd. what a crowd. anyone here for rent -- anyone here ready to vote for ron paul already? [applause] we will take the cheers and approval. hang tight, as i try to convince the people who are undecided. years ago, reagan told the story of how he was going to visit border check of -- gorbachev. it seems that there was an accountant in moscow that wanted to buy a car. he saved his money for years and years, because no one had much money in the soviet union, and there was only one car dealer. it was a crummy, a piece of crap car.

he saved for years and years. he put his money down. the surly bureaucrat said that that is good and well, come back in 10 years to pick up your car. the accountant did not miss a beat and said -- is that tuesday or wednesday? the bureaucrat told him -- it would be 10 years, and you want to know tuesday or wednesday? he said yes -- the plumber's coming on tuesday and i do not want to miss it. [laughter] how could we ever conceive of the government owning our car dealerships and manufacturers? people of america would not get it. but the new acronym for gm, do you know it? government motors. we have come a long way, but we have been going the wrong way in the wrong direction. the government, owning businesses, bailing out people who make bad decisions.

anybody here think that a banker that makes $100 million per year on wall street, $10 million per year on wall street, if he makes a bad decision and is going bankrupt, we should bail him out? does anyone believe that? i got started running as part of the tea party movement because i was unhappy with republicans. unhappy with republicans the double the debt under george bush and double the size of the department of education and had the audacity to broker a bank bailout. i guess you can get elected as a republican, because it matters what kind of republican we get. i tell people that the republican party is an empty vessel unless we view it with values. you have a lot of candidates running around saying that they are reagan conservatives.

reagan would be rolling over in his grave to hear people say they're reagan conservatives when they voted to double the size of the department of education, when they supported an individual mandate that was the lynchpin of obama care, when they supported things that were inconsistent with the conservative wing of our party. there has only been one person who has voted against these over the years. who never voted for any budget that was not balanced. sums -- some will say that they never voted for planned parenthood. they put in a line the said the money would not go for a portion, but they voted for it anyway is. they never had the courage to say no. there has been someone in

washington who is one of the few candidates that voted no a few times by themselves. one candidate who has never been accused of flip flopping. one candidate in washington who the lobbyists do not even bother to come to his office. [applause] there is only one candidate, and this is the anomaly that bugs the heck out of people and the cannot understand it, they cannot understand america because they want to think that ron paul does not believe in a strong national defense. it is not true. do you know who soldiers trust with their money and contributions more than any other candidate? >> ron paul. >> good answer. [applause]

there is only one candidate in the race who has gotten more contributions from active duty soldiers then all of the other candidates combined. i think of a soldier, a young man or woman who puts their lives on the line and sends their contribution, and many have been sending it to ron paul, shows that there are many soldiers who are thoughtful about going to war. they volunteered for the country and our awful about it. -- and are thoughtful about it. they know that they're putting their life, line and want to have a commander in chief that has the same thoughtfulness. i give you that new, hopefully, commander-in-chief, my father, ron paul. [applause] >> thank you. thank you very much.

>> we love you, ron. [applause] >> pretty soon he will be able to get up on stage and give a pretty good speech, do you not think? [laughter] i will have a little bit of a different format. i will not start with a long speech. jim will ask me a few questions and we will then get some questions from the audience. >> thank you. you served in congress for a long time. you were practicing medicine before that. what was practicing medicine like in those days? how has that influenced how you feel about the government's approach to medicine? >> that is one thing that i have witnessed. a change in medical practice. i went to college in the 1950's, graduating in the end of 1960. i finished a couple of years of residency and did some practice before the government was involved in medicine.

this was before medicaid and medicare. there was just minimal government. government took care of the veterans and some others. in the 1960's, lbj -- i do not know if you remember him or not -- he claimed that we could have guns and butter. we were fighting the vietnam war. the butter was this idea that the federal government had to take over medical care. subsequently over the last decades he has done that. we have seen a dramatic change. the cost of medicine has skyrocketed. the second-is it has destroyed the doctor patient relationship. and it has introduced -- not socialized medicine, but corporate medicine. the government is now running things and owning it. that would be very bad. corporate medicine is not much better. drug companies become powerful

lobbyists. the medical profession has powerful lobbyists. a dramatic change. the experience that i had in the early 1960's was in a catholic hospital. all that i remember is that i did not get paid very much. in an emergency room i was moonlighting. the one thing that i noticed is that everyone that taking care of. people back to pay, they paid. no one was turned away. people received medical care. it was not a period of time like the 50's and 60's. i recall people lying on the streets and not getting medicare. it was delivered differently now. we have introduced a change medical system where the quality goes down, the cost goes up, and everyone is unhappy.

the patients go unhappy -- grow unhappy. it will get so much worse with obama care. the good way to start, once we take over in washington, will be to get rid of obama care and making sure that the control of medicine is returned to you, the citizens, the patient. [applause] >> [inaudible] good suggestion. >> your budget plan is to cut $1 trillion in the first year. why do you feel that cutting spending is important? a lot of people say that we need to spend more in order to stimulate the economy. >> actually, it is the

government that spends less when the people spend more. people spend money with a much better, much more wisdom that the government. the government, we actually lose twice. if they take that money out of our pockets, they lose $1 trillion. it is usually spent getting themselves into trouble. either overseas or on bureaucrats. then we need additional expenses for overcoming the bureaucracy. i think that we really lose twice that way. we need $1 trillion if we are serious. the proposed cuts are not really cuts. they are cut on proposed increases. we call it baseline budgeting, going up at a medically at a certain rate -- automatically at a certain rate. understanding that they will cut on the proposed increases.

$100 billion per year as opposed to what is happening today, with the budget going up $100 billion in real costs every month. it has nothing to do with cuts. no one is talking about it. right now, they are nearly hysterical about these mandated cuts because of the super committee. cutting something out of the military. there are no cuts proposed. there are only cuts on these wild proposed increases. they are not willing to admit that this country cannot continue to run up a deficit of $1.50 trillion per year that is growing exponentially. if we are serious, we have to get the federal government out of our wallets and out of our lives and let the people spend the money. then we have a much better

chance of regaining prosperity. [applause] >> as you know, i served in the air force between the gulf wars. there is a big difference between defense and overseas military spending. cut the money the -- the money you are planning on cutting, is that military spending? >> this is an important point. as soon as you talk about cutting funds overseas, cutting it from defense, not really. there is a big difference between military spending, oversees spending, and state of department spending. then all the activities, you

cannot distinguish the cia from the military anymore. they control bombings any place in the world. from langley and washington, d.c. it is out of control. military spending is what you want to cut. even have a better sense of this. -- you can have a better defense from this. you are just looking for trouble when we have military spending occupying countries and telling other people what to do, threatening everyone. the admitted it. there is no spot in the earth that is saved. we can hit any single spot or any particular individual. there is a big difference between the two. when they say that he wants to slash defense spending, it is not true. slashing the military- industrial complex, they're making too much profits doing the wrong thing. [applause]

>> just recently, the jobs numbers came out. are we out of the woods? are we all in good shape? >> we wish that we were. i do not think that we are. we are in the middle of a financial crisis correction that is the biggest in anyone's lifetime in this room. unless someone has lived through the total depression, we are on the verge of this being much worse. the financial bubble is understandable, if you understand monetary policy and the federal reserve. bubbles come inevitably. the major bubble has been forming since august 15, 1971, when we severed the last link to gold, which meant that governments could spend and leslie and borrow and print money. the size of government grew exponentially at the same time as the deficit. and the world would be willing

to take the dollar. we had our best export, which was dollars. we bought goods from overseas at a cheap rate. we are now indebted to the world. at the same time, jobs -- 200,000 jobs is nothing compared to what is really going on. this notion of 8.5% of the people being unemployed is fictitious. even if you look at the bureau of labor statistics, they will limit that if you are partially employed, 17% to 18%, including everyone, and the people who are working part time, unemployment is over 20%. the people feel much worse. they also tell us that there is no inflation and prices are

going up at 2%. all you have to do beyond fixed income and social security is see that your standard of living is going down. this is very temporary. the problem is worldwide. even like a problem with china right now. we explored a lot of dollars to -- we exported a lot of dollars to china. they inflated their currency as well. when this came down, you're a fist -- when this comes down -- yes, europe is collapsing right now. all that secretary geithner can do is take care of that and the american people will not figure it out until it is over, and we can bail you out i just printing dollars. they did that in 2008. the people that had gripped this off and made the money, they should have gone bankrupt without you getting stuck with the bill. [applause] we are prepared, right now, for all of europe.

our banks are connected to the european banks. they bought all of the debt that country's like italy and spain. just like we bought up the worthless mortgage debt in this country, they said it was a liquid. no one would buy it. the fed bought it. the treasury bought it. that is major. you cannot turn an economy around until you eradicate the debt overhang. we are like an individual that has borrowed too much money, but all of their income is being used to pay the interest on the debt. they cannot get ahead.

the key borrowing and getting -- keep borrowing for time and getting more and more credit cards. we are at that stage where the debt is automatically going out and the spending is automatically going up and they are not proposing cuts. eventually what has to happen is we have to wipe the debt of the books so that we can get back to work again. right now they are in total denial in washington at what we have to do. because it is uncomfortable and they do not want to understand it. they do not want to have to cut anything. this is why we are in serious trouble. there are answers. sound economic policy in the three more -- free market. the things that made america great and wealthy. we need that, but we cannot do it by papering it over and turning in money. -- and printing money.

thank you. [applause] >> we are going to open it up to questions from the audience. we are two days away from the primary. dr. paul is surging 20% now. it is absolutely critical that we get every vote possible. if you are a ron paul supporter from out of town, please leave it to the undecided voters from new hampshire to west questions, -- to ask questions, please. there should be people in the audience going around to ask questions. >> what is the most devastating diagnosis that you can get in terms of alzheimer's or dementia? what would you do to help stop this terrible disease that is affecting more and more, costing our country billions in productivity every year?

>> what we have to do for all devastating diseases, and i know someone who is suffering from alzheimer's, is that is -- devastating. one, a system that is the most efficient way of taking care problems like that. you have to really challenge depending on the government to do it. the government gets involved and takes over research and development. most of those funds are different -- divvied up politically. drug companies are very powerful. even the good can come from that, it is really not the answer. the change in the medical system that we have now is we are totally dependent on the government. in my proposal for these significant cuts, it does not deal with -- i have priorities that i do try to protect, because we have become so dependent on these. social security, medical research, and child health care.

i am trying to get a system where we can work these out and take care of people like that. whether you are sick or not sick, you will not get anything. and social security will collapse if we collapse our currency. whether it is alzheimer's, cancer, whatever, the most efficient way to solve those problems is not your dependency on government. all of those funds are allotted for political reasons and on not necessarily the most efficient. if the government is on our way and we became prosperous again, instead of a shrinking middle class, they would be more fun. -- there would be more funds. and stock with hospitals that are run by churches and others? -- if we would have stuck with

hospitals run by churches and others, we wouldn't be facing this crisis. even with the problems that we have in texas, we have a hospital, with difficult problems -- would be much better if there was a free and prosperous economy? we work these problems out much better before 1965. [applause] >> nice to meet you. our question is, with a volunteer fire department, how would you replace them? especially the department of education.

>> ok. she is talking about the fire -- the five department's i want to get rid of. what would we do to replace those responsibilities. for the most part, i would not want to replace them. i do not think that we need a department of education. what i want to do is go back to the assumption that it is not the proper authority of the federal government or their ability to tell your parents how eat it -- how to educate you. it should be the responsibility of the parent. this would mean that if people become unsatisfied and, we have to protect the right to be home schooled, schooled in private school, or whenever. once again, when the government gets involved, in medicine, education, or housing, it does not increase the quality.

what it does increase is the price. prices go up, but the quality does not go up. in we do not want to give up on them, but we want them to be delivered in a different fashion. we are not convinced that the government is very good at delivering these goods and services. this would mean that if people get worried and say that a lot of federal workers will be laid off, that would happen. but they do not get laid off immediately. we want to gradually reduce their workforce. they are not doing productive work. we want people to work in a free-market economy and do productive work. it is a matter of how you deliver the goods and services and there is no evidence whatsoever that government is good at doing that job. [applause]

>> there has been a bunch of talk about lowering the corporate tax. we have a company like general electric with 60% of their products made overseas. how is lowering the corporate tax, given the fact that they do not even pay one on their structure and loopholes -- they do not pay anything. how does lowering the corporate tax bring jobs back to america? >> you are a corporation and our international. they probably pay taxes overseas at a lesser rate. we penalize them if we want them to come here and build a plant at home. then they will have an additional tax and their tax twice. we are one of two countries that does that, taxing the return on capital. you have to have capital to start businesses.

it cannot come out of a printing france -- printing press. keynesian liberals believe the you can get capital out of the federal reserve by printing money and it does not work. you want lower taxes, but you want lower taxes for everyone. without an income tax, everyone would have more money to spend. [applause] in many ways, we chased businesses overseas. we do it through currency manipulation and the fact that we have this reserve currency. it is a detriment, and you cannot do it with the monetary system. businesses can be started in china and other countries. here it would take three years to get a business started. not a healthy climate.

they will go overseas. and as far as the rich to have benefits, i put them into two categories. some of them are very rich. they have a lot of money and they manipulate the inflationary system. they make money off of you by getting contracts from the government or the military industrial complex and are very much involved. if a company is big because it delivers a profit at a good price and you and i reward them by buying their product and they get rich, we do not want to punish them. that is earned capital. we should encourage them to stay. take these companies that made a lot of money in the derivatives market on speculation, and then they went bankrupt and went to the governme a