Senator Rand Paul’s Interview on All-In Podcast (Transcript)

That movement was burgeoning in 2010. The big radio talk hosts were Limbaugh and Hannity. And Hannity, still big on the radio. These hosts were out there hosting rallies. They were talking about the Constitution, and it was an exciting time.

I don’t know if I had announced yet. I was thinking about it. My town’s fairly small, 50,000 at the time, and we have an old square built in the 19th century. I went down to the square. Somebody was having a Tea Party rally. I didn’t know what it was, and it was open mic. I wasn’t even invited to speak, really. And I spoke and there were 800 people there.

I’d never been to a political rally in my town, Republican or otherwise, with 800 people. There was a real movement. That’s why it kind of makes me sad now that it’s a movement that came and, you know, did it go, came, conquered, and nothing happened because some of the people left and some of the people decided that debts were okay if you had a Republican in charge and were bad if a Democrat was.

Political Philosophy: The “Leave Me Alone” Coalition

DAVID FRIEDBERG: That’s really interesting because I wanted to get to your core philosophy and identity. On Wikipedia, it says libertarian, Constitutional, conservative, Tea Party movement, Republican. How do you describe yourself, your identity, Senator?

SENATOR RAND PAUL: All of those things are true to a certain extent. I like to say that I’m part of the “Leave Me Alone” coalition. And then sometimes I’ll say, you know, really, I’m part of the “Leave me the Hell Alone” coalition. And that means in all sort of aspects, personal, private, my contracts, my business, what I do, my family. Just leave. Just leave me alone. And that encompasses a bigger group than just conservatives, a bigger group than just libertarians.

And I would say there was a long time ago, there was a guy named Frank Myers, and Frank Myers they called a fusionist. He was a guy who was going to be somewhere in between Buckley and Murray Rothbard. Murray Rothbard is not as well known, but he was a student of Von Mises and he was a libertarian writer. And Buckley, everybody knows who Buckley is. And that became the more traditional conservative movement.

The libertarian sort of said, “Well, we like all that capitalism, everything. But we’re worried if so much money goes into the military, that maybe the military will become the state also. And that we’re really against the state in all facets. We want a small state. We’re for defending the country, don’t get us wrong. But…” And so, but somewhere in between those two, some of the libertarians would have no military. Some of them would have open borders. And then there was the conservatives that somewhere in the middle was a fusion. And Frank Myers was a part of that.

It was one of the cool things. When I first came up here, they invited me to the Frank Myers society, society, eight guys that were 80 and 90 years old. It was such a great dinner club.

Operating in Washington D.C.

DAVID FRIEDBERG: Does that make it hard to operate in D.C. to be fusion? Because the kind of mechanism, the operating model in D.C. seems to be policy by party. You have to be a member of a party, and then leadership sets the agenda and everyone falls in line.

SENATOR RAND PAUL: Yeah. And I think that’s really disappointing about it. And I think a lot of the public doesn’t necessarily like that. And that’s why a lot of the public says they don’t like either party.

I’m of the belief that, right now, there’s a great danger in our country to losing a movement that represents the free market, trade and capitalism and all of those things, because I think we’re moving towards a movement that backs a person. And I feel the wrath all the time. I don’t back Donald Trump enough. And so I’m to be, you know, I get along with Donald Trump actually on a personal level, better than some of his supporters who’ve gone crazy.

And they don’t seem to remember. I’ve supported a lot. I’ve supported his nominees. I voted against his impeachments. I was one of the loudest voices against them. And yet they can’t stand if I oppose him on one thing, that’s not good.

The Importance of Free Trade

And also, there is something. Trade is not an incidental issue. Trade is sort of a fundamental aspect of capitalism, and Adam Smith wrote about it. In fact, one of Adam Smith’s sort of great nuggets that he gave to the world was the idea that the division of labor makes us richer.

So if you don’t have to sit around making your shoes or your clothes or your tie, you can do something out, you have time to think, and your innovation is going to create more great things. But he also said that the division of labor and the prosperity that it creates is only limited by how far it extends. And I think what he meant by that is by trade.

So we, you know, I’m richer in my town because I don’t make my shoes. Maybe somebody else in the town makes them, and I’m even richer when somebody in another state makes them. But guess what? I got even richer when they were made in Vietnam. We all did.

And that is being. Now the fallacy is being promoted that trade is bad, which really essentially means capitalism is bad. Then we got people promoting that we should own the companies and the government should be involved with ownership of the companies, all that stuff. It worries me that people are going to forget what we once were for and what really is important to be for. What made America great, and that is capitalism.

Addressing Protectionist Arguments

DAVID FRIEDBERG: Some would argue that this idea of what they call the globalist agenda, which is to outsource our jobs versus reducing our cost and increasing availability of goods and services that we can benefit from has hollowed out America and has caused a great economic depression for many Americans and they can’t seem to find their way out of it unless we create a more protectionist trade environment.

SENATOR RAND PAUL: There’s a lot to dislike about globalism and what that represents. And to many people, and to many, even libertarians, if it means big, huge treaty organizations that have labor rules and environmental rules and all these anti capitalist rules in them, that’s not really free trade or free market.

But I will say that there is a fallacy, it’s repeated ad nauseam and it just is absolutely untrue. And the facts will bear this out. Most people are for the protectionism. Say middle class is being hollowed out and we’re being ripped off. They’re both absolutely and unequivocally untrue.

So if you look at household income and there’s a good website that does this, humanprogress.org, we’ll look at this. Steve Lincecome at Cato is great on this. Look at household income for the last 70 or 80 years and you look at what percentage is middle class, what are lower class and what is upper class?

The middle class. Fifty years ago, about 54% of the people in the middle class and now it’s 51%. Everybody’s like, “Aha, the middle class is shrinking.” Well, the lower class was 37%. It’s now 33%. It’s like, where did they go? They’re being hollowed out. Yes, they’re becoming rich. They’re in the, they’re in the upper class. The upper class has grown. It’s the one segment and you have to constant dollars and call the upper class above $100,000 and the middle class 50 to 100.

But really there’s been a grace increase in wealth. If you look further at things clothing, you buy, you know, people, oh, hey, we lost the textile industry. Well, I think that’s sad in a way, but you can get 10 times as many clothes as a person in 1900. Could we live twice as long? We are by historical standards one of the best char prosperity per unit of GDP or something. And you look at it and people have called it, I think Jonathan Haidt called it the greatest, you know, graph in the history of the world.

DAVID FRIEDBERG: Steven Pinker highlights this same thing.

The Economics of Trade and Prosperity

SENATOR RAND PAUL: Pinker does it as well and he’s great. His book “Enlightenment Now” is an amazing book. But anyway, this chart is for all of human history. If this is prosperity and this is time for all of human history, we lived on the X axis. It’s just an amazing chart.

In about 1820, when the division of labor allowed the industrial revolution and people to think about doing other stuff, you just had this. It really is this curve that just is extraordinary. That’s the history, but nobody wants to hear. It’s like, “Oh, we’re being hollowed out and trade’s bad.”

But then the second fallacy is we’re being ripped off on trade. And this one I think is pretty easy to debunk. A million people go to Walmart last week, next week, and they all buy TVs. At the end of the year, you say they all bought Chinese TVs. Let’s put a circle around all of these trades and the country they came from. Chinese didn’t buy crap from us. We’ve got all these TVs, but a million people went in and made a voluntary trade where when they left their $600, they wanted less than the TV and Walmart wanted their $600.

Every voluntary trade ever made in humanity, every second of the day is all mutually beneficial or it doesn’t occur. It’s not even an equal trade. It’s mutually beneficial. We both think we got it. So how can a million people all think they got a great deal and make a trade? And I draw a circle around them and have this false accounting that says, “Oh, we all got ripped off by China.” It’s just not true.

DAVID FRIEDBERG: So what is the origin of the fallacy? Is it a political tactic to drive votes?

SENATOR RAND PAUL: It’s pride. And that’s why I have such difficulty counteracting this now. What amazes me is though, for 100 years, economists right, left and center all decided that trade was making everybody wealthy. It’s more visible if you look at the trade of the people who are poor. So the poor people got astronomically. They got. Their multiple is much bigger because they were much poor to start with.

But if you look at China and us from 1975 on, we both got richer, but China was so poor that their richness is more available. They didn’t rip us off. You know, this isn’t love of China. I wrote a book called “The Case Against Socialism.” I hate socialism. I hate communism. I wish the people there didn’t have to live under that authoritarianism, but they didn’t rip us off.

And it’s easy to sell because nationalism is easy to sell. Patriotism is easy to sell. We hate the other country. We’re good, they’re bad. And also anybody down on their luck and I’m not saying, well, the historical trend is great for the society, middle, lower and upper. It’s not great for everybody. So there’s always being people aren’t doing well. Those people are attracted by nationalism and they’re attracted by blame somebody, don’t blame myself or don’t blame anybody else. Somebody else’s fault.

The Consequences of Tariffs

DAVID FRIEDBERG: So walk me through the consequences of tariffs. Where do they take us? Where do they take the economy? Where do they take us? From an inflation perspective, from a job creation perspective, on shoring, which has been argued as another piece like, what’s your view on where this is going?

SENATOR RAND PAUL: You know, one of my favorite sort of people complain. I get a lot of complainers right now by the tariffs because they love the president and they don’t love my position so much. And really, 75, 80% of Republicans, he sold on this issue that tariffs are good. But there’s a. I guess I’d start at the macro level. So you have $7 trillion in spending for our federal government, $5 trillion in revenue. So we’re $2 trillion short.

DAVID FRIEDBERG: Two trillion.

SENATOR RAND PAUL: Yeah, $2 trillion. It used to differentiate conservatives and Republicans and Democrats. We as Republicans would say, yeah, deficits are bad. Let’s close it by lowering spending. Democrats will say, we’ll just tax rich people. You know, rich people don’t pay enough in taxes, which is also untrue. But then we’ll do it that way. That was how what differentiated us.

But now everybody’s like, “Oh, gosh, tariffs are so good. We’re going to balance the budget. We’re bringing in revenue.” One, it’s really a pittance. I think it’s about $100 billion, $150 billion more than last year is what’s going to come in this year. And that over 10 years might be $1.5-2 trillion, but we’re going to borrow like $15 trillion over the next 10 years.

But when you look at it and you say from a global point of view, is it good to raise taxes? Most Republicans always said we didn’t like more taxes. We were taxed. That was part of the Tea Party acronym is “Taxed Enough Already.” We don’t want more taxes now. Everybody wants more taxes. It’s inconsistent with who we are.

But it also. The other one I love is that we’re going to do it and we’re going to eliminate the income tax. And I say, come to me with that. I don’t like tariffs very much, but I’ll vote for a 20% tariff. You know, I take a sale. It’s a sales tax. I’ll take a sales tax over an income tax. This is being presented in addition. So everybody needs to forget what they think they’re saying and understand the tariffs are in addition.

Constitutional Concerns and Presidential Emergency Powers

But there’s also an argument on the separation of powers. One of the things our founders really struggled with was they worried about tyranny of one person and tyranny of the majority. And so the way our government is structured is to try to, as Madison said, pit ambition against ambition. But I think they never imagined that we’d have a Congress without any ambition. We just basically said, “Oh, President Trump, go ahead, just do what you want.” And there’s a problem with that.

He’s declared an emergency to raise taxes. I said, “Oh, we don’t pay the taxes.” Bullshit, we pay the taxes. But you know, there are people analyzed as a little bit done by the foreigners, a little bit done by the importer, a little bit. Yes, but it is a tax, it’s a fee, and we collect it here in our country. It is a tax. The Constitution says taxes originate in the House. And you know, this one just originated with the President with not even a confirmation by the House or the Senate.

When we get an AOC as a president, which I hope never happens, she’s going to declare an emergency and she’ll say, no more gasoline powered cars or lawnmowers or whatever else, and they’ll send police to your house. So say, “I’m just doing an emergency, just like your president did.” So there is the danger and people need to think about it. And this is where the precedent.

DAVID FRIEDBERG: The precedent.

SENATOR RAND PAUL: Well, this is the problem with only being tribal and only being for your tribe. When your tribe is in power, you have to think beyond this. So, for example, when Biden was in power, there were two dozen Republicans and I was one of them who had a reform of the emergency power. That said, when a president declares an emergency, it expires in 30 days unless affirmed.

Right now it’s the opposite. The president’s declared an emergency on tariffs. If we wanted to stop him, we could vote by simple majority. He would then veto it and then it would take 2/3. So right now, the way the law is set up is presidential emergencies can only be stopped by 2/3 of Congress. Well, I mean, that’s so dramatic, it almost never happens. We’d like to reverse it, but all those Republicans who supported reform of the emergency under Biden have all bailed on me.

And so when we recently had a vote directly on whether or not there was emergency with Canada, I was one of four Republicans. And most of the people who had signed on to the emergency reform all of a sudden didn’t care that there was an emergency under a Republican president. And none of this is to say I dislike Donald Trump. I actually like him very much as a person. Play golf with him, support probably 80% of what he’s doing. Do I think he’s better than Harris? Oh, gosh, just a million times. I mean, I’m doing anything to stop socialism and the redistributionist, but doesn’t mean I should just roll over and no longer have a thought.

DAVID FRIEDBERG: Have you tried to align with the Democrats to try and get this emergency?

SENATOR RAND PAUL: It’s not trying to align with him, but when they’re right, I vote with them. They had an emergency to overturn the emergency and I voted with them. It’s a privileged vote. And very rarely can people who object to the majority will of either party get votes. The only way you get votes is by using special procedures. So the emergency vote to overturn an emergency has a privilege meaning that it has to come to the floor. So I voted with them. There were four of us, four Republicans that voted with them.

The Big Beautiful Bill and Debt Ceiling

DAVID FRIEDBERG: You were also pretty well known recently for being one of three Republicans to vote against the big beautiful bill.

SENATOR RAND PAUL: Right.

DAVID FRIEDBERG: Maybe you can just share the parts of the bill that you were opposed.

SENATOR RAND PAUL: To increase the debt ceiling by $5 trillion. This is not only extraordinary, but unheard of. No conservative in their right mind would ever vote for this under Biden. In fact, when Biden did propose to like this, all the conservatives voted no. So we sort of lose who we are if we don’t keep the same standard under the same presidents. $5 trillion.

But a lot of people don’t know this, but up until the last moment, my vote was still in play because I told him I don’t like a lot about it. It’s also going to add to the debt. And I think that is true and we can go through that in a minute. But up until that morning I met with Vance, that morning Lisa Murkowski was demanding more stuff for Alaska. I didn’t want anything for me or for my state in a parochial way. I wanted something for the country was not not add so much debt.

So I said I’ll vote to increase it $500 billion. And even that’s like sticking a dagger in my heart. $500 billion used to be a year or two years. Now that’s three months. And they said they didn’t want it. I had long conversations with the President. I spoke with him for 59 minutes the week before, I noted, I looked at my phone, my wife’s standing in the kitchen. And he spoke for 58 minutes and 45 seconds.

And he’s didn’t need the debt ceiling. The Democrats will never vote for it. I don’t want to do it again. It’s inconvenient. You know, I don’t want to talk about the debt ceiling, but I won’t talk about it. I’d vote on it every three months. Not that I want us to default, but because every three months we need to talk about how we’re out of whack. We need to talk about why, you know, why are these credit agencies downgrading the dollar? What happens if there is a dramatic flight from the dollar?

The thing about economics, I don’t claim to know even a tenth of what smart people know, but things don’t always happen gradually. You know, if you think in your lifetime or my lifetime of the different corrections in the market, they came in one or two days, you know, 2007, 2008 came in like a day or two, right? There was one in the 90s, there was 1929, I think somebody told me almost all the losses in the stock market, if you take like seven days of the last century, it’s like 95% of all the losses are in like seven days.

But it could be worse if there’s ever a flight from the dollar. And people are talking about that. They have bond sales, you know, they talk about how many people show up. There’s some kind of ratio, and it usually, it’s like, I don’t know, 2.5 to 1 or something. It was in the low twos, 2 to 1 of not many people showing up. Interest rates are still, you know, pretty, pretty high.

But what I’ve always fascinated by is people say, well, the interest rates are so high. But I was always taught historically that the interest rates are inflation or expectations of inflation plus the historic rate, which is about two or three points. If I take money from you for 30 years, you’re not giving it to me for less than two or three points. But you also want inflation, too. So you want three points for inflation into what’s. That’s about what interest rates are. So I don’t think anybody knows whether interest rates are too high or too low. I think that’s a silly question. But if you looked at it in historic terms, they’re about probably, you know, the market’s judging them to be expected inflation plus about 3 points.

Historical Cycles of Empire

DAVID FRIEDBERG: But just going back to the big beautiful bill and your vote against it. I just want to understand how we got here or your view on how we got here. So you’ve read a lot of history, a lot of philosophy. I interviewed Ray Dalio twice.

SENATOR RAND PAUL: I’ve met him.

DAVID FRIEDBERG: He’s a fascinating guy talking about his cycle of empires. And his kind of thesis is we’re one of six cycles over the last 500 years, and we’re kind of at the. The tipping point here. And there’s a set of trends that are very common. He says, you know, “different characters, same act.” You know, like it happens over and over again. And we take on too much debt when we. The country gets wealthy, it grows and the economy expands. We start to get offered free money. We take it, we spend it.

The Debt Crisis and Social Security Reform

SENATOR RAND PAUL: All of a sudden, one of the things we had a dinner, bipartisan dinner with him recently, and one of the things he’s saying is the way to get out of it. What we have to do is we have to get, and this isn’t even, I think, draconian, we have to get 3% our debt, our annual deficit needs to be 3% of GDP. Well, it’s 6% now, so it has to be cut in half. And I think it’s very reasonable. And a lot of people nodded their heads. But it takes a tough vote.

Like I voted to raise the age of Social Security. And people say, “God, do you hate old people?” I say, “No, I aspire to be an old person. I want my Social Security and I want the system to be around for ordinary people.” But it’s not going to be around unless you raise the age to 70. That’s the only way it sticks around.

DAVID FRIEDBERG: Is it that in order to get reelected, you have to offer your voters something that they don’t have today, and therefore every election cycle you have to show up with something else. No one ever gets elected by saying, “I’m going to cut back half or cut back a quarter or 10% of what you’re getting today.” You might, but is that the dynamic?

The Politics of Fiscal Responsibility

SENATOR RAND PAUL: I’m pretty positive that you don’t have to say, “I’m going to bring them the bacon.” I’m going to bring you your freedom. I’m going to keep the government out of your lives, and I’m going to allow you to become richer because freedom and capitalism makes us all richer. And I’m going to allow you. And it’s going to be mostly on merit, which is better than the government deciding that. So I think you can say that, and I’ve said it explicitly, I will never go home with a check saying, “We brought you this to your community because we don’t have it and it has to be borrowed.” That makes us all poorer through inflation.

It is that fear though. And the president has bought into this. The president says Social Security, we can’t talk about. Medicare, we can’t talk about. And really on Medicaid he severely limited what could be talked about. Food stamps, they nibbled at it. They talked about some good things, but most of it’s in the distant future.

And here’s the bottom line. I voted against the big beautiful bill because of the debt ceiling. But also here’s the projections. The CBO had a projection that was going to add 3 trillion. All the Republicans said, “Oh, CBO has too low a grade throat. We can’t. We believe the CBO.” Well, the authors of the bill did something I agreed with. They said we’re doing it based on policy and this is what we project, that the taxes will go on and that they aren’t really, we’re not giving a tax cut. Most of that is just keeping the same policy as I accept that.

So what are your numbers? The authors of the bill, the Republican supporters of it said, “Well, the first 10 years, no, the first five years it’s going to lose 500 billion. So we more 500 billion more in the hole. The second five years we’ll make that up and we’ll go a trillion positive. So we’ll be plus 500.” I believe the first five years. I don’t believe the second five years. And this is from the authors admitting.

And the reason, you know it’s going to lose 500 billion is this many tax cuts will pay for themselves over time. But almost all of them have a little bit of dip in revenue in the beginning. It’s not a reason to be opposed to tax cuts. It’s amazing to at least be wary. Even if you don’t count the tax cuts that we already had that we continue and you count the new ones, there’s going to be a little dip in revenue. And maybe some of these weren’t that growth related tips and things like that may not be that growth laid to reduce tax on tips. So that’s going to be a dip down.

But the other reason why, you know, the deficit is getting better. They put 500 billion of new spending. So from the very beginning this was, this was Lindsey Graham and the military industrial complex. They wanted more money for the military. They already got an increase in the military last time. There’s 150 billion for the military and 150 billion for the border, which I’m for controlling the border. I applaud the president for controlling the border. He didn’t need the 150 billion who made, you know, 20 billion would have probably been enough to secure the border. But nobody’s conservative when it comes to this.

DAVID FRIEDBERG: I saw your hearing where I think you challenged the bill. The amount. Yeah, the wall. Because you kind of went through the numbers and it was pretty striking.

SENATOR RAND PAUL: That it was on their website the next week. They changed their website because they didn’t like me reciting their website back to them.

The Debt Trajectory and Interest Burden

DAVID FRIEDBERG: Right. So where are we headed? 37 trillion of debt. If the debt gets financed at 5, 6%, which is kind of where interest rates are trending, we’re talking about an incremental trillion dollars a year of interest expense. Interest expense will probably become 2 trillion a year. Right. We don’t seem to be cutting the budget much. Everyone wants more. Everyone wants more budget for their particular interests and their states and whatnot. What’s your view on where we’re headed over the next 10 years, barring a lot of Rand Paul’s getting elected to.

SENATOR RAND PAUL: Yeah, the left, you know, has this modern monetary theory and it sounds ridiculous and it is, except that it kind of worked for 10 or 15 years. So Bush doubled the debt from 5 trillion to 10 trillion, but the interest rates went in half. So his interest payments the same. You know, we went, we went from 5 to 10 trillion with the same interest rate. We played a lot of games to do something similar. So for the last 10 years or so, or maybe eight years, we averaged. Our payment was like 1 1/2% for the debt. That’s what we were paying. Now it’s three and a half. That’s a pretty significant jump. But I think if they stay where they are, it’s going to be even more.

So we’re at a trillion in interest now. Could we go to two? And what happens? All of these things are fixable. America is a great place because of capitalism. We just need to start fixing them. And it’s not even draconian, just a little bit at a time. You know, for 12 years I’ve been saying just raise the age three months a year for the next 20 years and you’ll be at 70. You may eventually have to go higher depending on longevity.

The other thing you have to do is the age doesn’t fix Social Security anymore. You got to means test it. And the only difference we have with the Democrats on the means testing. Well on all of it. If they would agree to any reform. They just want to tax rich people in the beginning. So there’s a limit. Your Social Security taxes go up to about 160,000 and they’re indexed to kind of keep creeping up a little bit, which I can live with that. But if there’s a choice whether rich people get less Social Security in the end or we tax them up to 10 million, I’d rather do it in the end because somebody making 10 million is investing and creating a lot of jobs and I’d rather not stop that.

But I don’t care if rich people have, including me, and I’m not that rich, but I’m upper middle class and I would get less Social Security also. You can fix the system that way. And I think we are so dependent on it that it’s hard to go back to a pure system where we develop. It would be worked on charity and private pensions. But we got to get started on it. The longer you wait, the more difficult it is to fix.

The Point of No Return

DAVID FRIEDBERG: Is there a point of no return that you view as there your or a debt amount to GDP, a debt ratio? Well, there’s never.

SENATOR RAND PAUL: Well, there is a point of return of no return for a catastrophe. And I don’t know that if I would, I’d be predicting the day and then I’d be fine. And everybody else would get, you know, killed by the calamity. I don’t know. You got to be really smart or lucky to predict those calamities. Like the people who saw the housing crisis were really smart, you know, and they figured that happening. So I don’t know that it is going to happen.

But I think what’s important, and I tell people this all the time, you always get your Social Security check, you always get your Medicare. It will never end, but it just may not be worth anything. So there will be a point in time when we cut to your check and there are COLAs. But what happens when if you’re in 1923 in Germany and you get annual COLAs, it didn’t work so well because the money was losing 30% an hour. You know, there were times when the German workers in 22 or 23, they want to be paid at noon because they didn’t wait till the end of the day because it was depreciating so fast.

COLAs work for a while, but the cost of living increases. But they are somewhat of a game. You have a problem. You’re creating this inflation. You hate to punish people. So you give them a COLA, but the COLA comes once a year. Part of the breaking point for all this stuff that has COLAs on is when you need to do it every month. Yeah. So that’s much higher inflation and we’ve been extraordinarily lucky and I’ve never really seen.

But he write this as, as, as I think detailed as that could be. I think we’ve exported our inflation. I think we’ve created so much more inflation than we have. But because we import more than we export, we pay them in the dollars. Some of them find their way back into our stock market, put our stock market up. But you can go to two dozen countries around the world and they’re trading in your dollars. So the actual physical dollar never comes back on some of these trades.

And so I think if you took what the M1 is going up. What the money’s going up. I think you looked at it, some of it disappeared. Then they play the games with paying interest to keep it in the Fed, which I’ve got to build to eliminate that right now. And that bill’s co-sponsored by Bernie Sanders. We paid 188 billion the Fed did in interest to banks, not to loan money. Most of it went to five banks in New York, the big five, but 40% of it went to foreign banks. So the Fed’s buying our interest with fake money. The taxpayer still has to pay the interest back to the Fed. The Fed used to use it as profit and give it back to the Treasury. And it’s a weird game. But now instead of at least playing the weird game, they’re giving it to rich people. So this is something reminiscent of the Occupy Wall Street movement where you got right and left coming together.

The Dollar’s Declining Reserve Status

DAVID FRIEDBERG: The free market is not dumb to this. It’s the. So the global free market dollar reserves, according to the IMF report on central bank holdings have declined in the last decade. So it’s been shown the dollar reserves have declined from 60% to 40% in the last 10 years. Meanwhile, gold has doubled from 10 to 20% of central bank holdings. And as a result, we’re seeing gold prices, I think 3,600 bucks an ounce as of yesterday. What do you think is the path here for the dollar? Like maybe we can just kind of talk to the average person listening, where’s this taking us? Because the market wakes up to this and they’re saying these dollars aren’t really what they used to be.

SENATOR RAND PAUL: I think there are two scenarios. One is the one we’re used to and that’s the gradual scenario. Then the Fed tries to intervene to try to control inflation. I think they can. But I’ve always asked this question to very smart bankers and things. Is there a point in time at which the Fed doesn’t control interest rates? And many times they’ll say, “Well, the Fed doesn’t really control the long term interest rates after the daily stuff that it’s really controlled by the marketplace.” But when is there a time in which it just becomes out of control?

So you have the government shows up and says they want to sell 20 billion worth of debt. Nobody shows up and the Fed has to buy all of it. I think right now of our 36 trillion debt, the Fed has about a third of it, foreign governments have about a third, and then the marketplace has about a third. What happens when, when, when, when the private marketplace doesn’t show up? Is there a time in which you have a Friday, they do this on Fridays. I think you do a Friday sale and nobody shows up. The Fed buys the whole thing. What do you think happens to that Monday? Do you think you’d be trying to prepare to sell, sell some stock, you know, overnight before Monday opens? And then I think you could have a calamity.

And some of it can be fixed and some of it, we live on a house of cards because, and most people don’t know this and I don’t want to scare your audience. Will this scare your audience if I tell too much?

DAVID FRIEDBERG: It’s great. It’s going to get clicks and views. Yeah.

The Fractional Reserve Banking System

SENATOR RAND PAUL: This is very scary. So you have $1,000 in your checking account and you go to the bank and you want all of it. That only works if a few of you go, because the bank, I think, only holds 10% of your checking account.

Now I want the bank to loan money. So I give them $1,000 in a CD, they pay me 2% and they loan it out for 3%. That’s how banks traditionally make money. But they have a game. I have a racket, it’s called fractional reserve system. And it works until it doesn’t work. And once a bunch of people go crazy, a bank run. And we’ve had bank runs even back in the 19th century.

DAVID FRIEDBERG: We nearly had one with Silicon Valley bank two years ago.

SENATOR RAND PAUL: Exactly, exactly. But it’s really based on that. And I haven’t been as involved exactly with what the rate should be, but I think loaning out 90% of your checking account is a recipe for a bank run. We don’t have it because we just print more and we flood the system with liquidity when people get skittish. But there’s a time at which they can’t control that. And it’s coming.

Government Spending and Fiscal Responsibility

But I try to get back to simple things because I don’t know when that’s going to happen. Maybe it’s not going to happen. The simple thing is you spend what comes in. Most people do. You borrow if you have an asset that the bank can hold, like your house or something, this is what normal people do and they spend what comes in. Your government should behave that way in the same way.

There are ramifications to you personally. If you overspend, you’ll ultimately be punished. It’s going to happen to us. And so the first thing we do, we don’t even need to think about the $36 trillion. We need to think about the $2 trillion we’re borrowing next. And that number needs to be smaller.

But I can tell you people aren’t getting it. I went, I asked the secretary, the treasury secretary be sent about this. I said, “You guys are spouting all these numbers, a big beautiful bill and it’s going to be great and there’ll be no more debt and all the Saudis are going to invest $20 trillion in our country and we’ll all be rich.” And I said, “But the number I’m concerned about is will the deficit be bigger or smaller next year?”

And he said, “Well, in terms of the GDP it will,” but even that’s not going to be true. The deficit next year, this year, the one we’re in, is going to end in about three weeks, is going to be about $1.9 trillion. That’s going to be about $150-160 billion worse than last year. And as a percentage of GDP, I think it’s going from 6 to about 6.2. So we are getting worse.

I don’t say this because I want to be mean and get the wrath of Donald Trump. I say this because as Republicans, we need to be for balanced budgets, less spending, no matter who’s in the White House. And it’s going to take some back and forth with the president to get there.

Government Employment and Spending Challenges

DAVID FRIEDBERG: Well, I want to introduce another kind of frightening metric and statistics. So by my estimate, and this is not reported by anyone, this is just me doing some addition in an Excel spreadsheet, somewhere around 40 to 50% of the American workforce, age, population earn their income from directly from a government or a government contractor. If 40 to 50% of Americans are employed directly or indirectly by a federal, state or local government or government contractor, or earn their income from a government check. Can we actually reduce spending?

SENATOR RAND PAUL: And this is a real problem. When you look at our spending as a percentage of GDP, the spending part, the $7 trillion, the average over the last five years is about 26%. Right now we’re at 23 or 24% of GDP. And I love it because the people say, “Well, we’ll just have tariffs and we’ll run the government off tariffs.” And I said, “Well, when they did that in the 19th century, government was 3% of GDP. I’m for that. You bring me spending bills and I’ll vote for all of them to make us a 19th century government of 3% of GDP and I’ll vote for all your tariffs.”

But that’s a big change and it is a problem and it’s sort of a twofold problem. The people actually working for government, you got to make government smaller. So we don’t have as many government jobs. But the other segment is worrisome, if not more. And that is the people not participating in the workforce. They’re getting money, but they’re not participating. And it’s like 38, 40%, 42% depending on the state. So 40% of the people eligible to work, able to work and not working.

Immigration, Labor, and Economic Policy

And this is, libertarians had this debate like, what do you do? They don’t, some of them don’t want any border controls. And they say, and my dad used to say this, and I kind of agree with this part, you need to build a wall around the welfare state and don’t give any people coming into the country illegal any access to your welfare state. I still agree with that part. I think you still have to have border security too. And you have to push back on millions of people coming all at once.

But there is a problem. If you had, like for example, and people will tell you this in that have tomatoes or anything else, the things that require hand picking, you won’t have enough people. But you would have enough people for Americans worked, but a whole chunk, 40% of them aren’t working. But if you want to expel 20 million people from the country and do that, you have to simultaneously quit paying the people not to work or you won’t have enough workers.

There is also this argument. There was an economist by the name of Julian Simon who’s a big promoter of this population is actually proportional to wealth. So is trade, you look at big, large charts over decades and decades. The more trade you have, the wealthier you have. The more people you have, the wealthier you have.

And there was a famous bet between Paul Ehrlich and Julian Simon about five different commodities and whether they’d be more rare after like a 10 year period. Julian Simon, the libertarian economist, wins his bet because basically the real, he said, “The real resource, the real ultimate resource is the mind. It’s ingenuity.”

Nobody would have imagined, even in my lifetime, the whole concept of AI. We didn’t imagine smartphones or cell phones. We didn’t imagine all these things. And we’re going to have these big debates, maybe bigger than everything we’ve discussed, is whether or not we’re going to succumb to the Luddite philosophy or whether we’re going to believe that we will not only overcome but technology. We will succeed in technology.

It doesn’t mean you can just sit there and do nothing. You have to adapt with the times and move forward. But we’ve, the people breaking the looms were wrong.

AI, Technology, and the Future of Work

DAVID FRIEDBERG: Using this transition with AI in our economy and our society will actually create such significant productivity gains that jobs will proliferate, that we can get people off of the welfare, off of government jobs and into the private workforce because they’re.

SENATOR RAND PAUL: I don’t know if it fixes that problem, but I am of the opinion that I don’t fear technology in general. And I was having this conversation really with one of the world’s richest men and he told me, “Yeah, that’s fine. And I’ve been with you and I’m not for the Luddites except for,” and I said, “Well, the humans, you got to have humans to make the robots.” He says “The first generation, the second generation of robots will be made by the robots.”

And I guess it doesn’t resonate with me because I have such a profound belief in the ingenuity of mankind that I think it is limitless. And I don’t think that we need to smash the computers. I don’t think we have to break, somehow shut down the chip companies and say we’re all going to be out of work.

I do think, though, there’ll be a time that we will have such great leisure that we will actually choose to work. And I always tell people this anyway, I want everybody in America to work not as punishment, but as reward. There is a reward to working. And I think even if all jobs were eliminated, you have sort of like secret societies where you can go someplace and it’ll be underground and you have to do it under threat of death, but you can go and work.

DAVID FRIEDBERG: People who want to have work, yoga classes and Pilates classes and massage therapists and many of the luxuries that we take for granted today, that simply didn’t exist 100 years ago when the industrial revolution, the second industrial revolution was underway.

SENATOR RAND PAUL: Right.

DAVID FRIEDBERG: And as we fast forward the next few decades, I think our life, and this is one of Pinkner’s points, is just labor per capita, like labor hours, has gone down steadily. We’ve given ourselves more free time with the leverage we’ve created on.

Productivity and Human Progress

SENATOR RAND PAUL: He does this, and so does Marion Tupy at Human Progress. They talk about time hours. And so did William Nordhaus was the famous example, maybe the first from Yale. He was the economist who wrote about how many hours of work it takes to get light for a year to read by. And it was like in the 19th century because you had to have candles and it was like 10,000 hours of work. Or maybe it was a thousand hours of work to have nighttime light to read by. It’s 10 seconds of work gives you an entire year’s worth of light.

That productivity increase, nobody could fathom. And all the Luddites hate that kind of stuff. And it’s like, “It’s not going to happen. And we need to take the pitchfork and the ax to the computers now.” We’ll figure it out.

I do think, though, that the AI people, and once again, I’m not a genius on AI. I don’t write code. I don’t know that. But I think it’s overstated that how great AI is going to be. I think it’s going to be a lot of cool things. And I think some people are going to get caught. We’re going to have too many data centers at one point, and I don’t care how much electricity they’re sucking. But at the same time, I think we have too many of them because people will say, the one thing I see they do really well now is they are great adjacent to things.

I’ve looked up political questions even today on what happens if we hand the reverse reposition at the Federal Reserve. And it gives a pretty good explanation. It’s faster. It isn’t smarter than humans. It’s much faster at doing the search that I could have done manually by using the Google search engine. But these things just kill and I wonder whether that’s.

Market Competition and Technology

DAVID FRIEDBERG: We got to break up Google because they have a monopoly on search engines.

SENATOR RAND PAUL: I wonder how long it will take until maybe it’s already happening that AI will make Google less of a dominant search engine.

DAVID FRIEDBERG: This was actually in the court ruling yesterday, the judge that decided to not break up Google. There was a write up on the rise of AI showing a point and.

SENATOR RAND PAUL: That I’m in favor of on multiple levels. But I think it’s also cool. Nobody would have predicted, “Oh, Google’s going to have everything in the whole world,” let markets work. All of a sudden something comes in.

DAVID FRIEDBERG: New AI, like any other technology prior provides leverage on human time and therefore leverage on human capital. And when you get a higher ROI on capital, you generally have more capital flow in, not less. So people will invest more in people, they will pay more to people, they will hire more people as AI tools are utilized. They’re just going to increase productivity for every person.

SENATOR RAND PAUL: That’s a great way of putting it. And I hadn’t thought of that because that fits with my sort of Adam Smith model that the extent of our prosperity is the extent of the division of labor. And so if AI gives me more free time, then I’m going to be smarter and I’m going to think up other ideas and maybe we will get to Mars.

The Status of DOGE

DAVID FRIEDBERG: I just want to ask your point on DOGE. There was a lot of proclamations at the start of this administration about the importance of DOGE, Elon Musk’s role in the administration. The President and others in the administration declared DOGE such an important part of the efforts. And all the cabinet members were incorporating DOGE team members into their work today. Is DOGE dead?

Government Efficiency and DOGE

SENATOR RAND PAUL: No. I still meet with people in government who I think are part of DOGE who are probably colleagues and friends of Elon Musk and brought into the situation. I think they’ve been a great addition because one, they’re people who know about profit and loss and they’re people who have been successful in business. And the fact that they’ve been selected by the marketplace as being successful people means they’re good people to have in government.

Is it everything I’d wished? No. But that’s not the DOGE people’s fault. That’s people resisting DOGE and resisting the cuts. I like the fact that the President pushed on with another round of the foreign aid cuts and he’s doing this pocket rescission.

And you know, I am a stickler for the rules and for the Constitution. The Constitution is very explicit on how you spend it, but it’s pretty silent on not spending it. And I think the best way for people have their doubts about whether they should do it is imagine we need an aircraft carrier and we hire somebody who looks at every nut and bolt, like Elon Musk and his rockets.

All right, we hire Elon Musk and we give him a billion dollars. He says, “This is crazy. I can do this for 800 million like this.” And he probably can. And that’s probably true of every aircraft carrier we have. So he does it for 800 million. Should we be forced to spend the 200 million that this person found in savings? Should we go to Las Vegas and have a big convention for all the GSA people with champagne and everything? No, it’s ridiculous. The money should go back to the Treasury.

Now the appropriators on both sides say, “No, it’s been appropriated, it should be spent,” but sort of ignores the fact that we’re 2 trillion dollars over budget. If you had a balanced budget, you could argue, well, we want it to be spent. If you have 2 trillion dollars in the hole, if you don’t spend it, we should be applauding the savings and the money should go back to the Treasury.

So I’m with them on the rescission stuff. I want more of the DOGE cuts. I’m all for it, but the pushback, and it’s bipartisan, the pushback, it’s the spenders, it’s the big spenders in both parties that have pushed back on DOGE. But I still wish them success and still support them.

DAVID FRIEDBERG: I was struck by how many Senate confirmation hearings I watched where senators blatantly spoke on camera about the need to keep dollars flowing to their state. And that was the motivation. It just drove me nuts. Anyway, we’ll move on. I want to talk about your new book, “Deception: The Great COVID Cover-Up.” What was at the heart of the COVID cover-up from your point of view?

The COVID Cover-Up

SENATOR RAND PAUL: Some people get nervous when you talk about COVID cover-up or conspiracy. They’re like, “Oh, you’re one of those crazy people.” And I think the best way to think of a conspiracy is the way George Carlin put it. George Carlin said that it’s not necessary to have a cabal of people that are all evil, that get together in a room to have a conspiracy. All that’s necessary is to have a convergence of interest.

The convergence of interest in COVID was, “Holy crap, we funded this.” And so if you are Anthony Fauci and you know that you’ve made a deal to do very dangerous research in China. One because there’s less oversight in China and there’s complaints beginning to circulate in America. Outsource this to China. What’s your first thought? We got to cover this up. And that’s exactly what he was doing.

The phone calls went on in our, in my book, my wife helped me write it. We go on in vivid detail of the minute by minute of him going till three in the morning that first night. Emails going back and forth and back and forth. Jeremy Farrar is his counterpart at Wellcome Trust in England. He is saying, “I didn’t know what a burner phone was. I had to buy a burner phone. My wife said I should talk to my brother, bring him in in case something happens to me.” And then he goes on to say, “It was no big deal. It turns out it just came from animals.”

It’s like, well, you think the animals are going to kill you? Why are you getting a burner phone? Why are you giving your last rights to your brother? These people were very concerned, maybe not that they were going to be killed by foreign agents, but that the public was going to find out that they had been funding this very dangerous research and that millions of people die because of lack of oversight.

But I go through the emails, there’s never been a more extraordinary cover-up in the sense that these people were saying in public the opposite of what they were saying in private. So Freedom of Information became the tool that uncovered a lot of this and thousands of people helped to get this done.

But in private, Anthony Fauci is saying, “I’m 50-50 whether this came from the lab or animals,” in publicly saying you’re a conspiracy theorist and should be treated as crazy and that we should expunge you or we should expose you, we should bring you down. Him and Francis Collins are talking back and forth about bringing down Jay Bhattacharya and all of the others that were exposing this stuff. This is extraordinary. We have the proof.

DAVID FRIEDBERG: You’re saying they knew that their funded research, which was done in China because there was less oversight, is what ultimately led to the development of SARS-CoV-2 and it escaped from the lab.

The Business of Science

SENATOR RAND PAUL: They knew there was a high. Everything’s a proportionate, everything is a percentage. They knew there was a high chance it was and they chose to cover it up. Because in the book I say it’s about the business of science. This isn’t about science, it’s about the business of science.

And people have to realize there are some good people in this world. There are good scientists who want to cure cancer, but there are many people getting millions of dollars. There’s nothing against money. I’m all for money. And good people should be paid for important discoveries, but they shouldn’t be paid not to tell us the truth. And it should be exposed.

I think all the scientists should have to reveal their royalties. Not one scientist in government reveals their royalties. Some of them are now getting millions of dollars in this stuff. Pfizer paid 800 million dollars and Moderna paid 400 million dollars. And they’ve taken that money, and now they put it in a foundation that I have no oversight in government over. Government has no oversight of. There’s an NIH foundation that has 1.2 trillion dollars in it given from Big Pharma for their share of the COVID vaccine.

So, no, it’s an extraordinary thing where in private, they were very open to the fact, leaning towards and in favor of the fact that the virus came from a lab. In public, they were disdainful. They got Facebook to take all our crap down. They got Facebook to take down the discussion of it as a conspiracy. That’s an evil thing to do, and it’s dishonest.

It’s not just you’re a bad person. If you were in the government and you were leading people astray as to the cause of something because you funded, you deserve to be punished, really, in a criminal way.

Gain of Function Research

DAVID FRIEDBERG: I saw your heated exchange with Fauci. There was a video, it’s about nine minutes long, went viral. You questioning Fauci about gain of function research. And I just want to talk about the origin of gain of function research because it’s a term of art that’s got different definitions. Right. Depending on who you asked. Fauci obviously disagreed with the definition.

What’s your view as a doctor, as someone who’s worked in science, and as a political leader about the role that government should play in researching ahead of the curve so that understanding what may come next, which I think is part of the argument for some of this research, that we need to understand how viruses can evolve so that we can prepare for the next pandemic. Because if we don’t, there will be a congressional hearing saying, why didn’t you prepare enough?

SENATOR RAND PAUL: So there’s different aspects to this. Should we know how viruses evolve?

DAVID FRIEDBERG: Absolutely.

SENATOR RAND PAUL: Should we test viruses and infections from different natural sources? Yes. Gain of function is different than that. Gain of function is forcing evolution in a direction. So gain of function is. I take a rat and I put human lungs in it. Not literally human lungs, but I have a. They will express receptors that make cells think that they’re invading a human.

So I give it a virus and I run it through and nine rats survive and one’s sick as shit. What I do is I take the really sick one, I culture the virus out and I do it again. And every time I just keep culturing it until I get a virus that really attaches to human cells.

We believe, COVID, is that because most animal viruses, the avian flu, right now, if the avian flu is not manipulated in lab, it can infect a human, but doesn’t go human to human, it has trouble. That’s the way animal viruses are. When COVID started, it hit humans and went everywhere. It just, there was nothing stopping it, which made us think it was pre-adapted. There are many other reasons why we think this happens.

But as far as gain of function, what should be regulated and what shouldn’t? One, it’s very dangerous. Viruses are more dangerous than bacteria if they’re aerosolized. Something that can spread through the air can be incredibly dangerous. Lethality, should you increase the lethality of it? Some of these viruses start with 50% lethality.

And if you want to know what that’s like, read Barbara Tuchman’s about the 14th century calamity and the Black plague when a third of Europe died. I mean, we’re talking about setting back civilization hundreds of years. We’re talking about entering the Stone Age. Some people think we could lose 10% of our population and we wouldn’t get chlorine in the water, we’d no longer have potable water and we would have riots and just a disaster.

So aerosolization, increasing the lethality, increasing the transmissibility are all dangerous things. They did all of that. And yet he argued, “Oh well, you can’t have gain of function unless it was intentional.” And it’s like, well, if you’re running it through humanized mice or rats, you’re pushing it, you’re pushing its evolution to be infectious in humans.

And he basically lied. One day he came and they had actually changed the definition on his website the day before. So they knew I’d been arguing that it was gain of function. They actually literally changed the definition on the website to say, “Oh, it doesn’t match the definition.”

DAVID FRIEDBERG: You would still support research into where viruses are headed and protecting the population and doing this research, but not in this directed engineered way.

The Dangers of Virus Research

SENATOR RAND PAUL: So there’s a big difference. And even many, some of the people support Fauci, actually support me on this. Identifying viruses mostly a good idea, but still, you have to think about it. A lot of these viruses are 300 feet underground in these enormous bat caves in South China.

So should you go down 300 feet underground and just randomly get as many as you can and take them back to a lab in Wuhan? Well, there’s the danger that one you got is the one that’s going to kill all of mankind. But maybe it was never getting up and other viruses would dominate it and never was getting up to surface. You should check the humans who live around the cave. You should check viruses that get up into our world. I’m not sure you should bring viruses from very remote areas to big cities.

But then it’s worse than that. The big virus identification, which sounds benign. They were taking the coronaviruses, they were taking a backbone of it and they have a new one they found in a cave. They were taking the S protein off a new one and sticking it on a backbone. The backbone is infectious and they’re wanting to know, does it make it more or less infectious? Well, that’s really a recipe for discovering something that maybe is a disaster. It isn’t helping.

And most of the people who follow this that oppose gain of function say no gain of function research has developed any vaccines. But here’s further. I think a compromise and a moderation of this. I don’t want to ban it. I want to set up a presidential commission of scientists who are not currently employed by NIH. Don’t have grants that I can give them bigger grants if they agree with me. And I want them to evaluate this.

But not only do they need to evaluate the civilian side of this, they need to evaluate the classified side. Because here’s what happens in our government. And I only know this much because they won’t tell me either. They say, “Well, the Chinese are doing this. Well, then we need to do it.” You have to, “Oh, the Chinese are doing this. They’re working with Marburg virus.” I’m just making this part up of which virus they’re dealing with, this very dangerous virus. “Well, we should too.”

That is basically the logic and what it takes to get a research grant in the classified area that the Chinese are doing it. Well, we might have an accident doing something the Chinese are doing that the Chinese shouldn’t be doing and we should be trying to stop them from doing. But we could kill the world also through an accident. Even the safest labs in our country have dozens of accidents every year.

The Erosion of Trust in Science

DAVID FRIEDBERG: Fair enough. Do you feel like there’s been an erosion of public trust in science and scientific institutions in this country? And importantly, when people lose faith in science, which is meant to be the source for objective truth, a process by which we discover the truth through testing and experimentation, hypothesizing testing and experimentation and looking at the results objectively, does it not create space for people to come in with untruths and convince the public of untruths being truth?

SENATOR RAND PAUL: Absolutely. And so the biggest one they’re talking about now is vaccine hesitancy. And people say, “Oh, it’s all the right wing. It’s people crazy on the right wing that are creating this vaccine hesitancy.” And I say, well, if you tell people things that aren’t true, they become distrustful of all science.

So I’ll tell you one right now. I’ve had this back and forth with Bill Cassidy, the senator from Louisiana, and with other members of the establishment medical community. Does your two day old need a hepatitis B vaccine?

DAVID FRIEDBERG: I just went through this personally and we opted not to. And we have to deal with it in the schools and we’ve been having this debate about—

SENATOR RAND PAUL: We did the same thing, we did it later on in school. But here’s the thing. Does your two day old need it? There’s one indication for your two day old to get it. Mom has hepatitis B and you have to within 12 hours give them the vaccine. And you have to give them immunoglobulin, which is like a monoclonal antibody against hepatitis, but they test it already.

So if the mom does not have hepatitis B, is there any indication of hepatitis B? No. In fact, you know what the honest people will tell you? They’ll say, “Oh no, but we have you there and we can get much better compliance by forcing it and pushing it in the hospital.”

The other problem is this. There’s so many problems on so many levels. The hepatitis B vaccine wears off. When does it wear off? About 10 to 12 years. When might you want to inoculate your kid for hepatitis B? If you are worried about your teenager getting involved in sex, drugs and rock and roll and IV drugs, that’s when it’s going to happen. You might consider the hepatitis B vaccine. Plus he’s 12 years old at that point and much bigger, stronger and able to take whatever you give him.

But they are creating vaccine hesitancy on this because they’re lying to us. They’re absolutely lying to us. COVID vaccine. The same people think I’m anti vaccine. My age, I’m 62. I probably would have taken it. I’m still a little iffy on some of the details, but the reason I didn’t take it is I got infected in March of 2020. I had it and I didn’t take the vaccine.

But would I give it to my 5 year old right now? Hell no, I wouldn’t have. Would I have given it to him in March of 2020? No. Because all of the initial evidence out of China was children. They weren’t even sure if they were getting sick. When they started doing the testing, they found out they were all getting it and they weren’t getting sick.

DAVID FRIEDBERG: It’s like a lot of social discourse and politics. It’s become so binary. There’s no nuance and there’s no gray area for conversation about. Some of these make sense, some of them do not. Why can’t we agree that we can each have a different point of view on that?

SENATOR RAND PAUL: Most of Europe doesn’t do the COVID vaccine or push it on kids. So I think I blame them and actually do want people to believe in science. I come from a scientific background. I’ve had papers published in scientific journals. You know, I come from that background. But you have to be honest with people. And I also believe people are smarter. You don’t have to have a PhD to know people are lying to you about the Hep B vaccine.

China, Competition, and the Future of American Primacy

DAVID FRIEDBERG: Just today, Putin, Xi and Kim Jong Un stood together in Beijing. Very dramatic show of strength and unity as a group. What does it mean for America to be in competition with China? Is this going to evolve into a conflict from your point of view, or is there a way to carry the world forward where we all have prosperity, where we all progress, where all societies succeed, where they cooperate, and we have a multipolar world that doesn’t dictate a winner and a loser? Do we really need American primacy?

SENATOR RAND PAUL: The shorter answer is yes. The longer answer is more complicated. Graham Allison wrote a book, the Thucydides Trap.

DAVID FRIEDBERG: We interviewed him at our show last year.

SENATOR RAND PAUL: He’s amazing. Yeah, really, really bright guy and a guy I’m fond of. He talks about up and coming powers and is war inevitable and interesting. And I don’t know if this commander, but I met with one of the Pacific Fleet managers. I don’t want to name him because I don’t want his conversation, but he said, “When you go back to Washington, make sure they know that war with China is not inevitable.”

And I thought it’s a profound statement from the guy who’s going to be in charge of the war and out there fighting on the front lines. And I think it is very possible. And I think it gets back to fallacies. Can you trade with China where you both get rich and it’s not. They’re ripping us off? I think yes. And I think that is the truth of the matter.

Since 1975 on, we’ve had a trade deficit every year and we got richer and so do they. Are there problems and dislocations in industry? Yeah, but I would actually argue what killed the steel industry or hurt the steel industry the most in this country was actually protectionism. They’ve been protected a lot.

Well, one, antitrust killed them first when they broke up U.S. steel and that became less competitive with foreigners because they were smaller. But then the second thing that went after them is we did try to protect them. This isn’t the first time we tried to protect steel. We’ve been trying to protect steel as we protected steel. What did it do? Did it produce better and more profound market decisions or worse decisions?

So if you’re selling me chairs and I tell you, you sell them for $50, I can say, “Well, we’ll put a tariff on. You can sell them for $100.” Are you going to be more efficient or less? You know, you won’t make as wise a decision because you’re being protective in the competition. And so all of that happened with steel industry.

But I think we can. We have to get through the fallacy part. But we also have to understand that I think we’re pushing in the wrong direction. There’s a possibility people think we’re going to defeat them and we’re going to come out on top because we’re so great. And protectionism is going to show how great we are.

But them all meeting together, to me shows one other possibility. And I don’t know what will happen. Nobody does. But there’s one possibility, that it finally unites them enough that they do everything in their power not to use the dollar and maybe they can displace the dollar they already try in their transactions.

The Need for Diplomatic Carrots, Not Just Sticks

And so I think we use the stick in foreign policy and you have to have it, but we should have a carrot offered as well. I just met with some Syrian Americans today, physicians mostly and intellectuals and engineers and things, and they want to get rid of the sanctions on Syria. And I say finally, now, they did like that. I think this group liked the sanctions before, but they want to get rid of them. Finally, somebody wants to get rid of sanctions because there has to be a reward.

And so even with countries we find distasteful and often are distasteful, Iran, there has to be an offer somehow to get rid of the sanctions. I would send my diplomats to China. I’ll give you a great example. Blinken and Yellen went to China and they were screaming, pitching a fit and telling the Chinese how bad they were. One that’s not very good diplomacy. But they wanted them to stop selling dual use parts to Ukraine. I mean, to Russia in the Ukraine war.

And so I said, well, it’s a reasonable goal. But had I been in charge, I would send my diplomats to China and I would say, look, the Chinese don’t like to lose face. They don’t like you insulting them in their own country. Quietly say, “You know, this sanction I think is costing you about $50 billion worth of wealth. We’ll remove it. But you got to quit selling them the dual use.” They would never admit that we push them into doing it. It’s a trade and it’s transactional. And diplomacy sometimes needs to be that.

We have a lot of people, both in Congress and involved administrations who are much more black and white, that there are good and bad people in the world and the bad people need to die and we need to defeat them utterly. And I wish they would die and go away, but, you know, I can’t. That kind of attitude. We’re going to be waiting a long time if we think sanctions is going to get rid of the Communist Party in China.

Capitalism might someday. And everybody complained. Well, Deng Xiaoping opened it up and they still have repression and capitalism. It’s true. But I think you might argue, and this isn’t a great argument for current China, but that China may be a better place than it was under Mao. I mean, people who’ve been there tell me that it definitely is 10x improvement.

DAVID FRIEDBERG: In GDP per capita. You visit a modern Chinese city, it’s like living in the future.

SENATOR RAND PAUL: Right.

DAVID FRIEDBERG: People are very happy, it seems, despite the—

SENATOR RAND PAUL: But not an argument for socialism, but an argument that most of that’s actually due to the amount of capitalism they’ve allowed to come in.

Political Future and the Need for a Libertarian Voice

DAVID FRIEDBERG: There’s an interview with the guys from the. I think it was the Hoover Institution and it was actually the entrepreneurism in the country. Political future for you, Senator. Are you thinking maybe you could run for president again in the future?

SENATOR RAND PAUL: You know, I think it depends on what happens in the next year or two. I think there needs to be a voice within our party that is more libertarian, free market. I think we have populism and protectionism covered, and I think there will be many heirs and many people competing to be heirs of Donald Trump in the protectionist front.

I don’t think it’s good for our country, and I think it will make us less wealthy and ultimately could really lead to a calamity if things are rosy in three or four years and the economy is percolating along. And it is a possibility. There’s a possibility that the tariffs, as bad as I think they are, are not a big enough percentage of the overall GDP to slow things down, that capitalism is still vibrant enough to overcome the tariffs.

There’s a distinct possibility if that’s true, we’ll get more tariffs and we’ll get another protectionist, populist president. I want to be that voice. Whether it’s in the Senate or running for the presidency, I don’t know. I think right now, all things given free markets and free trade isn’t very popular right now.

People are all making excuses for why we should own intel. Howard Lutnick thinks that’s part of that’s capitalism. And you know, that tariffs are lowering taxes and all gobbledygook. That makes no sense if that. If the economy still percolated on, people may still accept that nonsense as truth.

DAVID FRIEDBERG: I’ve been to D.C. a number of times in the last year or two. I always tell people I’m disappointed when I meet with members of Congress when I come back from D.C. because I hear the same thing over and over. I don’t see a progressive voice that actually speaks to where this nation needs to go. I often consider myself a libertarian. So I want to thank you for your service, for your leadership, for your voice. Thank you for being here today.

SENATOR RAND PAUL: Thank you.

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