Full Text of Ron Pauls speech to the House of Representatives today:

“Madam Speaker, I rise in strong opposition to this bill, because it won’t solve our problem. It is said that we’re in a liquidity crisis and a credit crunch, and all we need is more credit. The Federal Reserve has already injected over a trillion dollars worth of credit, and it hasn’t seemed to help a whole lot. Injecting another 600 or 700 billion dollars will not solve the problem.

I think one of the reasons why we’re floundering around here is that we don’t understand the problem, because instead of it being a credit crunch I think a lot more serious than that and that is, I think what’s happening in the market today is signaling something much more draconian.

Because it’s probably telling us that our government is insolvent, that we’re on the verge of bankruptcy, and big things are starting to happen, and we don’t quite understand it, so we fall back on the old cliches: What we need is more appropriations, more spending, more debt, and more credit in the market, that means more inflation by the Federal Reserve system. And yet that is what caused the trouble.

We want to do this, it is said, to prevent the recession or depression, because that is “unbearable”. But the truth is, you should have thought of that about 10 or 15 years ago, because the financial bubble created by the excess of credit and the lowering of the interest rates is the cause of the recession.

The recession is a demand. It’s a must. You can’t avoid it. Yes, it’s been papered over several times over these last several decades, but that just made the bubble bigger. But the message now is you can’t paper it over any longer, so the recession and/or the depression will come.

My sincere conviction is that by doing more mischief and not allowing markets to adjust, debt to be liquidated, you’re going to guarantee a depression. It’s going to be prolonged, the agony is going to be there a lot longer than if you allow markets to adjust. Liquidation of debt, let the bankruptcy occur, let the good assets come up, and let it react.

This idea that there’s just not enough regulation is completely wrong. There’s too much regulation and lack of regulation of the Federal Reserve system and the Exchange and Stabilization Fund.”