Patrick Semansky / AP Republican presidential hopeful, Rep. Ron Paul, speaks at the Republican Leadership Conference in New Orleans, Friday, June 17, 2011.

In his 12 terms in Congress, Ron Paul has waged many lonely crusades. Before he was a Tea Party standard bearer and a master of the online money bomb, the man known as “Dr. No” was a libertarian icon who regularly bucked his party’s budgets and preached isolationism* against military intervention when his peers were girding for war. But while he’s nurtured a devoted band of supporters, the Texas Republican has been a non-factor in his two prior bids for the White House. Paul is hoping his third bid for the presidency will be different. With the rise of the Tea Party, the center of gravity of the Republican base has shifted toward Paul, particularly on foreign policy. And while the political punditry has again written him off, his supporters believe Paul has the fund-raising might and grassroots army to make a credible challenge for the nomination in 2012.

On June 17, Paul spoke to TIME by phone from New Orleans, where he won the straw poll at the Republican Leadership Conference. A trimmed and lightly edited transcript follows:

Why do you want to be President?

To straighten out the mess that this country is in. To give this country more peace, more prosperity, a sound currency and a lot more security.

Four years ago, you demonstrated your fund-raising prowess and your appeal to a segment of fervent fans. But you weren’t a top contender for the nomination. Why do you expect to do better this time?

Because the country is a completely different country than it was four years ago. People have come to realize that you can’t continue these wars, and both sides now are putting a lot of pressure on the President to back off, especially when it comes to Libya. Also, people are now looking at the Federal Reserve as being a major contributor, if not the entire cause, of financial bubbles and these troubles we have. These are the kind of things I’ve been talking about for 20 to 30 years.

Were you surprised by the degree to which some of your Republican competitors echoed similar views on Libya and Afghanistan during the recent debate in New Hampshire?

You have to give them credit: they are listening and responding. Government is always a reflection of the people’s attitudes. So this is a demonstration of how you get people to think differently, and politicians will respond. I was a little bit surprised, but very pleased, that they were taking an attitude much closer to mine.

You voted against the budget blueprint devised by Paul Ryan and backed by nearly all House Republicans. What would you do, if anything, to reform entitlements as president?

My goal would be to get the federal government out of the entitlement business. It will be a tragedy if we continue to do what we do, because we won’t be able to finance them. If you look at Medicare and Social Secruity and Medicaid, they don’t have the money. What I propose is a transitional period. Let young people get out. Take care of the people who have become so dependent on the government. Work our way out of it. Stop spending this money running a world empire and cut some of the budget that won’t hit the poor.

I believe very sincerely that you could do this. If you change the foreign policy, you could save hundreds of billions of dollars rather quickly. You could get rid of your departments. What are we doing running the Department of Agriculture to the tune of billions of dollars? The Department of Energy, the Department of Education – we just don’t need those things. You could address that and still not have to be seen as attacking health-care for children–even though my goal would be to make the Constitution strong enough and efficient enough that you could wean people off and let young people opt out of this soon and assume responsibility for themselves.

After this “transitional” phase is over, would there be entitlements?

It depends on what the people will tolerate and understand. If they really understood how the free market works and how our Constitution is supposed to be read, that’s conceivable. We will not be able to fulfill the demands of the entitlement system, so we need a lot more people willing to go out and work and assume responsibility for themselves.



In addition to saving money abroad, what policies would you prescribe to spur economic growth here at home?

I would work real hard on the tax code. I want the Federal Reserve to quit creating money out of thin air, because that distorts the economy. That’s central economic planning by manipulating interest rates. Money should come from savings. Where are our savings? They’re overseas. A lot of our companies made money overseas and don’t want to bring it home and get taxed 30% or 40%. They’ve already been taxed overseas. Corporate taxes should be as close to zero as possible.

Then you need to have regulatory relief. The more trouble we get into, the more regulations they add on. They say the lack of regulations was why we had our crisis. Well, the regulations should be placed on the Federal Reserve, not on the businessman. You have to allow the liquidation of debt and the mal-investment. We should have allowed bankruptcies to occur rather than save weak companies.



People often call you the ‘intellectual godfather’ of the Tea Party movement. What’s your appraisal of the current state of the Tea Party?

I think it’s a mixed bag. It’s normal when new groups of people come together that the views won’t be uniform. When that all started during the last campaign, it was pretty uniform because it was based around our platform. It’s a mixed group now. The issue that brings them together – although the details are still a little murky – is they’re tired of the status quo, they’re tired of the debt, they’re tired of the failure of government.



What grade would you give the new House Republican majority for its performance so far this session?

Pretty good. The circumstances are so overwhelming. Some days I’m very happy; some days I get a little disappointed with the votes of the new members. But the sentiment against all this war going on, and bringing troops home, and not going into Libya, that’s where I give them a very strong plus.

And if you were going to give them an A to F grade?

I’d give them a pretty good grade on effort, but I’d give them a C- on their realization of what they’re really facing and not quite comprehending the whole issue. Take Paul Ryan. I didn’t vote for his [budget], but I’m the last one to jump on him. Those who didn’t want any changes, who didn’t want to cut a thing, jumped on him and said he was an evil monster for even thinking about this. Of course, my complaint was he really didn’t do anything. This year is the only thing that counts. These plans that tinker with things 10 years out are not comprehensive enough. He made an effort and people wanted to destroy him. They blamed him for losing the congressional seat [in New York]. Congress is basically filled with demagogues and power-mongers.

You said recently that fellow Texan Rick Perry represented the “status quo.” Are there any competitors for the nomination who do not represent the status quo?

I think they all pretty much represent the status quo. How many others would bring the troops home? How many others want to audit the Fed – and get rid of the Fed someday? How many others want to repeal the Patriot Act? How many are saying the war on drugs is a total failure, a waste of money? So yes, they are the status quo, some more so than others.

Have you seen any of them introduce good new ideas?

No, but that doesn’t mean they haven’t had any. Maybe I just haven’t paid enough attention. I’d be open to what they say, but none have caught my attention.

Your son, the senator from Kentucky, made some comments that suggested he was mulling jumping into the race. Did you two have conversations about your respective plans?

We did not. I think he basically knew what my plans were, even though I never talked to him about it. We don’t have many conversations about votes and things. About 99% of the time we probably agree. He did stay at my condo for awhile, but he got a place closer to the Senate. So I don’t see him all that much. I see the other children a lot more because they live in Texas. Even though he’s in Washington I probably see him the least.

Would you vote to raise the debt limit if the deal to do so contained spending reductions equal to or exceeding the $2.4 trillion it would take to raise the borrowing limit through 2012?

The promises to cut spending, which is supposed to be the temptation to vote for the debt increase, I think is a trick. Are they going to do it this year? Next year? Or is it going to be a 10-year program? There is no value to promises to make cuts in the future. In the 1980s they had a tax increase and it was agreed that for every dollar of increased taxes, there would be two dollars of spending cuts. What happened to the deficit in the 1980s? It still exploded.

You’re known for voting your ideology. Are you willing to compromise this time around to enhance your chances of winning the nomination?

That would be like crossing your fingers as you take an oath of office. Instead of compromising, I work with coalitions. Some of my best groups have been working with progressive Democrats. They understand civil liberties and they understand war, and many of them, believe it or not, think deficits are bad. They like transparency of the Fed. I think working with coalitions without sacrificing any principle is the way to go. If you say now is the time to compromise, you’re also saying your oath of office is worth about 50%.

What would a Ron Paul presidency look like?

There would be changes on Day 1. I’d do everything conceivable to trade with [foreign countries] rather than intimidating them. I’d try to relieve some of the tension. I certainly wouldn’t have warships in the Black Sea trying to stir up a new Cold War with the Russians. That’s crazy. The rest of it, you have to get a consensus, get Congress to pass laws. You could back off on regulations. The federal register is big enough. That would be a signal to the business people: Wow, he doesn’t like taxes. You could do a lot to change the atmosphere, the intimidation that Big Government places on our business community.

Updated, 11:50 PM on June 20: As Paul’s supporters correctly (and quite angrily) note, “non-interventionism” is a more accurate description for Paul’s foreign policy that “isolationism.”