Rand Paul on Republicans' Voter Appeal and the Federal Reserve

Paul believes Republicans can win the support of minorities and the working class. He reveals how—plus his picks for Fed chairman

Photograph by Daniel Shea for Bloomberg Businessweek

How seriously are you thinking about the White House?
At this point we’re thinking about ways to grow the Republican Party and won’t make any decision about whether that involves me running or not for about a year. But I am very serious about making the party more inclusive, making it a party where every ethnic group is welcome. That includes trying to grow our party within the working class. I am going to attempt over the next year or so to expand that appeal to people who I call the not-yet-haves—not the have-nots, but the not-yet-haves—to show them that we are the party of opportunity.

And what’s going to be a part of that strategy?
The origins of the Tea Party and the Occupy Wall Street movement really had some commonality, and that commonality was that government shouldn’t bail out Big Business. It has been a part of the early message of the Tea Party, but the Republican Party hasn’t captured that message. The average guy who’s working class is not real excited about paying taxes and sending it out to bail out a guy who makes $100 million a year. And so I think the Republican message should be that we treat people the same whether you’re a small business person, a working-class guy, or a big bank on Wall Street.

What are your big achievements in Washington?
There’s an emergence of a new wing of the Republican Party that’s concerned not only with economic liberty but with personal liberty and with having a less aggressive foreign policy. So it’s providing people with an avenue to support a wing of the Republican Party that didn’t really, frankly, have much representation before 2010.

What is your plan to refashion the GOP to draw more minority and younger voters?
All voters, but particularly young people, and often young people who are African American or Hispanic, I think they have a sense of justice, and they sometimes mistrust government with achieving justice. So one of the big issues that I’ve fought here is getting rid of the provision called indefinite detention. This is the idea that an American citizen could be accused of a crime, held indefinitely without charge, and actually sent from America to Guantánamo Bay and kept forever.

I think there is something in that message of justice and a right to a trial by jury and a right to a lawyer that resonate beyond the traditional Republican Party and will help us to grow the Republican Party with the youth. Defending the Internet’s privacy, these are all things that broaden the appeal of Republicans.

A recent article in the New Republic said your budget would eviscerate the departments of Energy, State, Commerce, EPA, FDA, Education, and many others. Would Americans support that?
My budget is similar to the Penny Plan, which cuts 1 percent a year for five or six years and balances the budget. Many Americans who have suffered during a recession have had to cut their spending 1 percent, and they didn’t like doing it, but they were able to do it to get their family’s finances back in order. I see no reason why government can’t cut 1 percent of its spending.

Any political consultant who saw that list would tear out his hair and say the American people would never accept it. You disagree with that conventional wisdom?
You know, the thing is, people want to say it’s extreme. But what I would say is extreme is a trillion-dollar deficit every year. I mean, that’s an extremely bad situation. I would say it’s a very reasonable proposition to say that we would only spend what comes in.

You’re a big reader of Austrian economists such as Friedrich Hayek and Ludwig von Mises, who don’t believe in stimulus and say the economy can return to health only through austerity.
You can stimulate prosperity by leaving more money in the hands of those who earn it. If you want to stimulate the economy in Louisville, leave more money in Louisville and send less to Washington. My plan has a 17 percent flat tax with very few deductions, and it would leave $600 billion in the economy. But it would work better than a government stimulus because of the Milton Friedman proposition that nobody spends somebody else’s money as wisely as they spend their own. I think you’d have a boom like you’ve never seen in this country.

Who would your ideal Fed chairman be?
Hayek would be good, but he’s deceased.

Nondead Fed chairman.
Friedman would probably be pretty good, too, and he’s not an Austrian, but he would be better than what we have.

Dead, too.
Yeah. Let’s just go with dead, because then you probably really wouldn’t have much of a functioning Federal Reserve.

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