Ron Paul on the Evil Fed, the IRS, and Saving the Buck

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I have a bill right now that is very popular, especially for people who are trying to work their way through college or who are having a tough time making ends meet, and that is to exempt all taxes on tips. People who have a first job or a second job waiting on tables and doing other things, they're harassed by government rules and regulations, and sometimes they have to pay higher taxes than the tips they actually receive. I'd move next to saying no taxes on anybody who's trying to get through college. Why do we tax them, make it hard for them, then give them grants? It doesn't make any sense.

Who are your economic advisers?

I don't have any. I read Austrian economics, which I've been doing for 30 years. So my advisers have been [von] Mises and Hayek and Sennholz.

Do you consider yourself a friend or a foe of Wall Street?

If they believe in freedom, free markets, and sound money, they'll love me. But if they like creating credit out of thin air, they'll see me as a threat. I was one of three people who voted against Sarbanes-Oxley because I thought it was detrimental to Wall Street. I'd repeal it.

You want to take the troops out of Iraq, but what about Iran? What do we do if other nations turn hostile?

I'd treat them something like what we did with the Soviets. I was called to military duty [as a U.S. Air Force flight surgeon] in the '60s when they were in Cuba, and they had 40,000 nuclear weapons and intercontinental ballistic missiles, and we didn't have to fight them. We didn't have to invade their country. But to deal with terrorism, we can't solve the problem if we don't understand why they [attack us]. And they don't come because we're free and prosperous. They don't go after Switzerland and Sweden and Canada. They come after us because we've occupied their land, and instead of reversing our foreign policy after 9/11, we made it worse by invading two more countries and then threatening a third. Why wouldn't they be angry at us? It would be absolutely bizarre if they weren't. We've been meddling over there for more than 50 years. We overthrew a democratically elected government in Iran in 1953; we were Saddam Hussein's ally and encouraged him to invade Iran. If I was an Iranian, I'd be annoyed myself, you know. So we need to change our policy, and I think we would reduce the danger.

You have vehement new supporters. What's driving the sudden interest in your candidacy?

I think they're sick and tired of what they're getting. They've lost all trust and faith in the government. They believe in the American Dream, and they're getting a nightmare. And they're rallying behind the program I've been working on for 30 years—defending the Constitution, limited government, free markets, sound money, and self-reliance; believing people can take care of themselves better than government can. The nanny state doesn't work, the police state doesn't work, and neither does the warfare. And they know it.

Maria Bartiromo is the anchor of CNBC's Closing Bell.