Ron Paul has slammed Barack Obama’s claim that reckless government spending and taxation is the only way to alleviate the economic crisis by pointing out that the end of the great depression only came after taxes and spending were drastically cut.

Obama told a Georgetown University audience yesterday that critics were wrong to accuse the administration of spending with “reckless abandon,” claiming that the worst thing a government could do during a severe recession was to cut spending.

“History has shown repeatedly that when nations do not take early and aggressive action to get credit flowing again, they have crises that last years and years instead of months and months – years of low growth, years of low job creation, years of low investment, all of which cost these nations far more than a course of bold, upfront action,” claimed Obama.

“We haven’t even come close to having a policy that might get us out of the woods because we’re doing exactly what got us into the problem – we’re spending more, regulating more, having new programs, printing more money, and they’re trying to reinflate the bubble and it’s the bubble that was the problem in the first place,” the Congressman told MSNBC.

Paul suggested that rather than runaway spending, the government should allow the market to work, which it hasn’t allowed for decades, and highlighted the fact that the government was repeating the mistakes of the great depression in blaming the free market for the crisis.

“He claims that the worse thing they did in the depression and all these other times was that we didn’t spend enough money and that’s what prolonged the depression,” said Paul, expressing frustration at the inaccuracy of the host’s claim that spending on the second world war was what helped end the depression.

“That’s not true because at the end of the 30’s when the war was starting it put people to work but they were still very poor and they had rationing, I remember those days, the economy was very weak here at home, the people were suffering and there were shortages – the depression ended after the war – after the war taxes were cut by one third, spending was cut by two thirds and he’s claiming never cut spending – the end of the depression came with cutting spending and cutting taxes,” said Paul.

The host then cited Obama’s higher approval ratings over the GOP as a reason to claim he’s doing the right thing to help the economy, which Paul also shot down in an instant.

“Of course that doesn’t prove a whole lot because they had a lot of confidence in Roosevelt and he prolonged the depression so I don’t think that’s very much of an argument at all – the only thing that changes things is not personalities, it has to be economic policies and the ideas of freedom and free choices and sound money….if we don’t talk about that we can’t solve the problems,” said Paul, adding that constantly inflating the economy through the printing of money and creating credit was the problem, not the solution.

Paul concluded by referencing Obama’s own speech, and the fact that people are having a correction by tightening their belts and saving their money, which is exactly what the government should be doing too.

“You can’t start a war to get out of a depression – that scares the living daylights out of me,” concluded Paul.

Watch the clip below.

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