Published: Dec 10, 2011 4:54 PM EST

ALLEN G. BREED/AP National Writer

GREENVILLE, N.C. (AP) - Long before he discovered Friedrich Hayek and other free-market economists, Ron Paul got a lesson in sound money from his oldest brother, Bill.

It was the height of World War II, and the Paul boys were laying aside quarters from their Pittsburgh Press routes and pooling pennies earned from pulling dirty milk bottles off the line at the family dairy to buy war bonds. One day, Ronnie suggested what was, in retrospect, a rather Keynesian solution: "Why doesn't the government just PRINT this money?"

"Well," Bill responded, "then the money wouldn't have any value."

Bill was 10. Ron was about 7.

Washington bureaucrats, Paul says now, "would like it to be complicated, and that we have to accept this complex monetary system of the Federal Reserve. But it's no more complicated than two little kids talking ..."

It's not complicated, he insists. These are the themes he has been addressing, consistently, since he entered politics in 1974, over the course of 12 terms in Congress, through his third bid for the White House: Free markets are good. The Federal Reserve is evil. The gold standard should be restored. Government is the cause, not the cure, of the nation's troubles.

"If it tries to make us virtuous and it tries to make us better people and fairer people and make us more generous and make sure that nobody's richer than the other person, redistribute your wealth, the ONLY way they can do that is the undermining of our personal liberties," Paul told a raucous crowd of several hundred supporters during a recent "Restore Liberty Rally" at the Greenville Convention Center.

"And that isn't the purpose of government. The purpose of government is exactly the opposite. The purpose of government is to protect our liberties."

At 76, this former obstetrician has seven years on the oldest man ever to take office as president, Ronald Reagan. But where Reagan was the genial conservative, Paul is an evangelical libertarian - a prophet who preaches that the United States is flat broke, foundering under the too-great weight of a bloated bureaucracy and its imperial - albeit generally well-intentioned - foreign interventionism.

This is a man who would eliminate five of the 15 cabinet-level departments (Commerce, Education, Energy, Housing and Urban Development, and Interior - he has no problem reciting them all); recall American troops from all foreign lands, not just war zones; repeal the 16th Amendment, which created the federal income tax; reduce his own presidential salary from $400,000 to $39,336 - the median salary of an American worker.

These are not the planks of a mainstream candidate's platform. But Paul rolls along, attracting a hard-core following and collecting millions in contributions.

How does he do it?

Perhaps it is not so complicated: He applies the lessons learned in a life that stretches back to the Depression.


Paul's grandfather, Casper, fled the economic wreckage of post-World War I Germany and went to work in the Pittsburgh steel mills at age 14. Ron Paul grew up on stories about rampant inflation and the dangers of paper currency.

"I remember my grandmother wanting to hang onto some property my dad thought she should sell," he says. "And she said, 'No. The money might go bad.'"

Casper eventually saved up enough to buy some land outside the city. He started a small vegetable and chicken farm, then opened a dairy, which his sons eventually took over and relocated to nearby Carnegie. Ron Paul's first job was making sure no dirty bottles made it to the filling crates. He was paid a penny per bottle; when they were old enough, the Paul boys - all five of whom shared one bedroom - took over the summer milk routes to give the drivers some time off.

His brother Jerry says Ronnie was no goodie two-shoes. In fact, he was kicked out of school - twice. The first time was for allegedly bribing a grade school chum "two bits" to throw a baseball through a window. The second was for bringing firecrackers to Dormont High - and that time he ratted on himself.

"He couldn't stand the principals who were dictatorial," Jerry says. "He would call them fascists."

Still, he was elected president of the student council at Dormont and won the school's service award three years running. But he really excelled at track. His junior year, Paul placed first in the state in the 220-yard dash, second in the 440 and third in the 100. Pennsylvania State University offered him a full athletic scholarship.

When he tore the cartilage in his right knee playing touch football that summer, Penn State was still willing to take a chance on him. But Paul decided he couldn't accept in good conscience. "I was not confident I could meet the standards of honoring that scholarship," he says.

Instead, he chose Gettysburg College, a small Lutheran school near the famous battlefield. Paul paid his own way, using money earned from his job running the local student coffee shop, The Bullet Hole, and washing dishes at the Lambda Chi Alpha fraternity house. In his senior year, he married Carolyn Wells, who had first noticed him when a friend pointed out the lanky upperclassman running around the track at Dormont.

Paul went on to attend Duke University School of Medicine in Durham, N.C. During his second year of residency in Detroit, Paul got a letter from the Selective Service. He could be drafted into the Army as a "buck private," or join as a physician and receive an officer's commission.

"I volunteered immediately," he says, chuckling.

Paul served two years in the Air Force as a flight surgeon and three more in the Air National Guard. While he did not see any action, he says he's seen enough of war's aftermath to convince him "the way we go to war so often is the reason that we have difficulty getting out of war.

"My firm belief is that the founders were absolutely correct in going to war very, very cautiously, very, very rarely," he told the Greenville crowd. "And NOT by one individual deciding."

During his residency, Paul found time for some light reading: "The Road to Serfdom" by the free-market economist Friedrich Hayek. It was an epiphany. In short order, he devoured the works of Ayn Rand and Ludwig von Mises, the dean of Austrian school of laissez-faire economics.

Paul had been stationed at Kelly Air Force Base in San Antonio. When his service was up in 1968, he stayed on in Texas, eventually taking over the practice of the only obstetrician-gynecologist in tiny Lake Jackson, south of Houston. It was a busy office; often, Paul would deliver four babies in a single night, and in the course of his career, he estimates he brought more than 4,000 babies into the world.

There was minor shock in the office when Paul informed the staff they would no longer participate in the federal Medicaid or Medicare programs.

"People will pay as they can," scrub nurse Donna White, who later married her boss's youngest brother, recalls the doctor saying. "And if they can't, that's fine."

One family, she says, paid him in fresh-caught shrimp.


Paul can remember the date when he decided to enter politics. It was Aug. 15, 1971, the day President Richard Nixon decoupled the U.S. dollar from the nation's gold reserves.

"After that day, all money would be political money rather than money of real value," he told a writer from Texas Monthly. "I was astounded."

Paul lost his first congressional race in 1974 but won a special election two years later to fill the incumbent's unexpired term. Several months later, he lost the general election to Democrat Robert Gammage by fewer than 300 votes.

Paul defeated Gammage in 1978 and won back-to-back re-elections. His pledge to "never vote for legislation unless the proposed measure is expressly authorized by the Constitution" earned him a nickname: Dr. No.

He refused to vote for any tax increase or any budget that was not balanced, and eschewed most "pork barrel" projects for his district. He even voted against awarding Congressional Gold Medals to Mother Teresa, Nancy and Ronald Reagan, and civil rights icon Rosa Parks - though he suggested his colleagues "each put in 100 bucks" to pay for the $30,000 cost of a medal for Parks.

He has refused to enroll in the House pension program, saying it would be "hypocritical and immoral" to accept a benefit unavailable to the taxpayers who fund it. He also discouraged his five children - including the future Kentucky U.S. senator and tea party darling Rand Paul - from applying for government-backed student loans.

In 1981, Dr. No teamed up with "Senator No" (North Carolina's Jesse Helms) to pass legislation that formed the 17-member Gold Commission, which was to study "the role of gold in the monetary system." Appointed by Reagan, Paul argued for a gold coin - "without a dollar denomination" - as legal tender.

"I wanted people to think of money as weight," he wrote.

In 1984, Paul ran for the U.S. Senate. When that bid failed, he returned full time to his medical practice.

Four years later, Paul won the Libertarian Party's presidential nomination. He placed third in the election, with less than 1 percent of the popular vote, but he now had a national base.

In 1997, Paul retired from medicine and returned to Congress; he's been there ever since. In 2008, he made his second run for president, this time as a Republican. He raised almost $35 million, including more than $6 million on Dec. 16, 2007, the anniversary of the Boston Tea Party.

Still, in the end, it was projected that he had amassed just 42 delegates.

The 2008 race also brought Paul's closest brush with scandal. A controversy arose over statements in his monthly newsletters -