[transcript] Ron Paul discusses foreign policy with FOX News anchor Shepard Smith

(Transcript begins about 1 minute from the end of the clip)

SHEPPARD SMITH (FOX News Anchor): Congressman, were you President today, and you were seeing the problems that we have in Pakistan today, would you be concerned about the nuclear weapons falling into the hands of terrorists, and what would your message be for President Musharraf?

REP. RON PAUL: Well, yes I'd be concerned, but it's a consequence of our foolish policy over there. Here we have supported a military —

SMITH: But what would your message to the President Musharraf be?

PAUL: I would say, "No more money, pal. We'll deal with you. We've given you $10 billion, you're flunking the course. And you're on your own." But we would deal with it, we would talk to him, we'd try to trade with him. But we would no longer interfere in their country. We're bringing in —

SMITH: Would that make things more difficult in the fight against terror?

PAUL: No, —-

SMITH: I mean, it's not to say the terrorists aren't on the border there.

PAUL: No. I think the fact that we supported a military dictator and pretend we support democracy is what motivates the terrorists. That's why he was overthrown by his people. It's because he was a puppet of ours. So it's our foreign policy that we're seeing a reaction to. So I would say, change the policy, and we would have a better relationship with every country in the world.