Non-partisan analysts say his economic proposals - drastic spending cuts, elimination of the Federal Reserve and a return to the gold standard - would plunge the country back into recession.
"Paul appeals to people whose knowledge of major issues is superficial (and) he sees conspiracies where there are none," said Greg Valliere, chief political strategist at Potomac Research Group, an analysis firm. "If he does well in Iowa, which is likely, it will be an enormous embarrassment to the Republicans."
However, Paul's calls for a dramatically limited government and a hands-off foreign policy are resonating among voters who have grown deeply alienated from Washington after a decade of war and nearly five years of economic malaise.
"Obama got into office and I can't tell the difference between him and Bush," said Deanna Pitman, a homemaker from Bloomfield, Iowa, citing President Barack Obama's support for policies such as the Wall Street bailout and the war in Afghanistan that began under George W. Bush.