The Daily Economist
MAR 28, 2018
And while Mooney’s bill has exactly zero chance of passing, anything that gets this idea reintroduced to wider public discourse is a positive.
As the in-practice gold standard fades further into the rear view mirror (how many millennials, half of whom identify themselves as Socialists, have ever even heard of it?), it bears remembering it was the unflinching, functional backbone of US monetary policy for years.
Clouding the historical picture are two fake gold standards. The Depression-era gold standard was constructed to make prices fall toward the levels that prevailed before World War I, with the disastrous result of deflation. Then, under the Bretton Woods version after World War II, only foreign central banks could convert dollars into gold. This deformity caused inflation, which skyrocketed after the Fed gained total control of the money supply in the early 1970s.
The current Federal Reserve system benefits elites. The gold standard is equitable and puts “we the people” in control of the money supply. That’s why it was part of America’s founding and has been a key to the country’s long economic success.
On Thursday I introduced a bill that would return the dollar to the gold standard—the first such attempt since Jack Kemp’s Gold Standard Act of 1984. Under this legislation the Fed would still exist, but it would administer the money supply rather than dictate it. Instead the market would be in charge, the supply and demand for money would match up, and prices would be shaped by economics rather than the instincts of bureaucrats.
ORIGINAL SOURCE: West Virginia Congressman submits bill to return the U.S. back to a gold standard at The Daily Economist on 3/27/18