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Comments about ‘Robert J. Samuelson: Here is why returning to the gold standard would be a disaster’

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Published: Thursday, Aug. 30 2012 12:00 a.m. MDT

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SEY
Sandy, UT

To put it charitably, this article is a disappointment. If I had the time that Mr. Samuelson has to write something like this, I'd love to offer a rebuttal. Given time and space constraints (I have fewer words allowed and I have to work), I'll just say that Mr. Samuelson was too lazy to research the topic beyond reading what anti-gold, Keynesian banksters handed him. Every objection he raises (and some he doesn't) has been refuted by economists and historians who have made the gold standard a field of research. Those refutations can be found on the Mises Institute website. Anyone really interested in honestly understanding the arguments should go there.

Mr. Samuelson also overlooks the fact that Ron Paul has no illusion that the gold standard could be implemented under current circumstances. Although he is an advocate, he's bright enough to understand that implementation right now is impossible. What he asks, however, is that government allow citizens to use currencies other than Federal Bank Notes in payment of debts if they so choose. The current system is a bankster monopoly that benefits themselves more than any other group (outside of the government itself).

Twin Lights
Louisville, KY

Mr. Samuelson is correct.

To my knowledge there is NO modern, industrialized economy that uses a gold standard. Going to a gold standard now would be subjecting our economy to what is (in the modern world) an untried and untested system.

The world's leading economy should not be the guinea pig for someone's economic musings. Also, if it is such a good idea, there would be other countries trying it. Not happening.

Gold was abandoned for good reasons. And those reasons are not related to the Rothschilds (conspiracy theories not withstanding).

David King
Layton, UT

SEY has written everything I was going to say, only much better. I just wanted to give a hearty amen to his/her comments.

cjb
Bountiful, UT

Here is why the gold standard would be difficult for the U.S.

We import oil and pay for it in dollars. If we run short of dollars
we simply manufacture more. So far this has worked for us.

While we have an unlimited supply of dollars we don't have an
unlimited supply of gold.

Gildas
LOGAN, UT

It was unconvincing for the writer to argue that the gold standard made the Great Depression more severe while admitting that FDR effectively ended the gold standard domestically in 1933. Most of the Great Depression was then still to come. It had not ended in 1941 when America entered WW2, and didn't exactly end then either.

Then, when the writer talks of coinage being bulky to carry, I'm not sure that would be true for most of us. So far as gold is concerned, considering an ounce of gold is worth about $1,650 currently, gold coinage per $100 would require only one sixteenth ounce coin; perhaps it might have been better to argue that you might lose gold coins being so small. Smaller silver coins (silver about $30 an ounce)would do for most of your small change.

For larger transactions bank notes were used anyway, though there is always a problem that banking institutions might take advantage, in various nefarious ways, of the fact that a large proportion of their notes were never cashed in but continued to circulate. Exchanging some of that residual stock for personal gain they effectively inflated other people's money.

SEY
Sandy, UT

The argument over whether to implement the gold standard is really a side issue. The reason for the gold standard is twofold: 1) to minimize sudden shocks to the money supply, and 2) to restrain banks from issuing excessive credit. If it were possible to accomplish both goals without a gold standard, you'd find me in favor of it. It wouldn't be as good because I think it makes sense to make currency redeemable for something of value like gold, but that's another issue.

Panics, recessions and depressions are invariably caused by shocks to the money supply and/or banks extending excessive credit. Certainly the current economic malaise was caused by both of these situations. The Federal Reserve created a whole lot of money in a very short time during the run-up to the crash by making it possible for banks to extend excessive credit to anyone with a pulse. That is simply unsustainable. Deregulation (or, better said, non-enforcement of current laws) accelerated the whole process.

A gold standard creates conditions that are sustainable as long as government upholds the law. Failures during gold standard times occurred because the government suspended gold standard laws.

CLM
Draper, UT

SEY, I'm adding my kudos along with David King's. The high caliber of your comments reflect a clear understanding of the true cause of the economic shambles we find ourselves in. The points you are making about stabilizing the money supply and putting the reins on banks issuing excessive credit are rejected by current economic thought and are therefore difficult to find in MSM. By speaking out as you have, arguing for economic solutions we should be seeking to cure our economic woes, you have provided not only a common-sense alternative but an education. Thank you.

Twin Lights
Louisville, KY

SEY,

First, when we were under the gold standard, we had plenty of shocks.

Second, your basic argument seens to come down to if govt. would do what it is supposed to do then gold would have worked. But then, if govt. were to do that, ANY system would work well.

The legistlative branch makes and the executive branch enforces law. If they think there needs to be an expansion or a contraction, they can agree to either change laws or enforce them selectively. A gold standard would not change that (and you indicate that history shows that govt. did just that). So, they could still do what they want. It would just be messier.

My question then is, understanding that govt. will not abide the restrictions of the gold standard, why would it benefit us? Cui bono?

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