Topic: Ron Paul
Ron Paul Does NOT Want to Go Back to the Gold Standard Contrary to what you may have heard, Ron Paul does not want return to the gold standard.by Freedom Jackson
(libertarian)
Friday, November 16, 2007
One of the most common items of misinformation about Ron Paul's positions is that he wants to go "back on the gold standard" or "return to the gold standard." And, this is often used as criticism against him by misinformed and careless reporters and bloggers. However, the criticism is a straw man. As widespread as the allegation is, it's not true. Paul has explicitly stated "I wouldn't exactly go back to the gold standard," pointing out that a "there were shortcomings with the gold standard of the nineteenth century because...it was a fixed price..." (http://youtube.com/watch?v=RKQmYfY3R7c) So, Paul, like his critics, also doesn't think going back to the gold standard would be a good idea. That is, he does not agree that government should fix the ratio of gold to paper - which is what going "back to" or "returning to" the gold standard would comprise.
What Paul actually wishes to do, as he has said many times, is simply to make gold and silver legal tender as called for in the Constitution, as well as to remove the taxes on these metals. He has called this "going forward to a new gold standard" to make it clear that this is not the same thing as going "back to the gold standard." The reason he wants gold and silver to be made legal tender is because he likes the idea of competing currencies and opposes monopoly money. He wants us in the marketplace to be able to decide what money we use, rather than government imposing its choice on us. And, he is confident that if allowed the choice, it is natural that the market will choose money backed by "hard assets" such as gold and silver. As it stands now, fiat currency issued by the Federal Reserve has the special privilege of being "legal tender." This, and the tax penalty on buying and selling gold, enforces a near monopoly on money in the U.S. to the effect that nearly all transactions are conducted with fiat Federal Reserve notes. If gold and silver were given legal tender status, and the taxes on them removed, currencies backed by these metals, as well as the metals themselves, would have a much greater chance at successfully competing with fiat Federal Reserve notes. The Federal Reserve might be an issuer of gold-backed paper (prior to the creation of the Fed, currency was commissioned to be printed by other banks), but that it is not even necessary. As Paul points out, these could be issued by the private sector. In fact, they already are being issued, but as pointed out above, it is difficult for them to get a foothold due to special legal privilege for fiat currency. Examples of privately-issued gold-backed money in limited use today include E-gold (http://www.e-gold.com) and the Liberty Dollar. Paul has said that he does not want to abolish the Federal Reserve overnight because it would cause massive economic disruption. Presumably, the Fed would be abolished only after the the masses converted to sound money. If that occurs, then the Fed would have already become irrelevant anyway, so doing away with it would be a non-event.
So, contrary to what you may have heard, Paul does not want to "go back on the gold standard." He simply supports abiding by the Constitution and making gold and silver legal tender so that sound money can compete on a level playing field. Paul's advocacy of gold-backed currency, "sound money," or "hard money" is not the same thing as supporting a "return to the gold standard." He does not want to return to the price fixing arrangement of the nineteenth and early twentieth centuries - as much as his detractors would like to claim. Moreover, Paul does not seek an immediate end to fiat currency, but a gradual conversion. For the near and intermediate term the Fed would continue printing money, and if anyone wanted to continue using fiat Federal Reserve notes they would have that choice. Others may choose gold-backed money. Who would have a problem with people having this choice? Spend-happy politicians, political entrepreneurs, and power-hungry bureaucrats, that's who. If the masses eventually chose sound money over fiat money, government would no longer be able to rely on the Federal Reserve to monetize the debt and "print money" in order to accommodate wasteful spending and grow the Federal government like a cancer. Ronald Reagan said, "As government expands, liberty contracts." Paul strongly believes that making gold and silver legal tender is crucial to limit the ability of government to grow and therefore to allow liberty to prevail.
Interviews referenced:
Interview with Ron Paul after New Hampshire presidential debate on June 5, 2007. Available on YouTube http://youtube.com/watch?v=RKQmYfY3R7c
Interview with Ron Paul on Fox Business Network 10/16/2007 http://www.youtube.com/watch?v=JXfDHXpP87o
The rumour persists. Paul continues to be criticized with the same straw man argument. For example, on December 6th 2007, a critical commentary by David Lum of the American Enterprise Insitute was aired on NPR claiming that Paul wants to fix the dollar to gold, as it was from 1789-1933, and arguing that it is a bad idea.
The views expressed in this
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Thanks for clearing up that issue, I think Mr. Paul's idea for allowing Gold and Silver as legal tender is the idea of the century, but with the new raid on the Liberty Dollar National Sales office, how do we even begin to make the metal commercially 'workable'? I like the PhoenixDollar.com, which is also a Silver private barter currency but there is very limited use on that also.
Posted By: Walt Thiessen
Date: 2007-11-16 08:07:10
Mark Herpel raises a valid question. The answer to his question is simple. Stop making bankers and money traders responsible for enforcing money laundering laws. That was the basis for the raid on Liberty Dollars according to a Reason article, and I suspect the article's claim is correct.
The second way to make precious metal commercially 'workable' is to install a government that is not hostile to hard money. Paper money originally derived from "warehousing receipts" of gold and silver. There is no reason why such a concept cannot continue. The problem with paper isn't that issuers of paper can print more paper than they have stored in precious metal. The problem is that the Federal government has long been a supporter of such inflationary policies, and it was these same inflationary policies that were eventually used in 1913 to justify the creation of the Federal Reserve in the first place. If the government focused instead on cracking down on currency fraud in the form of unbacked paper warehouse receipts, the problems associated with such paper would be greatly diminished. It would also make it quite possible to trade and use precious metals as currency electronically, without having to carry coins and bars around in our pockets. Engaging in the issuance of unbacked paper that is claimed to be backed by hard metal is fraud, and it should be treated as such.
How does Congressman Paul propose that the federal government remove sales taxes on gold and silver, when these taxes are imposed by the states? Wouldn't that be a violation of states' rights?
People should definitely pay more attention to primary sources and draw their own conclusions -- they should listen to what Ron Paul says in his own speeches and in his own words.
Ron Paul was a keynote speaker at the first NH Liberty Forum, in 2007. He spoke at length about gold and silver currency. Video of the entire speech is available at: http://freestateproject.org/libertyforum
Bernard von NotHaus, creator of the gold-and-silver-backed LibertyDollar, is a speaker at the upcoming NH Liberty Forum, in January 2008.
This article had a pretty strong assertion until the Ron Paul presidential campaign posted an article (dated 11-17-2007) on the campaign's home page that quotes an article sourced from CBS News that states "Specifically, he wants to pull troops out of Iraq, repeal the income tax, abolish the Federal Reserve and put America back on the gold standard." Although one point sustaining the original article is that a google search on ronpaul2008.com and "gold standard" only return two hits, the second one focusing on a 1966 quote of former Federal Reserve Chairman Alan Greenspan.
http://www.webcitation.org/5TR6o7DX2
Nothing beats researching primary sources as Dennis Goddard mentions above.
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