Paper money

[eflatminor]

Just to clarify, you equate a central bank with central planning?

What would you call central price controls? The Fed controls, centrally, the price of money. That is central planning. Note I've not claimed they control EVERYTHING (thank goodness), but yes, it is an example of central planning.

You claim to have studied Mises. You should know this.

You dodged the question. Does the existence of a central bank mean to you that the economy is centrally planned?

No. It means the market for the price of money is centrally planned.

Do you support any other central price controls? Cars? Computers? How about milk?

And yes, I've read Mises. I'm pretty well read in history of economic thought. If you want to debate Mises' "The Theory of Money and Credit" (1912), you have some heavy lifting to do.

If read it, along with many other works by the man, but let's stick to the topic at hand.

I advocate a sound money policy and allowing the market to determine interest rates. Simple as that. I've made clear why I feel this way.

 

[william the wie]

If you'd like to point to these libertarian economists that are "paid shills", we'd like to see the list and your evidence. Don't worry, I'm not holding my breath on this one....

Well, I would avoid the phrase "paid shills" as a bit too harsh, implying that the motivation for the publications is simply financial gain. But I would note two prominent examples. F A Hayek was turned down in 1950 for employment as an economist at both Princeton and the University of Chicago. His position at the University of Chicago was a privately funded position in the Committee on Social Thought. Prior to that, his tenure at the London School of Economics was defended in no small part by J M Keynes who nominated Hayek in 1944 for his membership in the British Academy. Apparently the LSE--Cambridge controversy was a rather cosy one for Hayek.

Likewise von Mises moved to the United States in 1940 and in 1945 became a visiting professor at NYU; again with a privately funded position. Laurence Fertig, a libertarian enthusiast and member of the NYU board fully funded his salary while he engaged in love/hate exchanges with Ayn Rand and Milton Friedman.

In both cases, the authors lived mainly on the income provided by ideological benefactors outside of any normal peer reviewed faculty position.

What I find incredible is that the Austrians actually used in the field: Schumpeter's creative destruction as updated by Arthur and Popper's reflexivity; are so rarely quoted by self-described Austrians.

 

[eflatminor]

If you'd like to point to these libertarian economists that are "paid shills", we'd like to see the list and your evidence. Don't worry, I'm not holding my breath on this one....

Well, I would avoid the phrase "paid shills" as a bit too harsh, implying that the motivation for the publications is simply financial gain.

So would I, but I appreciate your insight into the realities of funding the work of economists, which will be found across the spectrum, I'm sure.

 

[Moonglow]

The US govt also makes money in it's investments.

How much did the gov. make on its subsidies (please don't call them "investments") to the auto, solar, farming, and financial companies?

They also invest in other things, but I will not waste my time on explaining it.

 

[Bombur]

You don't have to do anything. However, if you want to be taken seriously as a grown up capable of debating with logic, reason and specificity, you'll have to do better than your childish little taunt.

Please, tell us why standing for a sound money should not be taken seriously.

The floor is yours...

Then make an argument why the government should choose a precious metal as the basis of our money supply. Be sure to include "reason and logic" in your argument.

I will promise not to laugh.... too hard.

Read the thread. I've done so, repeatedly.

Allow me to sum up for you: Sound money (a gold or any similar standard) and a market free of central price controls on money (like we had 1780-1913) produced at least the level of prosperity and economic growth and prosperity as we've experienced under the Fed's reign (I argue more)...and did so with NO inflation, NO income taxes, NO significant debt or unfunded liabilities, wars and entitlements that actually had to be paid for, far fewer "great" depressions, and further, produced a populace with less of a wealth and income gap that we see today.

1913 to today? We have $17 trillion of debt, over $100 trillion of unfunded liabilities, 2500% inflation (the most regressive tax of them all), giant swings in the economy to include the greatest depression of them all, the highest corporate tax rate in the world, personal income taxes that can take over half a man's income, endless wars and entitlements that will be the burden of future generations, and a wealth and income gap far greater than during the so call 'robber baron' days...none of which could be possible with a sound money policy and allowing the market to set the price of money (the interest rate).

There you go, a sound argument based in logic, reason and specificity.

Now, can you retort without childish name calling? We'll see...

Your facts are questionable. From 1780 to 1913 the US most certainly tried to control prices through controlling trade. One of the reasons there was a civil war was the Federal manipulation of money.

You then compare GDP growth of the past to today. The US conquered or took control over massive amounts of land during that time period. It was also a period of industrialization and massive immigration. The two time periods are not even remotely comparable for a lot of reasons but to claim that the gold standard worked then so it would work now is not established. There is terribly weak causation for the time period itself let alone today.

The equivocation of inflation to a tax is not established. It is a bad assumption.

The swings have been less and the worse swing of all, (The Great Depression) was largely caused because of a limited money supply. One of the major problems with a gold standard.

Our civilization has improved greatly from what it was in the 1800's or the early 1900's. Those improvements do cost money. The fundamental premise of your argument is so flawed that it is unredeemable and you have said little to nothing about the gold standard itself.

 

[oldfart]

You dodged the question. Does the existence of a central bank mean to you that the economy is centrally planned?

No. It means the market for the price of money is centrally planned.

Do you support any other central price controls? Cars? Computers? How about milk?

OK, the phrase "central planning" gets thrown around a lot. To me, central planning is a continuum from Oskar Lange and French indicative planning in the 60s for market-based central planning and Soviet-style command economies on the other end. All command economies are centrally planned, but many centrally planned economies are market-based (which includes virtually all national economies today).

The monetary base has always been exogenously determined in monetary theory. First was the gold standard where the supply was determined by accidents of geology and the cost of extraction. With a fiat currency it is determined by government action. This supply function interacts with the demand for currency to determine a market equilibrium for interest rates. A central bank can target a number of indicators and can use a number of tools which are revealed in the ultimate market determined interest rate. Stability of interest rates is a low priority for a central bank, and manipulation of interest rates is normally a tool to deal with either underemployment of resources or inflation.
So I am left with the impression that you object to the concept of monetary policy in its entirety?

I favor price controls when, and only when, market failure results in serious economic misallocation. We are not a perfectly competitive economy. A simulated market is better functioning than a monopolistic market, or a market dominated by uncompensated externalities.

Perhaps you can enlighten me as to how you propose to reduce market imperfections and gain the results of competitive markets without government restrictions? Even Milton Friedman made a case famously for government regulation in support of effective markets.

 

[william the wie]

Old Fart, since the postulates of the Austrian school reject the possibility of equilibrium and accept the idea that bad outcomes are possible such as sub-optimal lock-ins (which side of the road to drive on for example) may have changeover costs that exceed net present value of changeover imperfections in markets are perceived not real.

The kibitzer/micro-manager always sees a "better" way of doing things. If you doubt that tell me the closest restaurant you manage/own to Jax Beach and I am certain I can send you a very long list of "helpful" suggestions.

 

[eflatminor]

Then make an argument why the government should choose a precious metal as the basis of our money supply. Be sure to include "reason and logic" in your argument.

I will promise not to laugh.... too hard.

Read the thread. I've done so, repeatedly.

Allow me to sum up for you: Sound money (a gold or any similar standard) and a market free of central price controls on money (like we had 1780-1913) produced at least the level of prosperity and economic growth and prosperity as we've experienced under the Fed's reign (I argue more)...and did so with NO inflation, NO income taxes, NO significant debt or unfunded liabilities, wars and entitlements that actually had to be paid for, far fewer "great" depressions, and further, produced a populace with less of a wealth and income gap that we see today.

1913 to today? We have $17 trillion of debt, over $100 trillion of unfunded liabilities, 2500% inflation (the most regressive tax of them all), giant swings in the economy to include the greatest depression of them all, the highest corporate tax rate in the world, personal income taxes that can take over half a man's income, endless wars and entitlements that will be the burden of future generations, and a wealth and income gap far greater than during the so call 'robber baron' days...none of which could be possible with a sound money policy and allowing the market to set the price of money (the interest rate).

There you go, a sound argument based in logic, reason and specificity.

Now, can you retort without childish name calling? We'll see...

Your facts are questionable. From 1780 to 1913 the US most certainly tried to control prices through controlling trade. One of the reasons there was a civil war was the Federal manipulation of money.

Disagree. Tariffs and trade have nothing to do with the issue at hand. Further, I disagree Federal money manipulation, which was practically non existent compared to the Federal Reserve of today, was at all a significant factor that led to civil war. That war was about states nullifying Supreme Court orders to return property (slaves) to their owners. Good for them, but we're talking about sound money, not the civil war.

You then compare GDP growth of the past to today. The US conquered or took control over massive amounts of land during that time period. It was also a period of industrialization and massive immigration. Irrelevant The two time periods are not even remotely comparable for a lot of reasons but to claim that the gold standard worked then so it would work now is not established. Disagree. The time periods are absolutely comparable, especially with regard to debt and inflation, neither of which got out of control because we had a sound money policy. There is terribly weak causation for the time period itself let alone today. Disagree...strongly.

The equivocation of inflation to a tax is not established. It is a bad assumption. Awe come on! Who exactly is hurt most by relentless inflation? Rich guys or the poor? Call it what you want, inflation is death blow to the poor. That is absolutely undeniable.

The swings have been less and the worse swing of all, (The Great Depression) was largely caused because of a limited money supply. One of the major problems with a gold standard. I disagree that "the swings have been less". Fewer swings? Sure, but absolutely more severe in terms of extended periods of growth, severe retractions and overly-prolonged recessions. The earlier period saw market driven swings that were less severe AND we saw flat inflation.

Further I strongly disagree that the Great Depression was caused by sound money policy. No frickin' way!!! Historians lack consensus in determining the causal relationship between government economic policy in causing the Depression, but hell, even the Keynesians believe it was caused by underconsumption and over investment, causing a bubble. Sorry, there is no way you can blame GD on sound money. NO WAY!

Our civilization has improved greatly from what it was in the 1800's or the early 1900's. Technological advancements, which have nothing to do with sound money Those improvements do cost money. Private capital...red herring alert! The fundamental premise of your argument is so flawed that it is unredeemable and you have said little to nothing about the gold standard itself.

We're just going to have to disagree on this one!

 

[eflatminor]

You dodged the question. Does the existence of a central bank mean to you that the economy is centrally planned?

No. It means the market for the price of money is centrally planned.

Do you support any other central price controls? Cars? Computers? How about milk?

OK, the phrase "central planning" gets thrown around a lot. To me, central planning is a continuum from Oskar Lange and French indicative planning in the 60s for market-based central planning and Soviet-style command economies on the other end. All command economies are centrally planned, but many centrally planned economies are market-based (which includes virtually all national economies today).

The monetary base has always been exogenously determined in monetary theory. First was the gold standard where the supply was determined by accidents of geology and the cost of extraction. With a fiat currency it is determined by government action. This supply function interacts with the demand for currency to determine a market equilibrium for interest rates. A central bank can target a number of indicators and can use a number of tools which are revealed in the ultimate market determined interest rate. Stability of interest rates is a low priority for a central bank, and manipulation of interest rates is normally a tool to deal with either underemployment of resources or inflation.
So I am left with the impression that you object to the concept of monetary policy in its entirety?

That is correct. The reasons why I object to non-market determined monetary policy are that it leads to relentless inflation and allows law makers to enact expenditures (typically overseas interventions and entitlements) that they don't have to pay for, which in turn, results in the kind of debt and unfunded liabilities we have today. With sound money, inflation is market driven (and usually flat overall) and debt tends to remain under control because government spending must be paid for.

I favor price controls when, and only when, market failure results in serious economic misallocation. We are not a perfectly competitive economy. A simulated market is better functioning than a monopolistic market, or a market dominated by uncompensated externalities.

Okay, but the market for money is highly competitive and in no way monopolistic. Not sure what 'uncompensated externalities' you might be referring to. An externality exists when the welfare of a company depends not only on its activities, but also on activities under the control of some other entity. I don't see that, uncompensated or otherwise, in the market for interest rates.

Perhaps you can enlighten me as to how you propose to reduce market imperfections and gain the results of competitive markets without government restrictions? Even Milton Friedman made a case famously for government regulation in support of effective markets.

I suppose that I do not expect any market to be free of imperfections. I accept that every system has it's flaws and that nothing is perfect. I try to look at the actual results (another Friedman imperative!) of free markets vs those where intervention/control was practiced. Inevitably, I see far more harm than good when the central planners...sorry, regulators...try to outperform free people making voluntary choices. Stated differently, I'd take potential market imperfections over inflation and debt in a heartbeat.

 

[Moonglow]

Our economy could be like the early mountain men and laborers in the US, we could pay in whiskey, or tobacco..

 

[eflatminor]

Our economy could be like the early mountain men and laborers in the US, we could pay in whiskey, or tobacco..

The grown ups are talking now. Off you go.

 

[eagle1462010]

First off, in G20 after G20 summits countries have been accusing each other of a Currency War. Japan and China have purposely bought U.S. Dollars to deflate currencies. This along with Free Trade issues make an unfair playing field for U.S. Exports and they are kicking our butts. We allow it to happen and we offshore our jobs. Free Trade has cost of Millions of jobs. Allowing manipulation of exchange rates is the manipulation of currency.

If countries are purposely manipulating currency, then isn't that the Central Gov'ts planning to gain an edge through CENTRAL PLANNING OF CURRENCY............................

Our founding fathers warned us to not allow the Banks to take control of our currency. Andrew Jackson was the last President to put the Second National Bank of the United States basically out of business. All of that changed in 1913, when the Socialist Liberal from Hell helped push the 17th Amendment in so banks would again have control over our currency. They used this to manipulate markets and created bubbles NOT on EQUITABLE TRADE but TRADING through FIAT currency. They borrowed their asses off and created a house of cards which was unsustainable and helped cause the Great Depression.

The Glass Steagal Act was passed to stop this from happening again. We didn't learn from history. We did away with it, and allowed Derivatives to EXPLODE from 2000 to 2007 which eventually crashed the system through the bubble machine with FIAT CURRENCY. The Global Derivatives were above 1200 TRILLION before they were done. Through Hedgers and the like. Borrowing on Margin just as in the Great Depression.

So we crash, and then the Federal Reserve gave out 16.1 TRILLION at the Discount windows at 0% to 1/4%. Most of the loans went to a few major banks who have ties to Ownership to the Federal Reserve............Yet the Gov't kept telling the public it was all about TARP. It was never about TARP. Fox news and Bloomberg went to the supreme Court to force this disclosure under the Freedom of Information Act. I've shown the data from the GAO many times, and the Supreme Court Ruling that FORCED IT.

We have Banks who loan us money, by creating our own currency. The Constitution allows us to do that without paying anybody a damn thing...So why should we pay them to create our currency. Of course they don't really print it. They just hit the enter key.

Under this same way of doing business our Markets have exploded to new record highs. They are borrowing on Margin again, and without the MANIPULATION of the Federal Reserve it would have probably already imploded again. At a tune of 85 BILLION a month..............They eventually will pull the rug out again.

This is currency manipulation to INSANITY. This is a CASINO STOCK MARKET with FIAT CURRENCY which is exactly why we don't see the jobs following the Markets.

This is why the 17th should be repealed. This is why we need Repeal sections of the Graham Leahy Act. Primarily the area of shadow trading commodities outside of SEC controls where they used to limit trading...............

and on and on again..............The economists will ditch what I've said on this board more than likely. I don't care. I've read more about these things then I really ever cared to know. I know this. The Founding Fathers where wise men. They WARNED us and we didn't heed their warnings. The last man to stop this was Andrew Jackson and it needs to happen again.

I support EQUITABLE CAPITALISM.. Not pure BS Market manipulation with FIAT MONEY.

 

[jasonnfree]

I believe you're missing the concept of how sound money works. The entire world's supply of money could be based on a single ounce of gold...literally. The market would simply adjust the value of the gold based on supply and demand. As long as currency is based on something REAL (and gold is as good a basis as any), it matters not how the supply fluctuates over time.



This sounds like you're lamenting inflation and how it has, over time, so negatively impacted the average working guy.

Couldn't agree with you more.

That problem we can lay at the feet of The Federal Reserve. In 1913, the Federal Reserve was created to stabilize gold and currency values. What they REALLY did was force inflation that should have never existed in the first place. The proof is in the pudding: From 1780 until 1913, the rate of inflation was flat. Some products/services saw inflation, others deflation. Point is, the market determined that, not central planners. From 1913 until today, inflation is up about 2500%. Now that's the most regressive tax of them all.

One might as why would the Fed force inflation? The answer is in the mindset of leaders like Wilson, FDR and those cut from that same bolt, which includes Ds and Rs, no doubt. Basically, the Fed allows Congress to enact entitlements and engage in warfare without having to pay for those expenditures beforehand or even spell out how they will be paid for eventually. Instead, they place the burden on the backs of those yet to be born through the Federal Reserve mechanism. It's quite the scam.

So, I agree with you that it's a shame the average guy has such a hard time these days affording what he used to. I hope you will join us in the calls to end the Fed and return to a sound monetary policy. Baby steps, at least.

From 1780 until 1930 The working class didn't get ahead either.

That's a lie. Compared to the rest of the world, more American poor became middle class than at any time in history. You start off with a falsehood, anything that comes afterwards is HIGHLY suspect.



There were even bigger panics and economic downturns after the Federal Reserve. We're in one now. And yes, inflation includes inflation in the cost of labor. That doesn't change the fact that buying power has been severely eroded. This doesn't so much hurt the rich, but it's DEVASTATING to the poor.

Entitlements. That hateful word has allowed us to have social security and medicare.

Which are broke and fiscally unsustainable, particularly in an environment of ongoing inflation and government meddling in the health sector. Have you seen the rate of inflation in medical services? It isn't pretty.

I like these times better and I'm old enough to remember talking to oldsters, some born during the civil war who said the good old days weren't all that good. Look into some of the pictures in Jacob Riis's works. Those photos of near starving kids living in alleys wasn't trick photograpy either. Jack London wrote similar stuff about the good old days.

Anecdotal at best. I'll stick to real evidence, not what some old guy said to me one time.

"Thats a lie" you start out with, yet no proof that I lie. What you post is mostly theory anyway. The middle class got ahead back in those days compared to the rest of the world you say, without any proof. Of course though, even our people in this country in great need today probably look middle class compared to some parts of the world, and you use some parts of the world as your comparison without mentioning what parts of the world. So you deny pictures of children in poverty in this country in the old days? You stick to real evidence? You might have learned from talking to the old timers of those times also instead of relying just on theory. That's what you have since you haven't given any evidence yet. Any major countries now using the gold standard if it's so great? How much gold would have to be mined to back all those currencies today?

 

[eagle1462010]

Historical Consumer Price Index

From 1913 to 1970 the CPI went from 9.8 to 37.8 a net change of 28 points..........

From 1970 to 2014 it went to 233.91 a net change of 195.91 points.


US Dollar

As you can see, this was largely successful until the late 1960s, when so much gold was required to buy up all the dollars foreign countries were selling that the US government simply gave up, and "closed the gold window" in 1971. The value of the dollar collapsed over the next 10 years, hitting bottom in 1980. By paying high rates of interest and reducing taxes, the dollar slowly recovered some of it's value over the next 20 years, but expansive money policy in the 1990s eventually caught up with the dollar in 1999.

Since 1999, the dollar has fallen in value from about 123 mg of gold to less than 21 mg today – a drop of more than 80%. Overall, from 1900 to 2010, the dollar fell from 1500 mg to 25 mg, losing over 98% of it's purchasing power. Penny candy now costs 50 cents. The "Five and Dime" is now the Dollar Store.

The future, however, looks even bleaker. Recent comments from the Federal Reserve indicate that near-zero interest rates and "quantitative easing" (Fed-speak for money printing) can be expected to continue "for an extended period".

 

[william the wie]

No, it's a dichotomy. Wealth and money income are completely separate accounts. Well into the 1910s the average small town or suburban yard was 16-20 acres or enough land to feed a very large family. My mother's yard was 19 acres when she died in 2008. Today a commercial ran during the news offering 10 acres, 3/b 2/ba and an hour's commute to Jax FL for $89,000. I commented to my wife about how much the price had gone up. Lacking wealth in any sense of the word vulnerability to the labor market has been climbing rapidly.

 

[eagle1462010]

Gold created a back up standard to currency and it had been that way for a very long time.

Without anything of value to back up PAPER currency the sky's the limit. And let the printing presses go hog wild. Which is why Gold is so high now, and why our money is growing more worthless every day. It also gave the Gov't unlimited borrowing power to print paper beyond the ability to pay it back.

Since going off the standard our CPI's have increased dramatically as has our debt and spending.

We shouldn't spend more than we take in and should actually limit money in circulation to increase the dollars worth. But alas, the countries in this world try to PURPOSELY lower their currencies values to increase their exports, and so it goes on until the next bubble explodes.

 

[oldfart]

Old Fart, since the postulates of the Austrian school reject the possibility of equilibrium and accept the idea that bad outcomes are possible such as sub-optimal lock-ins (which side of the road to drive on for example) may have changeover costs that exceed net present value of changeover imperfections in markets are perceived not real.

Well I sometimes think that classical economic theory reduces equilibrium to an intellectual fetish. The Austrians are prone to go to the other extreme and reject the idea of measurement and modeling of any kind. This is kind of peculiar for a group that started out with Bohm-Bawerk and Menger. Somewhere in between is where most of us work and practice. Some of the popular support for the Austrian School seems to me to be thinly disguised nihilism in the service of a rather cynical theory which amounts to a class version of social Darwinism. Of course if it were real "survival of the fittest" (an obvious oxymoron) then it would justify the 99% murdering the 1% in their sleep and taking everything. Come to think of it, that's a petty good description of the October Revolution and the fittest turned out to be Stalin. I'm amused that so many rich people act like Romanovs and use the Stalinist justification.

The kibitzer/micro-manager always sees a "better" way of doing things. If you doubt that tell me the closest restaurant you manage/own to Jax Beach and I am certain I can send you a very long list of "helpful" suggestions.

We used to have a restaurant in Tallahassee, but it was too far away for good management. DeFuniak Springs is the closest, but Mary Esther has the best food. I handle the insurance (number one son and I own the insurance agency along with the managing agent) and the tax work and my son runs the accounting and payroll. We have the same functional duties in other businesses we have an ownership interest in (currently shopping center ownership and management, site preparation and landscaping, check cashing services, real estate management, a gun store, and a couple more businesses in the works for the summer).

All suggestions will be given serious consideration. In my experience, great business ideas and improvements are easy to find; it's getting the right people and the execution that is the hard part.

 

[william the wie]

Old Fart, since the postulates of the Austrian school reject the possibility of equilibrium and accept the idea that bad outcomes are possible such as sub-optimal lock-ins (which side of the road to drive on for example) may have changeover costs that exceed net present value of changeover imperfections in markets are perceived not real.

Well I sometimes think that classical economic theory reduces equilibrium to an intellectual fetish. The Austrians are prone to go to the other extreme and reject the idea of measurement and modeling of any kind. This is kind of peculiar for a group that started out with Bohm-Bawerk and Menger. Somewhere in between is where most of us work and practice. Some of the popular support for the Austrian School seems to me to be thinly disguised nihilism in the service of a rather cynical theory which amounts to a class version of social Darwinism. Of course if it were real "survival of the fittest" (an obvious oxymoron) then it would justify the 99% murdering the 1% in their sleep and taking everything. Come to think of it, that's a petty good description of the October Revolution and the fittest turned out to be Stalin. I'm amused that so many rich people act like Romanovs and use the Stalinist justification.

The kibitzer/micro-manager always sees a "better" way of doing things. If you doubt that tell me the closest restaurant you manage/own to Jax Beach and I am certain I can send you a very long list of "helpful" suggestions.

We used to have a restaurant in Tallahassee, but it was too far away for good management. DeFuniak Springs is the closest, but Mary Esther has the best food. I handle the insurance (number one son and I own the insurance agency along with the managing agent) and the tax work and my son runs the accounting and payroll. We have the same functional duties in other businesses we have an ownership interest in (currently shopping center ownership and management, site preparation and landscaping, check cashing services, real estate management, a gun store, and a couple more businesses in the works for the summer).

All suggestions will be given serious consideration. In my experience, great business ideas and improvements are easy to find; it's getting the right people and the execution that is the hard part.

Then here's mine, rip off every halfway decent recipe from "diners, drive-in and dives" and open a slightly upscale version of Golden Corral.

As to the survival of the fittest wealthier nations are reverting to a mean of 1.6 children per woman which is not sustainable. That ratio is in the ballpark of the 60% maternal inheritance used by the breeders of mammals as a rule of thumb so we are looking at serious selection pressure for the next 3-4 centuries.

 

[Bombur]

Read the thread. I've done so, repeatedly.

Allow me to sum up for you: Sound money (a gold or any similar standard) and a market free of central price controls on money (like we had 1780-1913) produced at least the level of prosperity and economic growth and prosperity as we've experienced under the Fed's reign (I argue more)...and did so with NO inflation, NO income taxes, NO significant debt or unfunded liabilities, wars and entitlements that actually had to be paid for, far fewer "great" depressions, and further, produced a populace with less of a wealth and income gap that we see today.

1913 to today? We have $17 trillion of debt, over $100 trillion of unfunded liabilities, 2500% inflation (the most regressive tax of them all), giant swings in the economy to include the greatest depression of them all, the highest corporate tax rate in the world, personal income taxes that can take over half a man's income, endless wars and entitlements that will be the burden of future generations, and a wealth and income gap far greater than during the so call 'robber baron' days...none of which could be possible with a sound money policy and allowing the market to set the price of money (the interest rate).

There you go, a sound argument based in logic, reason and specificity.

Now, can you retort without childish name calling? We'll see...

Your facts are questionable. From 1780 to 1913 the US most certainly tried to control prices through controlling trade. One of the reasons there was a civil war was the Federal manipulation of money.

Disagree. Tariffs and trade have nothing to do with the issue at hand. Further, I disagree Federal money manipulation, which was practically non existent compared to the Federal Reserve of today, was at all a significant factor that led to civil war. That war was about states nullifying Supreme Court orders to return property (slaves) to their owners. Good for them, but we're talking about sound money, not the civil war.

You then compare GDP growth of the past to today. The US conquered or took control over massive amounts of land during that time period. It was also a period of industrialization and massive immigration. Irrelevant The two time periods are not even remotely comparable for a lot of reasons but to claim that the gold standard worked then so it would work now is not established. Disagree. The time periods are absolutely comparable, especially with regard to debt and inflation, neither of which got out of control because we had a sound money policy. There is terribly weak causation for the time period itself let alone today. Disagree...strongly.

The equivocation of inflation to a tax is not established. It is a bad assumption. Awe come on! Who exactly is hurt most by relentless inflation? Rich guys or the poor? Call it what you want, inflation is death blow to the poor. That is absolutely undeniable.

The swings have been less and the worse swing of all, (The Great Depression) was largely caused because of a limited money supply. One of the major problems with a gold standard. I disagree that "the swings have been less". Fewer swings? Sure, but absolutely more severe in terms of extended periods of growth, severe retractions and overly-prolonged recessions. The earlier period saw market driven swings that were less severe AND we saw flat inflation.

Further I strongly disagree that the Great Depression was caused by sound money policy. No frickin' way!!! Historians lack consensus in determining the causal relationship between government economic policy in causing the Depression, but hell, even the Keynesians believe it was caused by underconsumption and over investment, causing a bubble. Sorry, there is no way you can blame GD on sound money. NO WAY!

Our civilization has improved greatly from what it was in the 1800's or the early 1900's. Technological advancements, which have nothing to do with sound money Those improvements do cost money. Private capital...red herring alert! The fundamental premise of your argument is so flawed that it is unredeemable and you have said little to nothing about the gold standard itself.

We're just going to have to disagree on this one!

Government manipulation of the economy is relevant.

Conquering land, immigration, and industrialization are most certainly relevant to growth. As are many other things that distinguish one age to another.

Inflation is not a deathblow to the poor.

The GDP growth of the past is under vastly different circumstances which you refuse to even consider relevant because you are trying desperately to assume that the gold standard had something to do with it.

The Great Depression was made significantly worse by effectively decreasing the money supply. This can happen when gold is the basis of your money supply because the speed of money slows down effectively lowering the money supply and making the recession/depression worse.

You have said little to nothing substantial concerning money supply. You have described a period of time that was massively different than today and made a huge leap by simply assuming that all of the things that you consider to be good about the past and bad about the present are somehow due to the gold standard with absolutely zero evidence or logical reasoning that would suggest it had anything to do with the gold standard.

It is not that we are disagreeing, it is that you have not even started to approach the issue in a meaningful way.

 

[eflatminor]

From 1780 until 1930 The working class didn't get ahead either.

That's a lie. Compared to the rest of the world, more American poor became middle class than at any time in history. You start off with a falsehood, anything that comes afterwards is HIGHLY suspect.



There were even bigger panics and economic downturns after the Federal Reserve. We're in one now. And yes, inflation includes inflation in the cost of labor. That doesn't change the fact that buying power has been severely eroded. This doesn't so much hurt the rich, but it's DEVASTATING to the poor.



Which are broke and fiscally unsustainable, particularly in an environment of ongoing inflation and government meddling in the health sector. Have you seen the rate of inflation in medical services? It isn't pretty.

I like these times better and I'm old enough to remember talking to oldsters, some born during the civil war who said the good old days weren't all that good. Look into some of the pictures in Jacob Riis's works. Those photos of near starving kids living in alleys wasn't trick photograpy either. Jack London wrote similar stuff about the good old days.

Anecdotal at best. I'll stick to real evidence, not what some old guy said to me one time.

"Thats a lie" you start out with, yet no proof that I lie. What you post is mostly theory anyway. The middle class got ahead back in those days compared to the rest of the world you say, without any proof. Of course though, even our people in this country in great need today probably look middle class compared to some parts of the world, and you use some parts of the world as your comparison without mentioning what parts of the world.

No, our "poor" Americans don't look middle class compared to the rest of the world, they look RICH.

Understanding Poverty in America

How Poor Are America's Poor? Examining the "Plague" of Poverty in America

And sorry, but the prosperity of Americans in the pre Progressive era is undeniable. Get thee a history book!

So you deny pictures of children in poverty in this country in the old days?

Oh, well, if you have a picture of a poor person...that surely makes your case!

You might have learned from talking to the old timers of those times also instead of relying just on theory. That's what you have since you haven't given any evidence yet. Any major countries now using the gold standard if it's so great?

Because most countries, like us, are run by central planners that do not want to have to pay for their entitlement programs and wars, which sound money policies would require them to do. No, they'd rather lay the burden of their largess on those yet to be born.

Disgusting.

How much gold would have to be mined to back all those currencies today?

Your ignorance is showing. The entire world's money supply could be based on a single ounce of any precious metal. Nothing need be mined.

Get thee an economics book while your at it!