Top Pro & Con Arguments
A gold standard would reduce the risk of economic crises and recessions, while increasing income levels and decreasing unemployment rates.
The ability of the Federal Reserve to print fiat money (money not backed by a physical commodity such as gold) and maintain easy credit by keeping interest rates too low from 2001 to 2006 was a significant cause of the real estate bubble which led to the Great Recession.The response to the recession has been more of what caused it in the first place – printing money. Over $2 trillion in bailouts for failed financial institutions was paid for with Federal Reserve money, setting the stage for another possible bubble and collapse. The Federal Reserve’s history of providing economic stability with fiat money has not been a good one. Since the United States abandoned the gold standard there have been 13 financial crises, including the financial crisis of 2008-2009 and the COVID-19 (coronavirus) pandemic recession.
Prior to the United States abandoning the gold standard, the real median income for men rose an average of 2.7% per year between 1950 and 1968.Between leaving the gold standard in 1971 and 2011, the average median income for men only increased 0.2% per year.
In addition, unemployment levels were lower in the decades leading up to the United States abandoning the gold standard. Between 1944 and 1971, while on a partial gold standard, unemployment averaged 5%. From 1971 to 2019, unemployment levels have averaged 6.2% under the fiat money standard.Read More