Top Pro & Con Arguments
Returning to a gold standard would prevent excessive money printing, which would reduce the U.S. trade deficit and military spending.
A trade deficit is when the country buys more goods and services (imports) than it sells (exports), creating the need for foreign financing that must be repaid when the deficit turns into a surplus (when the country is exporting more than it is importing).
The American current fiat money system allows the Federal Reserve to finance large trade deficits by printing money. Since abandoning the gold standard in 1971, the United States has had the highest trade deficits the world has ever seen – reaching a high of $758 billion in 2006.
In May 2020, $6.78 trillion of American national debt was owned by foreign creditors. Japan held the most at $1.26 trillion, followed by China ($1.08 trillion), the United Kingdom ($394 billion), and Luxembourg (262.7 billion), among other countries. American debt held by foreign creditors amounts to about a third of all U.S. debt.
Japan and China want the value of the U.S. dollar to be higher than their own currencies. But, as Ron Paul, former U.S. Representative (R-TX) noted, “debt of this sort always ends by the currency of the debtor nation decreasing in value. And that’s what has started to happen with the dollar, although it still has a long way to go. Our free lunch cannot last. Printing money, buying foreign products, and selling foreign holders of dollars our debt ends when the foreign holders of this debt become concerned with the dollar’s future value.”
According to Ron Paul, former US Representative (R-TX) “fiat money enable[s] government to maintain an easy war policy…. To be truly opposed to preemptive and unnecessary wars one must advocate sound money to prevent the promoters of war from financing their imperialism.”
The government’s ability to limitlessly print fiat paper money allows it to fund a massive global defense establishment, an estimated 800 bases in 80 or more countries and an operational ground troop presence in at least 15 countries.The US defense budget was $738 billion for 2020.  In 2019, defense spending was $732 billion, or about 38% of global defense spending, and almost as much as the next 10 countries’ defense spending combined.
This level of spending would not be possible if the United States returned to a full gold standard.