Ok – I’m wiped out on the PPACA for a while. I’ve done my best to slog through – but I need a break.
In the meantime, there are a set of economic questions that various parties have suggested I write about. One of them came to the forefront today, as part of another conversation I was having on the Interwebz. The issue is the gold standard.
When I first thought about doing a post on the gold standard, which is the idea that our currency needs a commodity of intrinsic value, specifically gold, to ensure its worth, rather than simply being made to worth something because it says so (i.e. fiat money) I thought I would have lots of evidence and complicated points to make.
But I realize that it comes down to this. If you take out the world gold and insert any of the following words (or phrases):
giant stone wheels at the bottom of the sea
or pure-bred Husky puppies
and you are still ok with this as a mechanism for ensuring the stability of our currency, then sure, maybe we can go back to the gold standard. But if you think any one of those is a crazy idea – well – then I have bad news for you. So is the gold standard.
If anyone isn’t convinced, then maybe I will do a follow-up with all the complexities included. But really – a commodity is a commodity. You can’t think one is perfect and the rest are crap. The concept, and the associated problems for an economy of 16 trillion dollars, are the same.
Edited to add: 50 House points to the first person to point out which on that list above HASN’T been used before as money in an economy – at least to my knowledge.