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Because that’s how democracy is supposed to work. Ultimately democracy is not about bringing the most competent people around. It’s so peoples voice matters so

Because that’s how democracy is supposed to work. Ultimately democracy is not about bringing the most competent people around. It’s so peoples voice matters so when push comes to shove, we don’t become like Sri Lanka. Also I am not convinced Fed is apolitical. The proposed solution would be to go back to gold standard and Fed not have the power to seize it like Roosevelt did. So we need no fake money and fake policies around it.

rat87 4y ago
I'm pretty sure the gold standard is seen as a joke but the vast majority of economists. During the great depression countries who went off gold standard first recovered more quickly. Roosevelt did the right thing
- mercy_dude 4y ago
  The same economists who also thought inflation is transitory.
- Grim-444 4y ago
  I'm always confused at how there's such a seemingly large mismatch between on one hand people trivially dismissing the gold standard as a joke and on the other the fact that the gold standard seemingly worked well enough for this country for hundreds of years. It was the system that powered the country over the majority of its history, for the vast majority of its expansion and rise to power. But it's so obviously a joke of a system?
  - deleted 4y ago
    [deleted]
  - generj 4y ago
    It didn’t work well at all. We had frequent economic panics all through the 1800s and early 1900s. When the US rose to power (1930s to 1940s) gold was mostly not used in practice due to international traffic being mostly blocked (due to nationalist impulses during the Depression) or under heavy credit (during WW2). There’s a decent argument to be made gold caused the Great Depression or at least exacerbated it. The “gold standard” system that started under Breton Woods (1944-1971) was basically a polite fiction, and when someone called the fiction it died. A gold standard would be totally unworkable for today’s trade. It barely served the fledgling globalism of the 1920s.
  - 7speter 4y ago
    >worked well enough for this country for hundreds of years. If I remember my numbers from an economics course right, from 1776-1912, there were major runs on banks in the US an average of every 12 years. While the US didn't leave the gold standard until 1933, the fed, after it learned not to drastically raise interest rates quickly in 1929, has kept things pretty stable for almost a century.
  - imtringued 4y ago
    There was deflation pre WW1, then there was hyperinflation in Germany leading to Hitler's failed coup, finally there was deflation once again and Hitler got to power. These constant economic cycles just drive fear and populism and if people are desperate they also become more receptive of fascism. The way currencies are designed forces their inevitable collapse so why not keep the party going for as long as possible ala Keynes? You don't lose anything from building a better society and then resetting the money system Vs not doing anything and then resetting it.
- imtringued 4y ago
  There is this thing called Says Law and it basically postulates that if money is neutral, a market economy has a tendency to go towards full employment on its own. The fact that we have to mess with the currency to get a semblance of something that should happen automatically is pretty damning. I.e. even if you think Keynesian deficits are stupid the entire point of them is that doing them brings you closer to equilibrium than not doing them. If you just stop them without replacing them with something else e.g. debt jubilees, expiring money or negative interest rates then you basically get a worse economy for no benefit whatsoever.
phillipcarter 4y ago
> So we need no fake money and fake policies around it. I mean...not to be too reductionist, but this whoooole thing we're doing is all just calvinball with higher stakes and more serious people. I don't see "go back to the gold standard" as any less silly than what we do today.
credit_guy 4y ago
> Because that’s how democracy is supposed to work. > The proposed solution would be to go back to gold standard and Fed not have the power to seize it like Roosevelt did. Isn’t that a bit of a contradiction? Roosevelt, if I remember correctly, was democratically elected. A few times.
imtringued 4y ago
>The proposed solution would be to go back to gold standard That won't solve the inflation or deflation problem. It is a non solution and will result in an even worse economy where pointless unemployment problems persist. It also unfairly rewards people who disrupt the economy over those who keep it running while completely missing the goal of price stability. >So we need no fake money and fake policies around it. Yeah because distorting free markets with another form of bad money is a good thing.

rat87 4y ago

I'm pretty sure the gold standard is seen as a joke but the vast majority of economists. During the great depression countries who went off gold standard first recovered more quickly. Roosevelt did the right thing

mercy_dude 4y ago
The same economists who also thought inflation is transitory.
Grim-444 4y ago
I'm always confused at how there's such a seemingly large mismatch between on one hand people trivially dismissing the gold standard as a joke and on the other the fact that the gold standard seemingly worked well enough for this country for hundreds of years. It was the system that powered the country over the majority of its history, for the vast majority of its expansion and rise to power. But it's so obviously a joke of a system?
- deleted 4y ago
  [deleted]
- generj 4y ago
  It didn’t work well at all. We had frequent economic panics all through the 1800s and early 1900s. When the US rose to power (1930s to 1940s) gold was mostly not used in practice due to international traffic being mostly blocked (due to nationalist impulses during the Depression) or under heavy credit (during WW2). There’s a decent argument to be made gold caused the Great Depression or at least exacerbated it. The “gold standard” system that started under Breton Woods (1944-1971) was basically a polite fiction, and when someone called the fiction it died. A gold standard would be totally unworkable for today’s trade. It barely served the fledgling globalism of the 1920s.
- 7speter 4y ago
  >worked well enough for this country for hundreds of years. If I remember my numbers from an economics course right, from 1776-1912, there were major runs on banks in the US an average of every 12 years. While the US didn't leave the gold standard until 1933, the fed, after it learned not to drastically raise interest rates quickly in 1929, has kept things pretty stable for almost a century.
- imtringued 4y ago
  There was deflation pre WW1, then there was hyperinflation in Germany leading to Hitler's failed coup, finally there was deflation once again and Hitler got to power. These constant economic cycles just drive fear and populism and if people are desperate they also become more receptive of fascism. The way currencies are designed forces their inevitable collapse so why not keep the party going for as long as possible ala Keynes? You don't lose anything from building a better society and then resetting the money system Vs not doing anything and then resetting it.
imtringued 4y ago
There is this thing called Says Law and it basically postulates that if money is neutral, a market economy has a tendency to go towards full employment on its own. The fact that we have to mess with the currency to get a semblance of something that should happen automatically is pretty damning. I.e. even if you think Keynesian deficits are stupid the entire point of them is that doing them brings you closer to equilibrium than not doing them. If you just stop them without replacing them with something else e.g. debt jubilees, expiring money or negative interest rates then you basically get a worse economy for no benefit whatsoever.

phillipcarter 4y ago

> So we need no fake money and fake policies around it. I mean...not to be too reductionist, but this whoooole thing we're doing is all just calvinball with higher stakes and more serious people. I don't see "go back to the gold standard" as any less silly than what we do today.

credit_guy 4y ago

> Because that’s how democracy is supposed to work. > The proposed solution would be to go back to gold standard and Fed not have the power to seize it like Roosevelt did. Isn’t that a bit of a contradiction? Roosevelt, if I remember correctly, was democratically elected. A few times.

imtringued 4y ago

>The proposed solution would be to go back to gold standard That won't solve the inflation or deflation problem. It is a non solution and will result in an even worse economy where pointless unemployment problems persist. It also unfairly rewards people who disrupt the economy over those who keep it running while completely missing the goal of price stability. >So we need no fake money and fake policies around it. Yeah because distorting free markets with another form of bad money is a good thing.