On Congress — Is THIS the Best We Can Do?
Look, I’m pissed off about Congress like everyone else. But even if the value of our currency would remain intact regardless of the stupidity in Washington, how does that help make our country a better place to live?
Debt and monetary policy are but one concern voters should have. It is imperative that we staff Congress with men and women who understand not just the importance of fiscal responsibility, but of building a better nation at the same time. This involves difficult choices about the burden of taxes, how we should invest that revenue and what areas matter to us most in regards to the quality of our lives as Americans.
Even if we could impose some kind of rigid spending requirements, the bottom line is that legislators still would be as corrupt as ever and funnel money to special interests if the voting public does not hold them accountable.
It’s tempting to impose some kind of fail-safe on Congress so our leaders will do their job in regards to spending and keep deficits under control. But deficits are symptomatic of a failure of leadership among our elected officials, and it’s about time voters fix the main problem by putting some adults in charge.
In short: Even if you “fix” deficits, you haven’t fixed the corrupt spending and pandering that goes on in Congress. I would argue that one without the other doesn’t matter much.
On Not Bartering — It Has to Be Bartering to Work
The idea of gold coins as the only acceptable currency is just not happening in an age when people buy products from China with their PayPal account. Global commerce would simply become too inefficient.
That’s why most gold-standard advocates are practical in their desire for currency that is simply based on gold, not gold itself. The main difference is that the currency could be redeemed for gold whenever the currency holder chooses.
Also, many advocates are pushing a “denationalization of money” that involves private coinage and currency competing with government-issued money. The idea would be that as long as you can get $1 worth of gold for a $1 note, it doesn’t matter whether Uncle Sam or private citizen Sam Smith is making the trade.
But this topples the very argument that gold is the only way to go because it is proven and solid in a world of intangible value. How can you be sure that Sam Smith actually has the gold to back his currency? How can you be sure that the gold you get is real gold and not full of impurities when you get it? How can you be sure that in a time of crisis, when people race to convert their notes to physical gold, that anyone — government worker or private banker — will be willing to turn over that gold even if they have it?
In short, the idea of a gold-based paper currency is just as “fragile” as a fiat currency created by the Fed. And since physical gold for everything is a practical impossibility, I don’t see how the gold standard can hold onto any of its arguments about the “real” value of this option when it is just a piece of paper as well.
Agree or Disagree? Speak Out Below, Please!
This article admittedly is way too long, but I felt the need to be exhaustive after a previous column attracted some criticism for not making any sense. The trouble with writing daily on InvestorPlace.com is I sometimes naively assume that everyone is familiar with my past writing and is reading all of the outside articles I am.
To that end, I would appreciate any comments or criticism on these points as a way to make this article as complete as possible. I tried to faithfully represent the gold standard advocates as best I could without warping their position, so I welcome any feedback on these or other points.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.