In a campaign replete with inane ideas, Ted’s support for the gold standard may well win first prize. It is a bogus solution to a non-existent problem, for the following reasons:
- The ostensible reasons to use gold are to strengthen the dollar and prevent inflation. The dollar is extremely strong right now, and inflation is below the Fed’s 2% target.
- If you are really concerned about the dollar and inflation, you just raise interest rates. Relying on the gold standard essentially means that interest rates and the money supply are dictated by random events, not by the needs of the economy.
- There is no basis in American history for the conclusion that economic growth was more stable under the gold standard than under the current regime.