Should the United States Return to a Gold Standard?
Prior to 1971, the United States was on various forms of a gold standard where the value of the dollar was backed by gold reserves and paper money could be redeemed for gold upon demand. Since 1971, the United States dollar has been a fiat currency backed by the “full faith and credit” of the government and not backed by, valued in, or convertible into gold.
ProCon.org debuts its brand new issue website, gold-standard.procon.org, and delves into the pros and cons of whether or not the United States should return to a gold standard.
Proponents of the gold standard, including Congressman Ron Paul (R-TX) and Steve Forbes, Editor-in-Chief of Forbes magazine, argue it provides long-term economic stability and growth, prevents inflation, and would reduce the excessive size of government. They say a gold standard would restrict the government’s ability to print money at will, run up large deficits, and increase the national debt. They say the economy has historically performed best under a gold standard.
Opponents of the gold standard, including Nobel Prize-winning economist Paul Krugman and Federal Reserve Chairman Ben Bernanke, argue a gold standard would create economic instability, spur periodic economic deflation and contraction, and hamper government’s ability to stimulate the economy during recessions and financial crises. They say economists agree that the gold standard is a bad idea that has historically caused problems for the US economy.
In addition to in-depth research on the pros and cons of returning to a gold standard, the new ProCon.org website contains a historical background section, videos, images, over 100 footnotes and sources, and Did You Know? facts including: