Questions about RP's monetary policy

[coplinger]

I posted this thread (link) in the General politics forum yesterday & I thought I'd post a follow-up question here since this forum is much more active.

What exactly is Ron Paul's plan for sound money. I have heard both that he plans to back the dollar with gold, and that he plans to introduce a sound currency to compete with the dollar. Which is correct?

If it's the latter, how will this money then be spent into the economy? Will we be able to trade in dollars for it? Will there be low or no interest government loans to compete with fractional reserve banking?

I'm curious how this transition will work.

The original thread was about how sound money & free markets would effect wealth distribution. Please comment there as well if you have some knowledge of that.

 

[theblatanttruth]

I think it's more of a focus of not printing money when we have shortfal in government spending. Which, by the way, they have been printing more money than can be backed especially as of recently because of the huge deficits --- just like russia did. Anyone remember how all that turned out for russia?

 

[jd603]

He spent many years as an economist so I'm guessing he can elaborate on this further. This is one area the other candidates could never debate him on without them looking ignorant.


He said he doesn't support going back to the old "gold standard" as some say, but a variation of it. I'd be curious to hear more too.

 

[Gee]

He's said he wants to legalize gold and siver (backed bank notes or coins, I'd imagine) as legal tender, and allow it to compete with federal reserve notes.

 

[coplinger]

OK, so you create a gold & silver backed currency. Right now most of the gold & silver are held by a very small percentage of people. How does enough of this gold & silver backed currency make it into the economy to be competitive with the dollar.

How much gold & silver do you have? How long would it take to spend it?

 

[Gee]

OK, so you create a gold & silver backed currency. Right now most of the gold & silver are held by a very small percentage of people. How does enough of this gold & silver backed currency make it into the economy to be competitive with the dollar.

It would have to be prefered over the fiat dollar, then people would slowly start converting their Fed notes to it if they wanted to. It would take a while, but it SHOULD take a while. Suddenly switching would be disasterous.

 

[Bryan]

What exactly is Ron Paul's plan for sound money.

Actually these are questions for the "Issues" forum- and this question has been asked there:

What is Dr. Paul's plan to move to sound money?
http://www.ronpaulforums.com/showthread.php?t=114

 

[coplinger]

Doh!, I forgot about that one. That was MY post, too-my first one at this forum. I haven't been to that issues forum since. I guess I should read the replies to my own posts before posting again.:o

 

[coplinger]

OK, I read the rest of that thread and it still didn't really go into any detail about what Ron Paul's plan is & how it would work. Most of the discussion was a debate on Fed vs. no Fed & fiat vs. gold-backed currency. I didn't have very much economics in school & a lot of that thread was economic theory that is over my head. I guess I'm just looking for some more practical answers rather than economic theory.

 

[Bradley in DC]

He spent many years as an economist so I'm guessing he can elaborate on this further. This is one area the other candidates could never debate him on without them looking ignorant.


He said he doesn't support going back to the old "gold standard" as some say, but a variation of it. I'd be curious to hear more too.

Dr. Paul is a medical doctor who is just well read in the Austrian school of economics.

 

[Bradley in DC]

He's said he wants to legalize gold and siver (backed bank notes or coins, I'd imagine) as legal tender, and allow it to compete with federal reserve notes.

They were relegalized in the late 1970s (in part because of Dr. Paul's advocacy then). There are other government restrictions limiting currency competition (Civil War era taxes, etc.).

 

[wwycher]

I think I heard Dr. Paul say he would allow competition as far as money went by allowing gold and silver to be used as money, to start off with.
I have been noticing how he talks about all the change he's proposing, by noting that he would do it gradually. Allow the private market to compete with government and we will do it better every time.

 

[angrydragon]

He doesn't want to get rid of the FED or anything like that overnight, that would be chaotic and dumb. Ron wants to legalize gold and silver as legal tender. This way the Fed doesn't have the monopoly on money.

 

[angrydragon]

http://video.google.com/videoplay?docid=-7497009651976207590 watch this video.

 

[Shmuel Spade]

Advocating a repeal of the legal tender laws would be a primary. With those gone people could really make contracts in any format they mutually agree too. The justice system wouldn't force any party in arbitration to accept federal reserve notes. People would be able to pay their taxes in gold (or silver). Courts couldn't call a gold contract an example of "usurious interest rates" when inflation drives down the value of federal reserve notes.

Capital gains taxes would be removed from people who make a profit in investing in precious metals. Sales taxes could be eliminated on the purchase and sale of precious metals (think about the idea of paying sales tax on FRNs). The government could use its power to mint coin to produce coins of precious metals to compete with the FRNs.

Many things could be done to begin, we just have to have the will and understanding to achieve the goal.