Up until now, Rep. Ron Paul has been one of the most vocal proponents to return the US to the gold standard. It's an idea that's been panned for decades, but Paul indulges in more than one John Birch conspiracy theory. In 1933, FDR took a page from Great Britain's book and removed the US off the gold standard after Americans began hording it during the Depression, crippling our banking system.
On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable.Soon after taking office in March 1933, Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy. He also forbade banks to pay out gold or to export it. According to Keynesian economic theory, one of the best ways to fight off an economic downturn is to inflate the money supply. And increasing the amount of gold held by the Federal Reserve would in turn increase its power to inflate the money supply. Facing similar pressures, Britain had dropped the gold standard in 1931, and Roosevelt had taken note.
The gold standard has returned to mainstream U.S. politics for the first time in 30 years, with a “gold commission” set to become part of official Republican party policy.
Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar and gold.The move shows how five years of easy monetary policy — and the efforts of congressman Ron Paul — have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate.
Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the platform committee, said the issues were not adopted merely to placate Paul and the delegates that he picked up during his campaign for the party’s nomination.“These were adopted because they are things that Republicans agree on,” Blackburn told the Financial Times. “The House recently passed a bill on this, and this is something that we think needs to be done.” The proposal is reminiscent of the Gold Commission created by former president Ronald Reagan in 1981, 10 years after Richard Nixon broke the link between gold and the dollar during the 1971 oil crisis. That commission ultimately supported the status quo.
I know you're probably laughing out loud from reading about the GOP's latest move to turn America into a laughing stock around the world, but this has been in the works for eighty years.
As it happens, conservative anti-government crusaders have often taken up the question of what to do about government.The utopian dream is to wreck it, an impossible goal that is nevertheless the frequent object of conservative reverie. “The mystery of government is not how Washington works,” writes the humorist P. J. O’Rourke, “but how to make it stop.” There are silver-bullet theories for destroying the state: repeal the amendment that allowed for the income tax; bring back the gold standard and thus break the state’s power over money; or— most ingeniously— interpret the eminent domain clause of the Constitution so as to invalidate almost the entire body of government regulation enacted in the twentieth century.
Every now and then conservatives give it a try. “By the time we finish this poker game, there may not be a federal government left, which would suit me just fine,” boasted Tom DeLay, the spiritual leader of the Republican Congress elected in 1994. Before long DeLay and his colleagues had parlayed a budget disagreement with President Clinton into a full-blown government shutdown, which some of them celebrated as a sweet taste of things to come, an overwhelming demonstration of their supreme ideological point. 14 Unfortunately, the shutdown turned out to be a monumental political blunder that led ultimately to Bill Clinton’s reelection.
Frank, Thomas (2010-04-01). The Wrecking Crew: How Conservatives Rule (p. 39).
The gold standard has been a fetish for conservatives, conspiracy nuts and right wing Republicans since FDR took action against it. They hated everything the New Deal ushered in and have been trying ever since to repeal the ingenious work that saved our country from ruin. That's why an anti-government movement began in the first place. The scary thing is that they just might succeed. The New Deal was so successful that it put the Republican Party in the minority for decades. Now in 2012, they have finally added returning to the gold standard to their party platform. It's another calculated move by conservative activists to further push America off the cliff. To the Villagers, Republicans can never go 'right' far enough as we all know and which is why they've gotten away with it for so long.
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