Forbes returns to his golden argument

Gold standard standard-bearer Steve Forbes describes in the latest Forbes magazine how a return to a currency backed by gold would limit government’s money-destroying economic meddling.

Despite thousands of years of experience to the contrary, central bankers and countless policymakers and economists believe that money manipulation can stimulate and wisely guide an economy.

It’s a destructive delusion. The world today would be an immensely richer place were it not for these hu bristic notions that a handful of people can keep an economy rolling smoothly with minimal unemployment.

John Maynard Keynes was the chief promoter of the illusion that economists could wave a magic wand via monetary and fiscal policies and all would be well. This fantasy is at the center of our economic woes today, which will be taking a turn for the worse later this year and in early 2013.

Ben Bernanke is engaged in Soviet-style credit allocation. By keeping interest rates low, he makes it easy for the federal government to massively expand its power through gigantic increases in spending. The Federal Reserve buys most of the government debt, and the interest Uncle Sam pays on it is de minimis . Call it “deficits without tears.”

The resources government devours mean fewer resources for the private sector. Ominously, the U.S. is now in the process of destroying wealth instead of creating it, as small and medium-size businesses have major difficultly in securing a reliable flow of credit.

What the Fed is doing is a form of Big Government coercion.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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