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I misspoke when I said he supports the gold standard. What I should have said was he’s probably not against it now (like the other posters in this thread), and at one time was for it.
According to
these 2005 transcripts Greenspan says to Ron Paul there would be no advantage changing to the gold standard. His reason is that we have pseudo-goldstandard with our current fiat system. That we learned the mistakes from the past and we won’t make them again. I think this is a fallacy.
It is common sense that humans make mistakes. Nobody is perfect. And we were lucky that we had someone like Greenspan with his knowledge in world economics and his moral values in charge of the economy; someone who would not make many mistakes. However, history shows that eventually someone will make a big mistake or someone power hungry will get in control of the system and they will screw it up. We should not let the minority have control of the majority, especially when they conduct business in private.
With regards to Greenspan’s statement on the international committee, he was just stating history. I agree with Ron Paul in the videos I posted that we don’t need the help of the international community in order to adopt the gold standard. We don’t need another Brenton Woods agreement. If we switch to a real “modern” gold standard and it works well for us, the international community will want to imitate us. As Ron Paul said, “We led them away from the gold standard, we can lead them back to it.”
However the comment that a fiat money system better supports a welfare state… The reason that it does is because it hides the fact that a welfare state is expensive. A fiat money system basically deceives people that social programs like “Universal Heathcare” are free. They are not. And a fiat money system hides the cost because when there’s a deficit (and we haven’t had a balanced budget in decades), they just print more money causing an “inflation tax”. That’s why the dollar is weakening.
If we had a gold standard, the average American would wake up that these social programs are not cheap, and in fact are worse than a free market. The FED would no longer be able to print the money when there is a deficit. The government would have to result to raising taxes or borrowing money. And they can only borrow so much before people stop letting them do it. We would then move away from Socialism and move back toward a Republic with a free market.
-Caeddyn
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WTF are you talking about? The vast majority of people don't have a clue re gold vs fiat money. A dollar is a dollar, and a dollar for welfare is a dollar for welfare. There is no deception.
You praise Greenspan immediately after calling what he said a fallacy. People can be counted on to make mistakes in policy, much more rarely mistakes in execution. The Fed has learned by trial and error, the only thing that actually has any meaning in economics, everything else is just thought experiments.
For there to be future errors in policy there would have to be an unrecognized sea change in the economic enivronment, extremel unlikely given the volume of data available.