Monetary Policy

Overview

Money should be directly linked to redeemable value.  The free market can best decide what can be used for currency and has true value.  As long as the government maintains a monopoly over money, that currency must be backed by resources with actual material value.  The Gold Standard should be reinstated.  We should abolish the Federal Reserve.

If money and currency is tied to material resources, the government should not be allowed to manipulate the supply of money in order to “generate” the income necessary to expand government programs.  In this way, government must adhere to a strict budget and not enact programs they do not already have the money for.  

Opinions

Of all taxes, the most insidious is the inflation tax.  The inflation tax results from the Federal Reserve, in conjunction with the Treasury, artificially increasing the money supply and devaluing our dollar.  The inflation tax is hidden. Because its effects are most strongly felt by those at the bottom of the economic ladder, the Federal Reserve is also the engine of the welfare state for it enables politicians to engage in deficit spending with the knowledge that the Federal Reserve will monetize Treasury debt.  Ending the Fed and returning to a free-market in money should be a top priority for the freedom movement. 

Congressman Ron Paul, (R-TX)

Monetary policy should be determined by Congress and the issuance of money should be strictly regulated with direct congressional oversight.  The use of the money supply as a means of generating spending capital for the government should be strictly prohibited and all money issued should have a clear and redeemable value.

Dave Nalle, Republican Liberty Caucus

The market decides what money is.  There should be zero state involvement.

Doug Casey, Casey Research

No central banks and no stabilization policy.

Jeffrey Miron, Harvard University

Monetary instrument (including currency) should be free and private.  Central banks should be abolished and private monies should be legalized.  Government deficit spending and debt should be ended.

David Theroux, The Independent Institue

The true Gold Standard was one of the best institutions that the Constitution implied. 

Deficit spending for more than a short period is simply bad fiscal policy, but it makes possible the unlimited expansion of government.  Fiscal Policy should adopt a Red Line spending budget.  The Red Line would be the total amount of taxes the government received in the previous year.  That sum should be the maximum amount permitted for spending in the present year.  This total would be fixed, and the legislature would then have to tailor all spending items into the total. 

If any government sectors then went “over-budget” they would simply not have any money for that program and it would simply stop. 

Richard Timberlake, University of Georgia

There is no role for a Federal Reserve.  A system of private clearing houses and deposit insurance offers the finest protection and competition for safety against ruinous depressions and inflation. 

David Littmann, Mackinac Center for Public Policy

Abolish the Fed. Restore market forces over the production and distribution of money. Government has no more ability to decide what the proper supply of money and credit should be than it knows what the proper supply of green beans ought to be. When it takes over money, it only depreciates and manipulates it for its own benefit at the expense of everyone else.

Lawrence W. Reed, Foundation for Economic Education