Originally posted by: Evan Lieb
Originally posted by: bamacre
Evan, you make some good points, and argue better than others.
We'll have to agree to disagree here, because you're correct, I am arguing things that I can't show statistically. I'm glad you seemingly admire Paul for his non-economic stances. However because of his stances on those issues, his anti-state mentality, you can understand where he comes from economically. Even if a fiat system
can work, and obviously it can in the short term, it just as well can be abused, at the peoples' peril. I'm sure you don't need examples of this.
I agree it can be abused, but IMO (and that stats back this up) the fiat system can be abused in a way that leads to more booms than busts, providing net increases in standards of living and wealth that exceeds the potential of fixed exchange rate gold-backed U.S. dollars.
Originally posted by: Mavtek3100
I'm sorry I just have to say I completely disagree with this statement. Ron Paul has consistently voted NO on almost all government spending. That's an excellent position if you ask me. The Government needs to realize it's limits, at least Paul stands up and says stop the madness most of the time. As far as his correlation to supply versus value or inflation he's mostly correct. Without severe intervention or forced valuation, increasing the supply of money will deflate it's value. Although we must remember how a country such as ours and one such as Rome artificially inflates the value of their currency.
I don't consider gov't spending to be economic policy per se, though if you were to characterize it that way I wouldn't hold it against you. His stance on gov't spending is wonderful in many ways, but also terribly unrealistic in even more ways. He wants the literal abolishment of the IRS, CIA, Fed, etc., just totally insane stuff that couldn't ever possibly happen. He provides no sound argument for how that would be accomplished and over how long a time period it would need to happen to be accomplished. He's not a pragmatist, he's a principled ideologue.
Also, with regards to money supply increases, Paul is only partially correct. He consistently fails to note that we could perpetually increase the money supply and see
deflation if the amount and frequency with which cash is spent/transacted (termed "velocity" in economics) were to increase at a proportionally higher rate. We let in 2 million legal immigrants every year, and hundreds of thousands of illegals, and that has the effect of balancing a lot of the Treasury's printing press increases. Not to mention foreign arbitrage of our dollars and the standardization of our dollar globally has the effect of keeping inflation extremely low. Notice that inflation has been remarkably consistent since the early 1980's, in fact it has been totally under control for a quarter century (consistently under 4% or something). That shows remarkable stability and engenders trust in the worthwhileness of our dollars. That is something that was
never the case under Bretton Woods, which was being abused by the time the early 70's rolled around.