**No True Scotsman. **The USA was on the Gold standard 1776 thru 1933.
And of course China, Australia, South Africa and Russia would control the Worlds economy.
If you are unwilling to examine the nuances of monetary policy beyond a comical GOLD/NOT GOLD dichotomy, why are you even posting in a thread like this? There were numerous monetary schemes in the period you are talking about.
No, not No True Scotsman, One True Scotsman, specifically the Scotsman between 1879-1913
Wrong. I quoted and refuted one specific sentence in your post. And it wasn’t a “canned” attack — I’ve nothing better to do than think and type from scratch! 
I used the teachings of Milton Friedman to discuss the Great Depression, since that economist is widely respected on both the “left” and the “right.” I’m sorry if he’s not respected in outer space … or Alabama.
Rather than “slicing and dicing” your paragraph, I excerpted a single brief phrase: “even Milton Friedman.” I did this because I had two specific questions about it:
(1) Why did you write “even,” and (2) is “even” an adverb? :rolleyes:
You have been continually disrespectful of me. To make amends, why don’t you expound on the strange idea you’ve dangled:
Anyone with a shred of impartiality can see what you did. I indulge you on occasion but my patience has worn thin. It’s enough to sift through all of the masturbatory claptrap, I don’t feel it necessary to tolerate the blatant rhetorical tricks.
:rolleyes::rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:
Cherry pick a small period, say 30 years and you can show nearly anything. :dubious:
septimus, WillFarnaby
Both of you are getting overly personal. Knock it off or bad things can happen.
my bolding:
So the pre-Fed gold standard would be 1879-1913, and the post-Fed gold standard would be 1913-1933.
septimus,
I gotta admit, snipping two part of a quote like you did up there looks like you’re attempting to change the content - or impart your own spin on it - of another posters post. Such could be potentially actionable and I’d prefer you find some other way to achieve your debate goals.
And again, both of you calm the hell down.
My idea was incorrect. It would seem that what I was thinking about was the use of Silver Certificates. United States Notes were still in use, and were, as you pointed out, since the civil war.
I agree with you. However, if the US would put laws in place (like balancing the budget, and not printing money to solve every problem), could it work? Or is it impossible to legislate discipline WRT money?
Can you explain a couple of things?
-
why is deflation necessarily bad? If my money in the bank can buy MORE of something, I don’t see the problem.
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why is a certain degree of inflation good? Wouldn’t a steady exchange rate (i.e. No inflation or deflation) be the best possible scenario? If a dollar bought a gallon of milk 50 years ago, and bought a gallon of milk today, how would that be bad exactly?
Seems to me that inflation is designed to increase prices indefinitely, eroding the real purchasing power of the money used over time.
It hurts investment. Why invest, when my money is becoming “more valuable” by itself.
It discourages spending. Why buy a car today, when it will cost me less tomorrow. Thus it slows the economy.
It isn’t sustainable (obviously!) It’s making something for nothing, which, ultimately, has to be paid for somewhere, by someone.
Inflation isn’t fun either, but at least (sigh) it’s “natural.”
Look at it from the bank’s standpoint. If it has to pay you more, in real terms, than you deposited, it has no incentive to accept your deposit! And you certainly won’t want to borrow, if you’ll need to repay with more valuable dollars. Long-term commitments may be harder to make. I might agree to pay you $10/hour, but not if I’m contracted to pay that for a year and the amount will increase in real terms.
See? Deflation will impede the whole cycle of finance. Once you accept that deflation is bad, it should be easy to imagine that slight inflation, e.g. 2%, is better than no inflation — for one thing, it leaves a margin for error, since you don’t want deflation.
But it is important to keep in mind that money value, i.e. price levels, is primarily just an accounting device. 10% inflation doesn’t make everyone 10% poorer; 10% deflation doesn’t make everyone 10% richer. Yes, some people will win or lose when price levels change, but for the beginner’s big picture of the whole economy, these should be treated as secondary.
Not just banks. Anyone getting a loan suffers from deflation (and banks are getting a loan from depositors) since you pay back with valuable money. That’s how the old widow lost the farm in the late 19th century.
High inflation is bad because prices go up faster than incomes, which suppresses purchasing. Lower inflation encourages investments because while prices don’t get ahead of income, there is still an incentive to buy now before prices rise.
Anyone who went through the early '80s knows this stuff pretty well.
Deflation was pervasive during the Second Industrial Revolution in the United States. This has been shown to be one of the greatest periods of economic growth in US history. Milton Friedman agreed with this and he was an advocate for inflation.
This inconvenient fact is why inflation advocates, who place a premium on empirical analysis in other economic discussions, always retreat to theory when deflation is discussed. Now that it has been shown that the historical case against deflation is very weak, let’s take a look at their theories.
They will say that if deflation is projected nobody will borrow because they are paying back their loan with dollars worth more. Ok, so if inflation is projected, nobody will lend because they will receive payments with dollars worth less. Is either the case? No, of course projected inflation/deflation can be accounted for in the interest rate.
There is a lot of confusion around deflation. One cliche says that if prices are falling nobody will buy anything. Firstly, is that the case with iPhones, TVs, and computers? No. There is a value attached to having a good now instead of then. Inflation advocates suggest that if I’m hungry and the price of steak is falling, I’ll wait until near death before at last I reach out for the steak with my dying breath. This is absurd.
The deflation fear stems from more foundational misunderstandings about the economy. Inflation advocates believe as Keynes did that increased consumption makes the economy grow. In reality, capital investment and the division of labor grows the economy. You cannot increase consumption without it being preceded by an increase in production.
Was there a causal relationship?
A real interest rate of 5% is achieved with 10% inflation by setting the nominal interest rate to 15%. How do you achieve a real rate of 5% when there is 10% deflation?