Gold

Accepted. I hope this is a fun debate. Below are the reasons to not return to the gold standard. 1. The gold standard would constrain economic growth. The rate of economic growth would have to keep up with gold mining under a gold standard. When an economy's productive capacity grows, so should its money supply. Since the money supply is contingent on the amount of gold, there should be a steady rate of gold mining. The scarcity of the metal would constrain economic growth, causing prices to fall (1). Gold stocks rising faster than the rate of economic growth would cause hyperinflation, and slower rising gold stocks would cause deflation. The impacts of these are catastrophic. Deflation causes economic stagnation and a rise in unemployment. It also increases the value of debt and may aggravate recessions (2). Rise in prices (i.e. inflation) can cause hoarding, social unrest, and can hurt economic supply (2). 2. Transition to the gold standard would be impractical. The proposition doesn't establish how he would implement the gold standard in the United States. The amount of gold extracted till now today equals about $8.5 trillion. In the United States, 4.26% of the total gold is stored as reserve. The US money supply is at about 11 trillion dollars (3). This means transitioning to gold is impractical, outside of two solutions: (a) reducing money supply, or (b) increasing gold stock. The first would cause deflation, and the latter would be extremely costly to implement. - Now, onto the rebuttals. 1. In the 1700s, "standard weights and measures" may have meant gold. It doesn't mean that now. All of Pro's examples presume that Constitutional originalism is to be followed. It's up to anyone's interpretation to understand what the Founding Fathers meant when they drafted the Constitution. But the status quo is built according to the Constitution. While Pro's interpretation might be against, the status quo is what the Constitution says. The status quo is made for that. For order's sake, there has to be a "final" interpretation of the Constitution. The Supreme Court is the final interpreter of the Constitution. The Supreme Court should be considered infallible in interpretation for the sake of order. Otherwise there would be multiple disputes. The purpose of the Supreme Court is to interpret the Constitution -- it is infallible because it is final. And the Supreme Court has ruled thrice in favor of the fiat money system: Knox v. Lee, Parker v. Davis, and Juillard v. Greenman. To ensure no anarchy, prefer the Supreme Court's interpretation of the Constitution to Pro's. 2. All examples against the fiat money system that Pro presents are past examples entirely independent of the United States. The scenario is different now. The fiat money system can moderate recessions and prevents total money collapse (4). None of Pro's examples proves their point. 3. Turn this argument against Pro. Money supply will reduce under a gold standard, since the money supply is greater than gold stock (3). - The resolution is negated. - (1) http://www.j-bradford-delong.net... (2) Hummel, Jeffrey Rogers. "Death and Taxes, Including Inflation: the Public versus Economists" (Jan 2007). (3) http://www.federalreserve.gov... (4) http://www.nber.org...