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Originally Posted by The_Dunedan
So, lemme get this straight...you just admitted that a precious-metal standard would prevent the US from entering its' disastrous current situation with China; ie a massive trade deficit. How is this a bad thing?
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No, I just said that if the dollar were linked to a precious metal, you'd be out of cash.
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Originally Posted by The_Dunedan
As for preventing inflation, the US Gov't (through which the banks comprising the Federal Reserve act) is actively inflating the currency in order to have enough money (in raw, dollar-amount terms) to make payments on our National Debt and attempt to pay for, among other things, a welfare state and a hugely expensive military.
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So, now the US government *is* controlling the money supply, instead of the privately-owned federal reserve?
FYI, the "hugely expensive military" takes up some 4% of the US GDP. That's not much higher than European countries, and lower than many other countries. Your welfare state gets pretty little cash, compared to European states. In absolute terms, it's a lot of money, but compared to the size of your economy (and potentially your tax income) the percentages are average, or lower than average.
Besides inflating the currency, another option to pay for things would be to increase taxes, just like they do in other countries. But I doubt anyone would get elected if they had such a message. I can see that there are a lot of problems with the US economy at the moment, but I don't think there's a quick fix.
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Originally Posted by The_Dunedan
Compared to the buying power of $1 in 1906, the Federal Reserve Dollar is worth about six cents.
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And you have way more dollars to spend than you had in 1906. A quick google gave me <a href="http://www.chipublib.org/004chicago/1900/fam.html"> this link</A> showing the average income in 1900. People were earning 600 to 700 dollars a year in Chicago. <a href="http://en.wikipedia.org/wiki/Household_income_in_the_United_States">Wikipedia</a> says that the average (mean) income was over 60000 dollars a year in 2004.
So, your dollar was worth 16 or 17 times more in 1906, while you get almost 100 times as many dollars today. Hardly bad news.