“If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.” – William Jennings Bryan
I don’t get the sense that many young people read this blog, but if you are a young person you need to hurry up and get radicalized on the issue of money politics.
The main “radical” message you’ve probably been hearing on monetary policy is from the Ron Paul people, arguing for a gold standard. If you are a relatively young, working-age person, this idea is fucking evil. It is a bazooka pointed straight at the heart of your lifetime earnings potential. Any debts you have – which, if you are a typical Millenial, are probably enormous – would be extremely hard to pay off under a gold standard.
This is because most debts are in nominal terms. If the value of the dollar goes down, and your nominal wages go up, the value of your debt goes down. Inflation is good for debtors, and bad for creditors.
But because inflation is bad for certain kinds of old people on fixed incomes, politicians tend to favor tight money (which hurts you) over loose money (which helps you.)
As the US population ages, inflation is going to become more unpopular, even as the older generation relies on us to pay for their entitlements. Not only are we going to have to pay more in taxes to cover their benefits, we are also likely to be hurt by their hard money politics.
It is critical that you understand the political trade-off here so that you can help pressure Presidential candidates and Senators to confirm loose money advocates to the Federal Reserve Open Markets Committee.
Here is a good primer on the topic.