New bill introduced to bring the U.S. back to the gold standard to control gov't spending and inflation
(Kitco News) - One American politician proposes bringing stability back to the U.S. economy and its currency by introducing a new gold standard.
Last week, U.S. House Representative Alex Mooney (R-WV) introduced the Gold Standard Restoration Act. The bill looks to peg the U.S. dollar to gold to address the growing inflation threat, massive deficit spending and instability within the U.S. monetary system.
"The gold standard would protect against Washington's irresponsible spending habits and the creation of money out of thin air," said Rep. Mooney in a statement.
"Prices would be shaped by economics rather than the instincts of bureaucrats. No longer would our economy be at the mercy of the Federal Reserve and reckless Washington spenders," Mooney added.
The bill noted that the dollar, referred to as the Federal Reserve note, has lost more than 30% of its purchasing power since 2000. At the same time, the U.S. has lost 97% of its purchasing power since the Federal Reserve Act was passed by congress in 1913.
The proposed legislation would require the Federal Reserve and the U.S. Treasury to disclose all records pertaining to the government's gold reserves and gold-related transactions over the last 60 years.
The legislation is supported by the Sound Money Defense League, a national organization dedicated to making precious metals recognized money in the U.S. The League has helped state politicians push through legislation to remove sales tax on silver and gold bullion, paving the way for precious metals to be recognized as hard currencies.
"Today's debt-based fiat-money system serves primarily to support big government and wealthy financial insiders - while the Federal Reserve's serial policy of currency debasement punishes savers and wage earners as it undermines the economy," explained Stefan Gleason, President of the Sound Money Defense League, in a statement.
"A return to gold redeemability would arrest the problem of inflation, restrain the growth of wasteful and inefficient government, and kick off an exciting new era of American prosperity," Gleason added.
Although the proposed legislation has some grassroots support, some political analysts see it as a long shot. Federal Reserve Chair Jerome Powell has actively opposed the idea of a gold standard.
"If you assigned us to stabilize the dollar price of gold, monetary policy could do that, but other things would fluctuate," Powell said in 2019 during his semi-annual testimony before congress. "This is why every country in the world abandoned the gold standard some decades ago."
Mooney's gold standard bill comes more than 50 years after President Richard Nixon decoupled the U.S. dollar from the gold standard.
Analysts have said there is no significant political will to reintroduce a new gold standard as it would create substantial economic problems.
"A gold standard would effectively put us in a permanently restrictive credit, deflationary environment. It would be a huge limitation," said John Reade, chief gold strategist at the World Gold Council, in an interview with Kitco News last year, talking about the 50th anniversary of Nixon closing the gold window.