More and more experts here in the U.S. are also suggesting a rule-based monetary system and investment in gold. Many expert say the problem with today’s dollar is that it is fiat money. A fiat currency — a currency that is used as a means of exchange but has no objective value — is not protected from poor monetary policy or potential economic downturns.
On Sept. 19, Rep. Kevin Brady (R-Texas), ranking member of the Joint Economic Committee, said there is increased support for the Sound Dollar Act, a bill proposed in March that would lead the U.S. economy toward a rule-based monetary system. On Sept. 21, the House Financial Services Subcommittee on Domestic Monetary Policy and Technology questioned the Fed’s manipulation of interest rates and its distorting influence on the economy.
Financier, philanthropist, and former Reagan Gold Commissioner Lewis Lehrman told the panel that a modernized gold standard, coupled with stable exchange rates, could lead to 4 percent American economic growth in the long run. That’s far superior to the 1.6 average annual real gross domestic product growth we have experienced in the past 10 years.
So let us not sit back while China and Germany explore creative avenues to economic growth and sound money. Restoring the definition of the dollar as a fixed weight of gold could be the key to attracting more foreign investment to the United States, importing jobs and economic vibrancy to “grow” our economy. Let’s act before China takes the lead in sound monetary policy.
Frank Cannon is president of the American Principles Project. Giavana Coluccio is a policy analyst with the group.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.