In a dramatic speech on a Sunday night four decades ago, President Richard Nixon struck the final blow to the treasured link between the dollar and gold. In doing so, he made a few promises; he promised that taking America off the gold standard would avoid recessions. He promised it would bring high employment. He promised it would produce strong economic growth. He promised it would reduce our trade deficit. These promises, every one of them, have sadly been broken. It is clear today that Richard Nixon made a grave and costly misjudgment. Leaving the gold standard has led to catastrophic inflation, the instability of the dollar, and has also been holding back our economy. Therefore, we need to reverse the massive error of scrapping the gold standard and return our Dollar back to it.

First and frankly, the status of the dollar is deteriorating. It’s no longer being as competitive with other currencies- specifically the European Union. The U.S. dollar has been what the whole world has put its trust on. Sadly, that’s not the case anymore. The dollar is completely unstable, and the world is losing its trust in it, which, in turn, is hurting the power and influence in the world stage of the greatest nation; that is unacceptable. Returning to the gold standard will rightfully return the power back to our dollar, so that all countries, including ours, will continue to have confidence in it, and America will remain strong in the world market.

When most people think of Germany in the early 1920’s, they probably picture a person lugging around a wheelbarrow full of money- just enough to hopefully buy a loaf of bread for the month. Yes, inflation occurred in Germany, and they stopped it by backing it up with gold! The gold standard prevents excessive inflation because under the gold standard, the government can’t print out more money than it can back up with gold; and unlike fiat pieces of paper, gold always had, always has, and always will have value. Very modest inflation is indeed a good thing, but economists place that “ideal” inflation rate at just two percent annually. Since 1971, when President Nixon took America off the gold standard, average annual inflation rates have been at 3.2%, according to the Bureau of Labor Statistics- that’s 60% higher than economics refer to as “healthy!” There have even been four cases of the annual inflation rate exceeding 10%, topping off at 13.5% in 1980- or 575% more than the “healthy” 2% rate! What that does to our economy is saddening- with savings losing value and less investment due to uncertainty. A small benefit to our fiat system of currency is the ability of the government to, in times of economic downturn, print off more money to help stimulate the economy. Sadly, however, our government has proven time and again that it cannot be trusted with that privilege, and therefore, needs to be revoked of it. President Herbert Hoover said, “We have gold because we cannot trust our governments.” He could not have been more right.
In addition, scrapping the gold standard has really hindered our economy. Since Nixon killed the gold standard, America has experienced the three worst recessions since World War II. Also, after World War II, the unemployment rate averaged under 5% and didn’t rise above 8% once! Then, President Nixon took America off the gold standard, and since, the average unemployment rate has been over 6%, and it has even topped 8% countless times- just a few years ago in 2010 is a perfect example, when the unemployment rate was 9.6%! During the years after World War II, average economic growth was 4% a year! Since we scrapped the gold standard, it’s been under 3% a year. That means that every household would make almost twenty grand more a year if we continued to grow at that annual rate of 4%! Whether or not these have a direct correlation with scrapping the gold standard, it’s clear that the economy was much better off before we did so.

Finally, turning our backs on the gold standard is also turning our backs on morality, believe it or not. Most people have heard it countless times before: money is the root of evil. However, the honorable Thomas Paine brought it home in his 1786 work “Dissertations on Government, the Affairs of the Bank, and Paper Money.” In it, Mr. Paine eloquently argues that there is a set quantity of gold God has placed in this earth for us, with the expectation that, like nearly all prosperous civilizations for millennia, we will use it to base our currency off of. This is because paper is way too easy to produce, and therefore, becomes way too plentiful; money, Mr. Paine argues, should be something sacred, and therefore, shouldn’t be “sported with.” “Paper, considered as a material whereof to make money…is too plentiful, and too easily come at… Money, when considered as the fruit of many years’ industry, as the reward of labor, sweat and toil, as the widow’s dowry and children’s portion, and as the means of procuring the necessaries…of life, and making old age a scene of rest, has something in it sacred that is not to be sported with, or trusted to the airy bubble of paper currency.” Thomas Paine goes on to state that, because we humans cannot control the quantity of gold in this Earth, our money becomes dependent on God. This is a stark contrast to using paper money as our sole currency, as we can just endlessly print off more and more, turning farther and farther away from God and becoming increasingly focused only on our worldly desires. To conclude this paragraph, a quote from a speech to the Constitutional Convention delivered by Benjamin Franklin in 1787 will be appropriate: “If a sparrow cannot fall to the ground without His (God’s) notice, is it probable that an empire can rise without His aid?”
President Richard Nixon made a big mistake- and that’s alright, as long as we catch the mistake and put our country back onto the right track again. Leaving the gold standard has been an experiment, and like all failed experiments, we need to evaluate the outcome and retrace our steps. This experiment has been a very costly one indeed, contributing to out-of-control inflation, social unease, the decreasing of confidence in our beloved dollar, and decreased morality. However, there is great hope; if we just return our dollar back to the gold standard it deserves, we will be a much better and more powerful country again, and our most prosperous days will truly lie ahead of us.

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