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View Diary: 17 Year Old Girl's Response to the Republican Response (Updated) (199 comments)

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  •  It's a lot harder to do Ron Paul justice. (1+ / 0-)
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    suz in seattle

    He says a lot of things that seem crazy at first, but analyzed from the right starting points are quite logical.

    Like the whole gold standard thing.  Fiat currency is ALWAYS ALWAYS ALWAYS debased.  Some inflation is caused by the Federal Reserve simply printing more dollars.  The most rational corollary to what Ron Paul says is that "inflation adjusted prices are the only ones that matter".

    And in fact there's a good academic case to be made for that.  For instance, the high point on the Dow Jones Industrial Average was at 14,000 in October of 2007, right?  Wrong.  The inflation-adjusted chart shows that we're nearly 20% lower than 2000.

    So if you really want to debunk Ron Paul, you have to go well outside of what most people are comfortable with.  Because that's where he starts.  And that's why people think he's a kook.

    -7.75 -4.67

    "Freedom's just another word for nothing left to lose."

    There are no Christians in foxholes.

    by Odysseus on Fri Feb 17, 2012 at 11:39:47 PM PST

    [ Parent ]

    •  The problem is actually starting where Ron Paul (0+ / 0-)

      is. He asserts, as you say, that

      Fiat currency is ALWAYS ALWAYS ALWAYS debased.
      Yet the logical opposite, and entirely factual, truth is that hard standards always lead to deflation, because once the value of the underlying standard tops an absurd high, all prices pegged to it must be adjusted downward. Further, the very scarcity that makes it valuable constricts growth.

      "Fiat" is just a loaded derogatory that is both grammatically and logically unnecessary. Currency is the coinage issue by a government to facilitate trade and to act as a storehouse for wealth. At this time, the American Dollar (like most other currencies in the world) is backed by the underlying strength of the economy, and will rise or fall as that strength rises and falls.

      This is a lot better at preventing deflation, and allows for growth unrestrained by a shortage of dollars. It is also more stable in terms of inflation, usually doing a better job of reflecting the true costs of goods and services.

      The whole "standards" (gold, silver, pineapples) argument is really a distraction to avoid talking about what is at the root of our economic problems. In our current situation, that is the mal-distribution of wealth caused by lopsided taxation that rewards trading paper over actually producing, importing good rather than manufacturing them, and eliminating jobs rather than creating them.

      Address the tax policies fiasco that causes this huge divide of haves/have-nots and you will address most of the economic problems which face us now. Then solve the debt issue by rewarding saving by the non-rich: make interest on passbook savings accounts tax free, and tax dividends and interest above a certain amount at the same rate as earned income.

      That no only levels the playing field, but prevents the frequent bubbles we've had popping every five years since the 1980's.

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