Ryan wants to eliminate Paper Money

[cthulu2016]

The man widely praised as the deep-thinking Republican pragmatist who understands the economic complexities we face doesn't believe in paper money.

I do not mean that he thinks currency should be replaced by electronic transfers. He thinks it should be replaced by gold coins.

First, the fact that he is a gold standard guy is not even noted in our national dialogue.

When Dole picked Ryan's mentor Jack Kemp in 1996 it was widely recognized that Kemp was a crackpot because he crusaded for a return to the gold standard. But in 2012 it is no big deal that Ryan seeks not only a return to the gold standard, but even the elimination of currency backed by gold.

And which stellar economic thinker was the source of Ryan's bizarre macroeconomic views?

Ayn Rand, of course. As Ryan said in 2005:

I always go back to, you know, Francisco d’Anconia’s speech, at Bill Taggart’s wedding, on money when I think about monetary policy. Then I go to the 64-page John Galt speech, you know, on the radio at the end, and go back to a lot of other things that she did, to try and make sure that I can check my premises.

(Note that in Ayn Rand's world people make 23 paragraph speeches on monetary policy at your wedding. How fun!)

As Krugman notes:

that 23 paragraph speech isn’t just a call for the gold standard; it’s a call for eliminating paper money and going back to gold coins.

http://www.slate.com/blogs/weigel/2012/08/13/what_paul_ryan_s_ayn_rand_fandom_means_for_monetary_policy.html

http://krugman.blogs.nytimes.com/2012/08/23/francisco-danconia-on-money/

[sadbear]

1. Isn't this a Ron Paul position, too?

[Ganja Ninja]

7. Lyndon LaRouche too. n/t

[jsr]

2. A Walmart Woodforest debit card is all you need

[KansDem]

4. I was thinking the same thing...

Forget cash! Go with a debit card! They're as good as cash!!!

[font size="1"](And how much of a charge per transaction will there be?)

[Lifelong Protester]

3. He probably REALLY wants us to go back

to the barter system. Where NONE of us 99% have ANY money.

[matmar]

5. I'll bet you he's read THE CREATURE FROM JEKYLL ISLAND

...a book put out by the John Birch Society attacking the Federal Reserve.

I've read the book.

Anything that isn't hard right economic thinking is a considered "socialism".

[HopeHoops]

6. I sort of agree on the coin part, but not the electronic part. I use dollar coins all the time.

Coins (except pennies and nickels) cost a lot less to make than paper in the long run. Paper has a very short circulation life. Coins pretty much last forever. Canada uses coins for $1 and $2 denominations. I think we could easily drop the penny, and maybe even the nickel, and use coins for denominations up through $20. It's also silly that we don't have bills greater than $100 in value. Have you ever tried to move $5,000 in cash? It's a huge stack of bills.

The gold standard is dead. There's no stability to the price. Currency needs to be based on a fixed value.

[cthulu2016]

8. But not gold dollar coins

I have no problem with coins.

But a dollar coin is the same as a dollar bill—it is a symbol of value that is worth much less than a dollar.

So Ryan is not for coins in general, any more than paper money.

[HopeHoops]

9. No, not real gold, but "golden" is fine. The Suzy wasn't a hit because it was too close to a quarter

[mysuzuki2]

10. Forgive me if I'm wrong on this. I'm an Anthropologist not an economist.

But wouldn't this cause an immediate massive decrease in the money supply? If so wouldn't that also cause a great decrease in capital to start or expaand businesses? And wouldn't it also cause a decline in demand for goods and services since no one would have money to buy anything? It seems to me that this scenario would make the great depression seem like good times.

[cthulu2016]

11. Indeed it would...

but on the bright side, Peru would suddenly find it has as much "real" money as Japan.

And Russia would be delighted.

I am suspicious of a monetary system that changes every time somebody digs more gold out of the ground.