If you want small government and no inflation, you want to give government the power to print interest-free money and to take away government’s power to borrow money printed as interest-bearing debt. The powerful forces of usury would end the search for easy profit in the printing press of private banks, wasteful government spending, and the interest-bearing treasury bonds associated with wasteful spending. The powerful forces of usury would start to work in the same manner to end wasteful spending and stop the government from printing interest-free money. When private banks print the money as interest-bearing debt, the usurer is in favor of the printing press despite the inflation. When government borrows money as interest-bearing debt, the usurer is in favor of wasteful government spending. When the government prints interest-free money and no longer borrows money from the usurer, the usurer is no longer interested in printing money, is no longer interested in wasteful government spending borrowed at interest from the usurer, and would no longer tolerate inflation. Since the printing press of money would serve the public interest rather than the usurer, the usurer would seek profits in corporate bonds, strengthening corporate power in honest means rather than through the force government.
Furthermore, if you’re a Libertarian, you would want separation of government and commodity markets. No Libertarian should want government to be commodity traders, to collect taxes in gold, to mint gold, and to warehouse gold. No Libertarian should want the banks chartered by government to emit bills of credit to corrupt the commodity market of gold either. You do not want government deciding that any commodity should be money. All commodities, especially a rare natural resource like gold, should remain in the free market where Libertarians can buy and sell the commodities without the corrupting influence of government. No Libertarian should want a gold standard since that is state intervention in free markets in the worst possible way. If you want to use gold as a store of wealth, you do not want gold to be declared legal tender. You only have to look at the long history of the dollar in the United States to see how many times the government corrupted gold markets.
Libertarians who fear inflation should lobby to end the printing press of private banks, should lobby to end the government’s power to borrow, and lobby for the power of government to print money. The invisible hand which drives wasteful spending and inflation would work to end wasteful spending and inflation if government had the power to print interest-free money rather than borrow it from the private banks which print the money as interest-bearing debt.
Libertarians should support HR 2990, the NEED Act of 2011, and support Bill Still to top the Libertarian ticket in 2012.
Good points. Yes, a gold standard would amount to a massive intervention. You could also observe that it’s the elite banksters who libertarians ostensibly oppose, who have always championed gold.
Re: Still’s bill: Is the mechanism for regulating money supply decentralized and representative (you know, like the Fed once pretended to be)?
The other thing is, Congress does massively waste money and usurp power unconstitutionally, so those on the right, rightly, balk at giving them what seems to amount to a blank check. Does the bill divorce printing power from *spending* power? When Congress resumes the authority to print currency, it should do so in the role of printer and delivery boy to the States, which actually possess the real spending authority over most of the areas the feds have usurped.
HR2990 is sponsored by Kucinich and written by Zarlenga. Bill Still I believe has a separate proposal along the same lines. Zarlenga’s bill is just a more finished product.
The bill primarily ends government borrowing as the default course for financing deficit spending, with printing being the default course, which would mean those who previously would lobby for deficit spending because they were stealing the interest on it from the tax payer, would no longer tolerate inflation because they would no longer be able to steal it and would instead lobby against it because the wealthy would now be the ones paying the “inflation tax.” The Congress could still authorize the issuance of treasury bonds, they would just have to specifically legislate it as an exception to the rule. You’d need a Constitutional amendment to limit Congress to do that anyways.
It also dissolves the Federal Reserve into the U.S. Treasury and sets up a public entity, fully transparent, to manage a centralized reserve pool which the banks could loan against beyond 100% reserves, like the Federal Reserve, but much more transparent and with more accountability, more centralized direct control, more control by the Congress, and more limitations to prevent credit expansion and contractions. My take is that it gives the Treasury some ability to fine tune availability of money supply beyond what Congress does. It probably also would make the bill more acceptable to private banks.
Since reserve ratios would have to be full reserve ratios, the bill also retires fractional reserves by retiring the national debt, which is quite an accomplishment. It would result in the biggest and best spending cut if the tax payer no longer had to pay interest to aristocrats around the world.
My conclusions are that the point of government corruption would drastically change. Lobbying efforts would be against deficit spending and be even more focused on directing favor towards corporations since the primary source of wealth for those who previously held treasury bonds would be holding corporate bonds. They only tolerated inflation because they were stealing the wealth. Since they no longer could steal the wealth associated with inflation and since the government would now be collecting that wealth, they would surely lobby against it unless it was to preclude a lobbying effort to slow or halt government printing well short of what is necessary for economic growth. However, such a monetary boom/bust cycle would be much more difficult and much more limited in destruction. The real concern is that the prosperity would create a housing bubble, making housing unaffordable for the poor. Thus, the land issue would also have to be addressed. Land rents must be collected by the public to prevent a housing bubble. Funding land-based infrastructure and public health insurance option would be helpful though not the primary root of poverty.
i should have also noted in regards to gold, that geolibertarians can argue that those who purchase gold as private property should have to pay land rents to the public on the purchase of gold since gold is a rare and precious natural resource (god’s toil) being taken from humanity for personal use. gold should not be hoarded in a government or bank warehouse and should go to whomever is willing to pay the rent on it to the public. this would help gold markets from being so volatile and reduce the cost of gold for more direct and useful applications. however, i don’t expect to win that argument with conventional libertarians so i left it out of the article.