Could serious monetary reform happen under Romney-Ryan?

| August 24 2012
Christopher Cook

On the political right, there is a vibrant discussion among several factions and positions on the subject of monetary policy.

There are the monetarists, followers of Milton Friedman, who are okay with a central banking system, but who want changes in the money supply to follow a fixed formula.

There are the Austrians (and others) who oppose fiat money altogether, and who want to see us return to a currency system where each dollar is backed by, and can be exchanged for, an fixed amount of a precious metal such a gold.

There are those who believe in the Federal Reserve system as it is, but would just like to see it managed better, and would like to see it focus on controlling inflation rather than trying to inject money into the system based on Keynesian principles.

As is so often the case, there is far less disagreement on the left. Having fiat money and the Federal Reserve system allows them to deficit-spend from now until the end of time. Taking that away from them would be like taking a toddler’s beloved teddy bear—the howling would be blood-curdling.

By picking Paul Ryan as his running mate, Mitt Romney did something amazing: He took the tremendous risk of making entitlement reform—once the third rail of politics—a front-and-center issue. Things can change, but as of this writing, the only thing that is more amazing than that decision is the fact that it seems like it might actually be working to the advantage of the Romney-Ryan ticket! At very least, it does not appear to be the kryptonite the Democrats assumed it would be.

Knowing that the entitlement-driven debt crisis is the most important fiscal issue we face, while at the same time believing that no politician can get away with talking (let alone doing anything) about it, has been deeply frustrating to those of us who have America’s best interests at heart. Seeing Romney take this risk was both terrifying and heartening to us at the same time. Seeing it potentially work to his advantage has been enthralling! Win or lose, Romney has raised the issue to presidential-level politics, which means it cannot be ignored, and will be easier to talk about in the future.

So what about monetary reform? Just like with entitlement reform, the first impulse of many seasoned political observers is to assume that the Overton Window needs to move quite a ways before we can even start talking about it. But is that really true? If Paul Ryan—brilliant, disarming, decent, young, and charming as he is—is the one guy who could actually grab the third rail and not get electrocuted, could he also be the guy who could get the conversation started on monetary reform?

Ralph Benko, writing in Forbes, believes it is essential:

Without diminishing the importance of tax, spending, and regulatory policy, if Romney wins his administration’s getting monetary policy exactly right will prove the determining factor in restoring vibrant economic growth as well as ending federal profligacy.  If a President Romney and Vice President Ryan do not wish to court a similar pang of regret upon departure from office as that suffered by the great Reagan it is essential to take seriously that golden option.

4% growth — promised by Gov. Romney — never has been sustained — not even under Reagan or Clinton — for sustained periods under a fiduciary money such as Federal Reserve Notes.   History demonstrates that sustained 4% growth is achievable, uniquely, through the classical gold standard.   Paul Ryan: history beckons you to help Team Romney complete not one but both movements of Reagan’s Unfinished Symphony in order to achieve the object of your Quest: prosperity and an end to federal profligacy.

Conservative observers, looking at Mitt Romney’s political history, haven’t had high expectations of finding an ideological ally in the “Massachusetts moderate.” But with the choice of Paul Ryan, Mitt Romney is not only showing tremendous courage, he may be showing a willingness to tackle much bigger issues than anyone expected. A lot of conservatives and libertarians worry that a President Mitt Romney would be a lite version of the Democrats, merely managing our slow decline. The Ryan pick is the first indication that that may not be the case. Indeed, we may see some major motion in a Romney-Ryan world: Finally getting spending under control . . . leaving behind foolish notions that the Bush tax cuts caused our massive deficits . . . and seeing the start of real reform in the entitlements arena.

And, if people like Benko and Lewis E. Lehrman get their wish and Paul Ryan has enough cachet to make a substantive move on monetary reform, a consequential Romney presidency could become an absolutely historic one.

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  1. [...] Friday, we discussed whether serious monetary reform is a possibility under Romney-Ryan. We mentioned that there is significant discussion on the right as to what such a reform should [...]