The Instigator
harrytruman
Pro (for)
Losing
0 Points
The Contender
Chrysaor
Con (against)
Winning
3 Points

Gold

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
Chrysaor
Voting Style: Open Point System: 7 Point
Started: 11/9/2015 Category: Economics
Updated: 1 year ago Status: Post Voting Period
Viewed: 295 times Debate No: 82280
Debate Rounds (3)
Comments (0)
Votes (1)

 

harrytruman

Pro

The Gold Standard Debate:
"We have gold because we cannot trust our governments."- Herbert Hoover
Point 1: The constitution and constitutional money:
Article 1 Section 8 Clause 5:
"Congress shall have the power; to coin money, regulate the value thereof, and of foreign coin, fix the standard weights and measures."
As you may know from reading "The Wealth of Nations", in the 1700"s "standard weights and measures" meant the gold standard, it also says "to coin money", not "to paper money", this does not mean that paper money is prohibited, it does mean that our money should be coin money, and paper money should be a claim check to coin money.
Article 1 Section 10 Paragraph 1:
"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."
So right here it is listing all the things states cannot do, if you will note it says "make anything but gold and silver coin a tender in the payment of debts", so that is that, there is nothing further is needed.
Yes, the constitution can be amended, but there are two problems;
1.The economic recovery act of 1970 is not an amendment.
2.Regardless, the gold still belongs to the American people.
Richard Nixon can halt the deposit of gold, and allow for fiat to be issued, but the gold that backs dollars belongs to the American people, we do not live in a communist country so Uncle Sam has no right to "confiscate" our gold.
Point 2; Fiat never works:
The first fiat currency was Sumerian clay tablets, they were not backed by gold, they were not made out of gold, silver, or copper, and they were valuable because the king declared them to be. This may have worked for a while, mainly because the king did not have a conveyer belt where he mass produced them like the Federal Reserve does. It was the longest lasting fiat, lasting around 1000 to 2000 years, but Egypt on the other hand which operated on a commodative money system, that is to say, wheat was their medium of exchange and gold and silver came second, lasted around 6000 years- before the romans came.
Contrary to popular mythology, Roman coin was not fiat, like the Egyptians used gold or silver on occasions, the Romans used copper, the Roman coins were copper coins. So Rome actually operated on a "copper standard" as their prime money, gold and silver coming second.
Point 3; The money supply:
Under a commodative money system, how do you increase the money supply- well you have this guy called "the farmer", and he works for 8 hours a day, 7 days a week, every day of the year save winter, then he produces wheat to trade with.
Under a representative money system, how do you increase the money supply- well you got this guy called "the miner", and he goes into a gold or silver mine and mines gold or silver.
If you will note, in both of these systems, as it should be, the money is valuable not because the government said so, but because it took labor to produce, and it can command labor.
But under a fiat system, how do you increase the money supply, well you got this guy named Alan Greenspan, and he goes over to the US Mint, and he says "Hey can you print money and sell it to me for pennies on the dollar", then they say "oh sure, we can sell it to you for pennies on the dollar", then he loans the government this same money that they printed, at interest.
So the government prints the money, gives the fed this money for less than its face value, then the fed sells it back to the gov for more than its face value, sounds slimy.
There was a guy, Bill Still, he made a documentary "The Money Masters", overall he seems very credible, he knows G E Griffin, there is only one thing I have an issue with, he supports "State issued" money, and to this all I have to say is this;
"Any man who thinks he can be happy and prosperous by letting the government take care of him better take a closer look at the American Indian."- Henry Ford
Chrysaor

Con

Accepted. I hope this is a fun debate. Below are the reasons to not return to the gold standard.

1. The gold standard would constrain economic growth. The rate of economic growth would have to keep up with gold mining under a gold standard. When an economy's productive capacity grows, so should its money supply. Since the money supply is contingent on the amount of gold, there should be a steady rate of gold mining. The scarcity of the metal would constrain economic growth, causing prices to fall (1). Gold stocks rising faster than the rate of economic growth would cause hyperinflation, and slower rising gold stocks would cause deflation. The impacts of these are catastrophic. Deflation causes economic stagnation and a rise in unemployment. It also increases the value of debt and may aggravate recessions (2). Rise in prices (i.e. inflation) can cause hoarding, social unrest, and can hurt economic supply (2).

2. Transition to the gold standard would be impractical. The proposition doesn't establish how he would implement the gold standard in the United States. The amount of gold extracted till now today equals about $8.5 trillion. In the United States, 4.26% of the total gold is stored as reserve. The US money supply is at about 11 trillion dollars (3). This means transitioning to gold is impractical, outside of two solutions: (a) reducing money supply, or (b) increasing gold stock. The first would cause deflation, and the latter would be extremely costly to implement.

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Now, onto the rebuttals.

1. In the 1700s, "standard weights and measures" may have meant gold. It doesn't mean that now. All of Pro's examples presume that Constitutional originalism is to be followed. It's up to anyone's interpretation to understand what the Founding Fathers meant when they drafted the Constitution. But the status quo is built according to the Constitution. While Pro's interpretation might be against, the status quo is what the Constitution says. The status quo is made for that. For order's sake, there has to be a "final" interpretation of the Constitution. The Supreme Court is the final interpreter of the Constitution. The Supreme Court should be considered infallible in interpretation for the sake of order. Otherwise there would be multiple disputes. The purpose of the Supreme Court is to interpret the Constitution -- it is infallible because it is final. And the Supreme Court has ruled thrice in favor of the fiat money system: Knox v. Lee, Parker v. Davis, and Juillard v. Greenman. To ensure no anarchy, prefer the Supreme Court's interpretation of the Constitution to Pro's.

2. All examples against the fiat money system that Pro presents are past examples entirely independent of the United States. The scenario is different now. The fiat money system can moderate recessions and prevents total money collapse (4). None of Pro's examples proves their point.

3. Turn this argument against Pro. Money supply will reduce under a gold standard, since the money supply is greater than gold stock (3).

-

The resolution is negated.

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(1) http://www.j-bradford-delong.net...
(2) Hummel, Jeffrey Rogers. "Death and Taxes, Including Inflation: the Public versus Economists" (Jan 2007).
(3) http://www.federalreserve.gov...
(4) http://www.nber.org...
Debate Round No. 1
harrytruman

Pro

"1. The gold standard would constrain economic growth. The rate of economic growth would have to keep up with gold mining under a gold standard. When an economy's productive capacity grows, so should its money supply. Since the money supply is contingent on the amount of gold, there should be a steady rate of gold mining. The scarcity of the metal would constrain economic growth, causing prices to fall (1). Gold stocks rising faster than the rate of economic growth would cause hyperinflation, and slower rising gold stocks would cause deflation. The impacts of these are catastrophic. Deflation causes economic stagnation and a rise in unemployment. It also increases the value of debt and may aggravate recessions (2). Rise in prices (i.e. inflation) can cause hoarding, social unrest, and can hurt economic supply (2)."
The US Treasury can keep gold and silver reserves if the economy needs more money, if it does not, the treasury can then stock gold or silver for when it is.
"2. Transition to the gold standard would be impractical. The proposition doesn't establish how he would implement the gold standard in the United States. The amount of gold extracted till now today equals about $8.5 trillion. In the United States, 4.26% of the total gold is stored as reserve. The US money supply is at about 11 trillion dollars (3). This means transitioning to gold is impractical, outside of two solutions: (a) reducing money supply, or (b) increasing gold stock. The first would cause deflation, and the latter would be extremely costly to implement."
Very simple, Uncle Sam hires the unemployed to mine gold, pays them in gold or silver certificates, extra gold goes toward new certificates to redeem old Federal Reserve notes after the Federal Reserve is abolished. Say there are 1 million dollars in old bills to redeem and Uncle Sam redeems 10% in gold or silver certificates, the rest in Fiat notes, in this way we will return to the gold and silver standard slowly, otherwise our economy would be destroyed.
"1. In the 1700s, "standard weights and measures" may have meant gold. It doesn't mean that now. All of Pro's examples presume that Constitutional originalism is to be followed. It's up to anyone's interpretation to understand what the Founding Fathers meant when they drafted the Constitution. But the status quo is built according to the Constitution. While Pro's interpretation might be against, the status quo is what the Constitution says. The status quo is made for that. For order's sake, there has to be a "final" interpretation of the Constitution. The Supreme Court is the final interpreter of the Constitution. The Supreme Court should be considered infallible in interpretation for the sake of order. Otherwise there would be multiple disputes. The purpose of the Supreme Court is to interpret the Constitution -- it is infallible because it is final. And the Supreme Court has ruled thrice in favor of the fiat money system: Knox v. Lee, Parker v. Davis, and Juillard v. Greenman. To ensure no anarchy, prefer the Supreme Court's interpretation of the Constitution to Pro's."
The constitution is not up for interpretation, when it says gold standard, it means gold standard, as I mentioned before, the "Economic Disaster Act of 1971" did not get the necessary 2/3 votes to amend the constitution.
"
2. All examples against the fiat money system that Pro presents are past examples entirely independent of the United States. The scenario is different now. The fiat money system can moderate recessions and prevents total money collapse (4). None of Pro's examples proves their point."
History repeats itself, we are no different, and if you believe that we are you are very mistaken.
Chrysaor

Con

(1) Economic growth

Pro doesn't really address this. All he says is that the U.S. treasury can keep gold and silver reserves to curtail loss of money. But he drops that gold standard causes deflation or hyperinflation, and drops that these curtail economic growth.

(2) Impractical

But the mining of gold -- even under Pro's counterplan -- would be extremely expensive, since we would need to invest in technology, and people. We can't pay them in gold, because that is effectively a shift to the gold standard, which -- sans enough gold -- significantly harms the economy.

(3) Constitution

Pro argues that the Constitution is not free to interpretation. It is, though, free to interpretation by the Supreme Court. The Constitution doesn't need to be followed as it was in the 1700's -- Pro assumes that Constitutional originalism is the best, but fails to justify that. As Justice Jackson, when he sat on the Supreme Court, once said, "We are not final because we are infallible, but we are infallible . . . because we are final." The Constitution might have multiple meanings, but somebody must be charged with final interpretation of the Constitution -- that is the Supreme Court. Since the Supreme Court has ruled in favor of fiat money, fiat money is Constitutional.

(4) Fiat money

Pro says "history repeats itself." This is a bare assertion. So far, the fiat money system has worked perfectly in the United States. Until Pro refutes this, this argument is flawed.

Pro dropped money supply, thus conceding the turn.

-

The motion remains negated.
Debate Round No. 2
harrytruman

Pro

"1) Economic growth

Pro doesn't really address this. All he says is that the U.S. treasury can keep gold and silver reserves to curtail loss of money. But he drops that gold standard causes deflation or hyperinflation, and drops that these curtail economic growth."
The truth is is that I DID address this, the US Treasury keeps gold and silver in case the economy needs more money, if it does not then it stocks gold and silver for when it does, problem solved, the US Treasury can take care of it all if necessary.

"But the mining of gold -- even under Pro's counterplan -- would be extremely expensive, since we would need to invest in technology, and people. We can't pay them in gold, because that is effectively a shift to the gold standard, which -- sans enough gold -- significantly harms the economy."

No, we pay them in gold certificates, which are backed by the gold they mined, problem solved, and as to the expenses, this is America.
"Pro argues that the Constitution is not free to interpretation. It is, though, free to interpretation by the Supreme Court. The Constitution doesn't need to be followed as it was in the 1700's -- Pro assumes that Constitutional originalism is the best, but fails to justify that. As Justice Jackson, when he sat on the Supreme Court, once said, "We are not final because we are infallible, but we are infallible . . . because we are final." The Constitution might have multiple meanings, but somebody must be charged with final interpretation of the Constitution -- that is the Supreme Court. Since the Supreme Court has ruled in favor of fiat money, fiat money is Constitutional."
No, the Supreme Court is the highest court in the land, but it is not above the constitution, and I suppose you would have some piece of the constitution that granted the supreme court that authority? I provided quotes from the constitution when I argued that fiat is unconstitutional, you are yet to do so.
"Pro says "history repeats itself." This is a bare assertion. So far, the fiat money system has worked perfectly in the United States. Until Pro refutes this, this argument is flawed."
Ok, let"s examine this, the last two decades before we left the gold standard, in the 1960s and 1950"s, we had a middle class, and equal opportunity for all. So now we can examine this argument of yours, you say it has worked perfectly, but the only way this is beneficial is that our GDP has increased, so yeah, the fiat system worked perfectly, that is, if you are one of those 0.1% of the population that gets a slice of that GDP.
It has not worked perfectly, inflation is in the double digits, our unemployment rate is 5%, the minimum wage is at 7.25$ a hour, our national debt is at 18 trillion, yeah, fiat really helped us out.
Chrysaor

Con

I thank my opponent for a fun first debate on the site.

(1) Economic growth

So what if reserves help to gain more money? I didn't say we would lose money, I said economic growth would be curtailed. This is just a red herring. The gold standard curtails economic growth -- it causes deflation and hyperinflation (1). I don't see how Pro's rebuttal relates to this at all. Pro drops all of my claims, warrants, and impacts.

(2) Constitution

A statement such as "the Supreme Court . . . is not above the Constitution" is contradictory. For all practical purposes, what the Supreme Court says is what the Constitution says. The Supreme Court is equal to the Constitution, since its decisions are equal to the Constitution. The Supreme Court's word is final. There are multiple interpretations of the Constitution, including my opponent's, but unless we have an official interpreter of the Constitution, people could say taxation is unconstitutional and not pay taxes. The Supreme Court's interpretation is final, and, therefore, is infallible. It ought to be treated as infallible. As it stated in Marbury v. Madison, the Supreme Court gets to decide "what the law is." The law is the Supreme Court, and the Supreme Court is the law. And Knox v. Lee, Parker v. Davis, and Juillard v. Greenman are representations of what the Constitution has to say about fiat money.

(3) Impractical

Paying them in gold itself is costly, since gold is costly. "[A]s to the expenses . . . this is America" isn't a compelling response. I don't see any impact or link here. Mining gold costs money. Pro drops the resources cost, et cetera. To pay them, we have to mine gold.

(4) Fiat money

In the 1950's and the 1960's, the United States did not operate via a gold standard. It was abandoned in 1933 (2). There is evidence to suggest that deflation was at its highest when the US operated with a gold standard based economy (3). Inflation is not "in the double digits." There is only positive inflation -- 0.8% last year, and, as of October 15 this year, 0.0% inflation (4). The US has not experienced deflation since the gold standard (4). And 5% is a low unemployment rate. In 1932, just before the US abandoned the gold standard, the unemployment rate was at 23.6% (5); further, this is a "post hoc ergo propter hoc" fallacy.

-

The resolution is negated.

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(1) http://www.j-bradford-delong.net...

(2) http://mentalfloss.com...

(3) http://research.stlouisfed.org...

(4) http://www.usinflationcalculator.com...

(5) http://www.infoplease.com...
Debate Round No. 3
No comments have been posted on this debate.
1 votes has been placed for this debate.
Vote Placed by Romanii 1 year ago
Romanii
harrytrumanChrysaorTied
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Total points awarded:03 
Reasons for voting decision: Pro only contested Con's case with bare assertions, and Con used sources to prove those assertions to be blatantly false. As for his own case, Pro ended up falling back mostly on his constitutionality argument, but Con refuted it by pointing out that the Supreme Court is chiefly responsible for interpreting the constitution, and they have taken no issue with the gold standard. By the end of the debate, all of Con's arguments remain standing, and all of Pro's arguments are refuted. Clear win for Con.