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Samuel Gregg: Fiat money and public debt

By Alliance Alert

Samuel Gregg, Research Director at the Acton Institute, writing at Public Discourse: "[O]ne of the Great Recession?s unexpected benefits is the manner in which it has reignited a range of economic debates that have needed attention for some time. One is a widespread questioning of the methods and priorities of mainstream economic science. Another discussion concerns the conduct of monetary policy . . . Closely related to this are questions about the long-term viability of fiat money: the means of exchange that has dominated the world since the end of the gold standard . . . One [of the problems associated with fiat money] is the greater ease with which it permits governments to devalue currencies, thereby reducing the wealth of those with assets denominated in that currency . . . [It] facilitat[es] systemic moral hazard throughout entire economies . . . [and] it encourages the illusion that governments and central banks can somehow 'manage' multi-trillion dollar economies."

Full post as published by Constitutionally Correct on September 10, 2010 (boomark / email).