Absurdities

  There is no magical formula that gets the economy moving. The reason why the economy moves is very base. The assumption that government spending prolongs economic malaise is simply absurd. What difference would it make if the economy was fueled by private spending versus government spending. Both are derived from debt. Both are also based on government printed money to act as a reserve for those debts.

  Trying to squeeze more debt from businesses and consumers by pushing them to take out more loans, and use their credit cards in order to pump up private spending is no different from the government doing it. The only difference is that government spending is much safer since the government can print money while the businesses and consumers risk repossession.

  Historically, the money supply was always based on gold. Whenever gold reserves were unable to expand rapidly, the economy mimics that unless there was fractional reserve lending to fraudulently expand the money supply. The silver standard helped alleviate this since another set of commodities could be used as a reserve to expand the nation's money.

“The gold standard has slain tens of thousands.” He referred to “a struggle between ‘the idle holders of idle capital’ and ‘the struggling masses, who produce the wealth and pay the taxes of the country;’ and, my friends, the question we are to decide is: Upon which side will the Democratic party fight?” At the peroration, he said “You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.”

  Overproduction occurs when more goods are produced than there is money. So when goods and services exceed the money supply, the result is deflation. But businesses can not make profit if they work harder while prices continue to fall. So naturally, they cease working at all. The Silver standard would alleviate this since silver would also act as a standard to help inflate the money supply thus giving businesses the inflation they need to keep producing goods and services.

  An arbitrary increase in the gold supply would give the government the necessary means to arbitrarily increase the money supply. But if you know it is arbitrary, what does it matter how the money supply is increased. If you understand why the gold and silver standard was in operation, why even give a damn about how the money supply is expanded.