How Trump can go gold to make America great again

Shortly after Donald Trump’s election, columnist Nathan Lewis wrote: “[The] best monetary move President Trump could make in his first 100 days would be to remove the tax and regulatory barriers on using gold as a competing currency to the dollar.”

Lewis advocated for rapid legislative action to end all taxes and restrictions on silver and gold transactions to permit their use as alternative forms of money.

“This would allow people to use services like Bitgold, commercial bank checking accounts denominated in gold, or even privately-issued banknotes without impediment, alongside the floating fiat dollar. They could use gold coins too if they wanted to,” he wrote.

“People could vote with their feet; free to make contracts or engage in transactions with either gold and gold-based vehicles, or Federal Reserve Notes. Probably, nothing much would change at first. But, over time, people might find they like gold better,” he said.

In another column, titled “Jack Kemp’s Gold Standard Act of 1984 Shows Us How It’s Done,” Lewis provided a link to the late Rep. Jack Kemp’s bill to return the U.S. to the gold standard, showing exactly what such a system would look like legislatively. 

Lewis’s calls to action rather precisely track the findings of the Heartland Institute submitted to President Trump in a white paper prepared by its working group on monetary policy.  Issued on December 14, 2016, it was called “Monetary Policy: The Gold Standard.”  I was one of the two principal investigators for, and authors of, that paper.

The working group found:

The Gold Standard Is Great Policy. 

For almost 180 years, the American economy benefited from a variant of the gold standard.  The gold standard economy fostered what came to be known as the American Dream: equitable prosperity, which is to say rapid economic growth conjoined with economic justice, abundant opportunity for “the little guy,” including plentiful jobs and upward income mobility.

The working group concluded:

Both Donald Trump and Mike Pence are on record as favoring the gold standard.

The gold standard was crucial to making America great.  It brought prosperity and justice to all.  It is crucial to making America great again.  The classical gold standard is excellent politics and excellent policy.  The classical gold standard is mainstream.  It has many distinguished proponents.  The Jack Kemp Gold Standard Act of 1984 is the optimal vehicle for implementing the gold standard.  It would be worthwhile for President Trump to invest political capital in enacting that measure during his first 100 days.  We also recommend enactment of the Centennial Monetary Commission, a measure that already has achieved House passage, and the assembly of a White House or Treasury internal task force dedicated to removing the federal government’s de facto monopoly on issuance of money by the removal of all tax and regulatory barriers to the use of gold and silver as money.  The gold standard is essential to making America great again and can be implemented far more easily than is generally appreciated.

The presidential transition is over. Donald Trump now is the president of the United States. He is rapidly beginning to implement his campaign promises.

His praise for the gold standard twice on the campaign trail, to WMUR and GQ, did not quite rise to the level of a campaign promise.  Yet Candidate Trump’s praise made it clear that he appreciates the power of the classical gold standard as a major asset in allowing him to make America great again.  It’s a lot easier to do than he has been led to believe.

The Motley Fool, a well regarded investor newsletter, recently headlined an article, “Would Donald Trump Really Put America Back On The Gold Standard?,” with Sean Williams writing:

Donald Trump is going to have a busy first 100 days in office. Based on his plan of action, released just hours after declaring victory in November, Trump plans to tackle dozens of policies ranging from tax reform to repealing and replacing the Affordable Care Act.

However, Trump has other plans in mind, too, extending beyond his first 100 days in office. Among them, he's suggested bringing back an idea that hasn't been U.S. government policy for 46 years. That's right folks: the gold standard.

Yes, President Trump adopting the gold standard is a real possibility.  And a great idea.

Issuing an executive order to, in Nathan Lewis’s words, “eliminate all taxes and restrictions on transactions in gold and silver, which would allow them to be used freely as an alternative form of money” would be an excellent step to make America great again.  Then, on to the Jack Kemp Gold Standard Act...of 2017.