A return to the gold standard? Really, Paul fans?

Imagine now if the gold standard were in operation today. The federal government would be scrambling to balance its budget in the midst of recession, cutting spending and raising taxes. Instead of pumping money into the economy, the Federal Reserve would be sucking money out. Priority 1 would not be creating and saving jobs, but preserving the nation’s gold hoard.

Instead of living through the nastiest recession since the war, we’d be deep into a second Great Depression.

But in a way, this counterfactual is impossible. No government ever can return to the gold standard…

Since everybody knows that a gold standard country would quit gold as soon as times got tough, nobody will ever believe the decision to restore the gold standard in the first place.

It’s as dead as monocles and walking sticks. Deader, really.