Is A Gold Standard Good Or Bad For The Middle Class?

by Nathan Lewis, Forbes  |  published on October 24, 2013

Recently, Ralph Benko began to dig at the question: Is a gold standard system bad for the middle class?

First: the obvious. The U.S. middle class reached its peak of prosperity at the end of the 1960s. The typical one-income family could afford a house, car, decent healthcare and a college education, and still have enough left to maintain a 10% savings rate.

Yes, they had vacuum-tube television sets in those days, instead of watching TV on their telephones. But, as most anyone who was an adult at that time will attest, things were generally better. Former president Jimmy Carter said recently that, “the middle class has become more like poor people than they were 30 years ago. So, I don’t think it is getting any better.” (I think he means more like forty-five years ago.)

The United States had a gold standard policy from 1789 to 1971. At the end of that 182-year period, the U.S. middle class was the broadest and wealthiest in the history of the United States, and indeed the world.

If a gold standard system is bad for the middle class, then how is it that, after nearly two centuries of a gold standard policy, the middle class was the best-off it has ever been?

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