Printing money without backing leads to ruin

I WATCHED (on the internet) the recent Frontline Show with Pat Kenny when an audience member raised the issue of Britain and the United States going off the gold standard.

The audience member suggested any debate over Ireland’s shaky economic condition should begin with a debate over the efficacy of returning to the gold standard.

Kenny dismissed the audience member’s comment by saying “That is a discussion for another time.”

In 1971, United States President Richard Nixon and Congress took the US off the gold standard, despite the warnings of Nixon’s financial advisor Arthur Burns, permitting the government to print paper money at will with no gold to back it up.

The recent bailout of US banks and financial institutions, to the tune of hundreds of billions of dollars, was all done with this funny money the US government continues to print.

When Mr Kenny’s audience member raised the issue, Kenny could have said, “good point” and turned to the economists on his guest panel and inquired how they felt about the subject. Many important economists worldwide understand that governments printing money not backed by anything but a smile and charm, can lead to economic ruin as currencies become devalued.

This is painfully clear given what is happening in the US and Ireland.

Lloyd Carter

California

USA