Interest payments on America’s ocean of debt are rising at an alarming rate. Interest payments of $800 billion dollars a year, and “skyrocketing,” threaten America’s solvency, threaten to crowd out many programs dear to the hearts of both Republicans and Democrats, threaten our very ability to pay our bills.
The tsunami of red ink also threatens the political viability of new House Speaker Mike Johnson. What to do?
There is a practical solution, one that does not entail playing chicken with shutting down the federal government. The foundational Constitutional money, the gold standard (together with silver, called “bimetallism,” yet in practice gold was America’s base money for most of our history) is loathed by academic economists.
They’re wrong. Done right, it would dramatically reduce Uncle Sam’s interest payments.
Fortunately, we have a grand conjunction. Speaker Johnson shows every sign that he would welcome the classical gold standard on Constitutional originalist, historical, biblical and practical grounds.
Mike Johnson’s the right man at the right time.
How to do it? Resurrect and enact the Jack Kemp Gold Standard Act of 1984, described by Kemp’s former economist in detail here. Although it died in committee, Kemp’s bill, the gold standard of gold standard legislation, was co-sponsored by future luminaries Newt Gingrich, Connie Mack, Vin Weber, and others.
A variant was reprised in the current Congress by outgoing member Alex Mooney, R-W.Va., co-sponsored by Reps. Andy Biggs, R-Ariz., and Paul Gosar, R-Ariz. The Freedom Caucus and Establishment Republicans both will enjoy how righteously the gold standard balances the budget.
America’s elder statesman Lewis E. Lehrman, the eminent Reagan Gold Commissioner, was the architect of the Kemp plan. Lehrman was my political mentor and intermittent professional associate, united around the classical gold standard whose formula he laid out to perfection in his book The True Gold Standard—a Monetary Reform Without Official Reserve Currencies.
Lehrman, an intensely private man, quietly made an impact on American lives in many ways — such by formulating much of Reaganomics, by his curation of the legacy of Abraham Lincoln through the Gilder Lehrman Institute of American History and elsewhere, and in many other ways. All is now elegantly revealed in his autobiography: The Sum of it All (Rowman and Littlefield), sharing fascinating, little known, stories of a well-lived life.
Including his lifelong crusade for the gold standard.
In his big life, Lehrman became the Republican nominee for New York governor, losing ever so narrowly to Mario Cuomo. He was founder and chairman of President Reagan’s grassroots civics league, Citizens for America (of which I was featured as the number one district chairman in my day.)
He was a successful businessman — building the family grocery store into the powerful Rite Aid drug store chain, successful investor, author, scholar, historian and philanthropist. I can’t do that life justice in short space.
So, rather, let me go for the gold, the most relevant portion of Lehrman’s legacy. It, ultimately, will prove the most consequential of his many gifts to America.
Lehrman and I originally bonded over the Reagan Gold Commission, where he, as a commissioner, appointed me one of its 23 official witnesses. Only two of us, if memory serves, testified in gold’s favor.
I had sent him a paper, “Constitutional Gold” which I, a young lawyer, had written on the Constitutional history of American monetary policy, a summary of which is now filed at FRED. Later, he made me the editor of the Lehrman Institute’s monetary policy website.
Lehrman was short-listed by Reagan for Treasury Secretary. The conventional economic thinkers around Reagan blocked his appointment.
That said, he composed a seminal paper for the Reagan transition, Avoiding a GOP Economic Dunkirk, which served as the blueprint for much of Reaganomics.
In Chapter 14 of The Sum of It all Lehrman summarizes, comprehensively, his long crusade to move America forward to the gold standard. He was the American protégé of the greatest gold standard economist of the 20th century, Jacques Rueff.
Lehrman tussled relentlessly with that great anti-gold-bug Milton Friedman. He published extensively.
Lehrman describes his work with the Gold Commission and his ambivalent relationship with its minority report, “The Case for Gold.” He eloquently indicts the Pandora’s Box that the classical gold standard’s grotesque caricature, the gold-exchange standard, and the reserve dollar standard that succeeded it, opened on American workers.
Therein he lays out how the classical gold standard can readily reverse our economic miseries. I urge all, especially Congress and staff, to read The Sum of It All and follow its wise guidance to take the one safe way to staunch the flood of interest payments that threatens to sink America.
How to make America great again? The Sum of It All furnishes, amidst its many other pleasures, a sure map to a new golden age.
Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply-Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $94T. Read Ralph Benko's reports — More Here.
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