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Could the Gold Standard Save Speaker Johnson?

mike johnson with a photo of gold bars behind him
House Speaker Mike Johnson (Newsmax photo illustration/Getty Images, Dreamstime photos)

Ralph Benko By Friday, 03 May 2024 12:22 PM EDT Current | Bio | Archive

Nobody can legitimately doubt Mike Johnson’s conservative credentials. He is a true believer in the biblical Creationist, “young Earth,” narrative, rejecting the (now prevailing) Darwinian Theory of Evolution. Johnson's position is that the Earth, and the universe, is around 6,000, rather than 4.5 billion, years old.

That’s not merely conservative. That’s pre-modern, well to the right of most of even the most vociferous MAGAs. (See: the Scopes Monkey Trial, wherein creationist William Jennings Bryan sang his swansong.)

This does not undermine Johnson’s pragmatism or arithmetical ability. He knows what can and cannot be accomplished with a precarious one-vote majority.

He has solid judgment about what will advance or retard the conservative cause. Yet despite his pristine conservatism, his excellent discernment, and his remarkable political agility, Mike Johnson is in a pickle.

Some of the House’s 15 MAGA fanatics (not to be confused with conservatives) are proposing to defenestrate him from the office of Speaker. They are angry at the failure to make progress in balancing the federal budget.

It would be politically and philosophically catastrophic to pry the gavel from Johnson’s hands. Yet ... they have a valid point.

Here’s how Johnson can escape the pickle jar.

Raising taxes or cutting discretionary spending are two unpalatable, impolitic, ways of balancing the budget. There is a third, politically sweet, practical way of achieving a federal surplus.

Success lies in adopting a great, pro-growth, non-inflationary, monetary policy, moving America toward generating a federal surplus. It's Johnson’s “get out of jail free” card.

Bill Clinton extended Reagan’s prosperity policies, maintaining reasonably low marginal income, and cutting capital gains, tax rates, while encouraging the Fed to sustain a stable dollar.

The result? Massive growth and a federal surplus.

Progressives still have not forgiven Clinton.

Cutting the deficit is a key objective on which Johnson, the Freedom Caucus, the MAGAs, and the Republican Regulars all agree. How?

Use gold. Almost all academic economists revile the gold standard. They're empirically wrong.

There are abundant data showing that the gold standard, much preferably the classical gold standard, would bring about the growth rates needed to not just to cut the deficit but to put the federal budget into surplus, all while enriching us rank-and-file citizens.

Gold comes with eight bonuses.

First, gold is intuitively the antidote to inflation, a top-of-mind issue among voters.

Second, precious metals-based currencies, of which the gold standard is the gold standard, are biblical.

Third, precious metals-based currency is clearly constitutional, as attested to by my testimony as one of the 23 official witnesses before the Reagan Gold Commission.

Fourth, there is convincing (outdated but easily replicated) polling evidence that the gold standard is popular, especially among blue collar workers and Blacks, two new Republican-trending constituencies.

Fifth, the Democratic Party’s intelligentsia are dead set against the gold standard, making them a perfect political foil.

Sixth, the original supply-side manifesto, the Mundell-Laffer Hypothesis, wildly successful as far as implemented, was almost entirely devoted to restoration of the gold standard. What became known as the Laffer Curve was, literally, a footnote.

Supply-side’s chief architect Robert Mundell’s 1999 Nobel Prize acceptance speech was largely dedicated to a recitation of why the gold standard proved itself superior.

Seventh, the Bank of England did a comprehensive paper showing that the gold standard provides superior equitable prosperity and financial stability than a paper money standard.

Eighth, presidential candidate Donald Trump in the 2016 race spoke twice glowingly of the gold standard:

“’We used to have a very, very solid country because it was based on a gold standard,’ Trump told WMUR television in New Hampshire in March 2016. … But he said it would be tough to bring it back because ‘we don't have the gold. Other places have the gold.’

“Trump commented to GQ: ‘Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We'd have a standard on which to base our money.’"

Trump was misadvised. America has the gold.

Restoring the gold standard, rightly done? Easy as pie.

And, last but not least, one of the key architects of late-20th century American prosperity, Dr. Arthur B. Laffer, holder of the Presidential Medal of Freedom, as well as the two intellectual heirs of Reagan Gold Commissioner Lewis E. Lehrman, are available to help guide the resurrection and enactment of the perfect gold standard bill, the Kemp Gold Standard Act of 1984.

Thus, Speaker Johnson has an unconventional but simple, powerful, politically palatable way of balancing the budget, inoculating himself from MAGA fury. Thereby he can meet the demands of the Freedom Caucus, the MAGAs, and the Republican Regulars, all while fully adhering to his principles.

Will Speaker Johnson set his feet upon the golden road to equitable prosperity and a balanced budget, transforming the national discourse?

Mike Johnson? The nation turns its lonely eyes to you.

Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of the 200,000+ follower "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 $104T. Read Ralph Benko's reports — More Here.

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Raising taxes or cutting discretionary spending are two unpalatable, impolitic, ways of balancing the budget. There is a third, politically sweet, practical way of achieving a federal surplus.
mike johnson, gold standard
Friday, 03 May 2024 12:22 PM
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