Perhaps this is somewhat motivated by Gingrich's recent sop to Paul voters - where he advocated forming a 'Gold Commission' and investigating a return to the gold standard or at a minimum a mandate for the Fed to focus on 'price stability'.... To be fair, Perry (whom I support) made a similar mistake earlier on in the campaign, criticizing the Fed for it's monetary policy from 08-foreward.
Or perhaps this is just a combination of a series of discussion posts on the subject, and with it a general concern that people really don't know what they're wishing for....
This is NOT advocacy of Keynesian economics - contrary to what some folks (mostly those who got their econ knowledge out of a box of cracker-jacks) claim when confronted with any economic thought that disagrees with theirs think... Rather, as I'll point out below, it shows how the American free market has rejected hard money & we should not buck this trend...
What it all comes down to, is this: So-called 'Hard Money' - defined for the purpose of this post as 'a monetary policy that places a static or increasing value of currency over all other economic concerns' - is something that we often find being advocated in conservative circles, perticularly when there is a high-spending, high-borrowing liberal administration in office (like, well, now).
The general theory, it seems, is that a 'soft' or 'loose' monetary policy - something the US has maintained since the end of the Reagan Administration - enables government spending and borrowing while harming 'good' average-citizen Americans' savings. Thus, a 'hard' or 'tight' monetary policy would restrain government spending by maintaining a money-supply too small for government to continue 'borrow & spend' policies.
Advocates of hard money will often refer to an 'Inflation Tax' (claiming that inflation transfers wealth from the citizenry to the government), or accuse the Federal Reserve of 'enabling' a liberal administration.
The problem with this is quite simple: In order for it to be true, the American public & American businesses (who are supposedly harmed by 'loose money') would have to actually, well, SAVE MONEY (or more properly, hoard money (think cigar boxes full of $100s) since modern 'saving' generally consists of placing money in interest-bearing accounts or return-generating investments).
During the 'boom years' leading up to the 2008 'bust', the US savings rate was below 2% - that is, Americans 'saved' less than 2% of their income. And of that 2%, even less was held as cash for long periods of time - most 'saved' money was put into interest-bearing accounts or otherwise invested. Now, during 'the bust years', this rate has still risen to just under 5% - so even in hard times, Americans simply do not save their money - we spend it all - and in the best times, when we have the most 'freedom of choice' to save or spend, we spend even more & save even less.
Further evidence of the free-market-chosen bias against savings can be seen in the structure of demand-deposit accounts - a 'savings minded' consumer body would demand high interest rates on such accounts, and accept minimum balance requirements & fees on money removed from the account & services that enable easier withdrawal/spending as the 'price' of such. This is how many banks used to operate. Today, however, consumers want easy and instant access to their money for spending purposes - free checking, free debit cards, no-minimum-balance - AND they are willing to accept lower interest rates in return.
This presents a problem for the 'Hard Money as a check on Government' theory: Said theory only works when the common citizenry and the government engage in opposite monetary behaviors - eg when citizens save cash & the government spends borrowed money profligately.
In a society like ours, where the government's abysmal fiscal discipline is dwarfed only by the even worse fiscal discipline of the citizenry, 'Hard Money' cannot be used to constrain government spending for one simple reason: Any monetary measure that even mildly restricts the supply of money to government will simultaneously suffocate the citizenry, as 'We the People' are far more over-extended & have far lower credit lines than Uncle Sam. Reducing the money-supply merely cuts off OUR ability to spend as individuals - government is the 'last domino to fall' in that chain, rather than the first.
The next issue with this policy, is that while they don't know enough about economics to understand it, most Americans actually expect inflation and consider something to be 'wrong with the economy' if there isn't any.
Why do I say this? Simple: While Most Americans have been raised with the premise that 'Inflation is bad' (largely due to the Federal Reserve making sure that there has been no sustained DEFLATION since the Great Depression), they expect certain things in a good economy - such as annual or quarterly salary raises despite no increase in productivity or job-skills, a rising GDP, and a constant increase in the value of real-estate & other non-depreciating assets - that can only happen if the money-supply is expanding and the value of money relative to goods is going down
In a hard-money economy, how could your boss give you a raise? Simple, he can't - your work was worth $X/hr last year, and it's still worth the same - price stability, after all, applies to labor as well as consumer goods. Same for home prices - it was worth $x-thousand when you bought it, and with price stability will (all other things being equal) be worth the same when you sell it (further, due to 'hard money' policies, you pay much higher interest rates over the duration of the loan). And how exactly is the economy & GDP supposed to expand, if the available supply of money cannot?
This may sound 'wrong' - especially to the segment of the Right that sees 'Bringing back the 1950s' (complete with pensions & life-long single-employer careers in manual-labor manufacturing, above-poverty-level civilian jobs for HS barely-graduates, and cash for everything) as their primary political and economic goal... But the people of this country don't want that life, so why should we force it on them?
Constrain government spending by actually (gasp) electing politicians who will vote to spend less at budget-time - NOT by bankrupting the citizenry with a static (or more-likely insufficient) money-supply!
If the citizenry did save cash, and the government really was the sole beneficiary of inflation, then the 'hard money' position would make sense. But the reality is that average Americans borrow & spend so much, and save so little, that they are far more over-extended than the government, and would be the first to suffer under 'hard money'.