“Gold vs. nominal GDP targeting” would seem like a pretty wonky discussion to most people. So, I will try to put it in different terms: John F. Kennedy vs. Richard Nixon.
When John F. Kennedy promised to “get the economy moving again” in the 1960 presidential election, the U.S. was in a recession officially dated from April 1960 to February 1961. Kennedy didn’t know, at first, how he would achieve his promises of 5% real GDP growth. Eventually, as described in Larry Kudlow and Brian Domitrovic’s recent book JFK and the Reagan Revolution: A Secret History of American Prosperity (2016), he landed on what I call the Magic Formula: Low Taxes and Stable Money. The low taxes took the form of a major tax reform posthumously passed in 1964. Stable Money was provided by the Bretton Woods gold standard of the time, which kept the value of the dollar at $35/oz., and which Kennedy actively defended against the “soft money” notions of his academic advisors.
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