Rep. Michele Bachmann (R-MN) officially kicked off her presidential campaign this week with a three-state tour through Iowa, New Hampshire, and South Carolina. Her South Carolina swing culminated in a town hall event Wednesday evening at Winthrop University in Rock Hill. A thousand people came out to see the Congresswoman field softball questions like “Where do you stand on abortion?” from audience members and via Facebook, with 500 people spilling into an overflow room.
No one questions Bachmann’s conservative bona fides, but when she tried to appeal to goldbugs in the audience, she seemed more uncertain of her footing. In response to an audience question, Bachman proudly said she has signed on to Rep. Ron Paul’s (R-TX) plan to audit the Federal Reserve. In an apparent attempt to prove she’s on board with people who believe gold is a more stable and reliable form of currency than the dollar, she then made a series of laughably uninformed economic claims:
BACHMANN: The shorthand way of describing to you what quantitative easing is is a license to print money without any value behind it…In the last two years of the Obama administration, if you pull a dollar out of your pocket, you have lost 14 percent of the value of that dollar. That means the federal government has stolen that money from you… They’ve been printing essentially valueless money and flooding it into the money supply. I don’t stand for that. A dollar in 2011 should be the same as a dollar in 1911. A dollar should be worth a dollar.
A dollar in 1911 had the same buying power as slightly more than $23 today. Bachmann doesn’t seem to understand that the dollar’s value naturally changes over time and accompanies economic growth — and that’s a good thing. Furthermore, the U.S. experienced inflation even when it was on the gold standard (which ended in 1971). Additionally, gold’s value isn’t fixed and also fluctuates over time — for instance, price of gold is currently at a record high.
So being on the gold standard and keeping a constant dollar value are inconsistent proposals. To achieve 0 percent inflation — which is itself an absurd idea, even according to Republican economists — a country would need an independent central bank.
As we have reported, gold bugs in the Tea Party have been playing an important role in the early states, and have made returning to the gold standard a litmus test for GOP candidates. Republican politicians have increasingly pandered to the far-right base by endorsing loony gold schemes, such as when presidential candidate Tim Pawlenty derided the U.S. dollar as a “fiat currency” — “a signal to a narrow constituency of voters who believe that America’s woes began when it abandoned the gold standard.”