Here's a
video with a cut around 0:30 and a less altered
video which retains the cut at 0:39. If the second video is 'the real deal', then it hasn't increased my confidence much nor has Paul eagerly clarified the point much further or to my liking. I respect his opinion that evolution is and should not be a political issue, but I faithfully hold that a creationist tendency is evidence of unintelligent design.
In the interview reddit did they ask him the same question. He gives a more complete answer. I dont know exactly in what part it is because I watched it time ago, but it starts here:
http://www.youtube.com/watch?v=iKAaps6mFYkYes, I think I grok the gist. I've since read and heard Paul's gloss over its implemented. Rather than tear down the Fed, he would simply decriminalize alternate currencies. I posit that such a declaration would probably have the same effect. It would in practice be a default on both UST and USD. Maybe Ron Paul discusses the transition more thoroughly in End the Fed. Are there documents discussing this transition on the web?
I have not read End the Fed. Ive heard is very good but I tend to read more academic books. But if you want an example it is exactly how Andrew Jackson got rid of the Second Bank of the USA (the third central bank of the USA). He removed the charter and competition appeared. In two years the bank was broke. And yes, it has the added benefit that the Federal Reserve notes, the present dollars, would devaluate and the debt would disappear. Its and added benefit.
Would the US government still exclusively require dollars for taxation?
Yes, if you think about it allows for more control of the people over the government, because people notice taxation, but inflation is very stealth. So the government only financing itself through taxes allows for more citizen control.
Would the government continue to deal only with the dollar in all trade?
Ideally you could pay taxes in anything you earned. This is nothing extrange, during the majority of the history of humanity its been this way.
If not, imagine if you will, the US government passes a law that makes gold redeemable for all debts public and private. It would have to be floating because without a global gold seizure, no single entity could enforce a fixed price. Since the government can not back the existing paper up with any existing scarcity, it might as well allow any currency as you and Paul suggest. I'll stick to gold for simplicity.
Well, I dont support setting gold (or anything else) as legal tender. Gold has qualities to be a good currency and is used as money on its own, it does not need the government. But in the case you proppose, the government would need to set a dollar note/gold ratio adequate for the reverse of gold it has (basically the price of gold would skyrocket).
I don't see how one could gently introduce this policy while keeping the dollar relatively stable from free fall. Any fool with eyes to see will trade his dollars for gold as they see an exodus of the dollar and price inflation in dollars. I take it as a given that this process only needs to start a tiny bit before it rapidly accelerates given the one-sided instability (though since I'm not yet articulating a defense I welcome a lively argument to the contrary). I posit the dollar will be good as worthless before the bill is even passed into law and hell would become paradise.
Again, look at history. Andrew Jackson did it and it took two years for the old central bank to go bankrupt. And in those two years people had migrated to other notes. For me, removing the central bank charter and allowing competing currencies is the best and most smooth solution.
The gold price today reflect a fear of some such a scenario, but I'm quite sure hyperinflation (which is in fact a gradual process) will be the catalyst of a new currency, not the symptom of such policy. Alternatively, if the US government stopped printing money, defaulted on most debt, and encouraged the use of scrip, would it be any cozier?
Yes, if Ron Paul or someone similar does not get elected the keynesian maniacs that are in power will keep abusing the currency until it eventually disappears and they will be forced to produce sound money.