No Gold Lessons from the Great Depression
- Avoid Great Depression-like situations in the first place. "Austerity" leads to disaster – in the 1930s, in 1980s Latin America, and in Europe today.
- Take nonmonetary steps first. If preceding administrations have been blowing up the economy with "austerity," maybe you should reverse these policies. Or, maybe deposit insurance is the immediate fix.
- If you find yourself in a once-a-century crisis of 1932-1933 proportions, and you think that devaluation might help, then go ahead and do it. But stay on a Gold Standard system.