a keynesian will say that if you need to stimulate the economy, government spending will help get us out of crises.
the problem that arises with a collateralizing program, like the gold standard is that the monetary supply would be inherently confined by physical discoveries and captures of gold. If it is the Great Depression and you cannot find any more gold, you'd be pretty screwed.
The argument is that if it's a strict commodity currency, there's no Great Depression. No cheap money boom, no depressions. Free market interest rates naturally rise and fall to control the extremes of the business cycle.
a keynesian will say that if you need to stimulate the economy, government spending will help get us out of crises.
the problem that arises with a collateralizing program, like the gold standard is that the monetary supply would be inherently confined by physical discoveries and captures of gold. If it is the Great Depression and you cannot find any more gold, you'd be pretty screwed.