Judy Shelton to the Federal Reserve Board of Governors

While some would like to paint Mrs. Shelton’s views as radical, what is more radical is the view that perpetual inflation is somehow necessary for economic growth. Although the Federal Reserve’s actual power to “fix” interest rates and the value of the dollar is wildly exaggerated, it would nevertheless be extremely useful to have someone on their board who can remind them that the inflationary monetary policy they promote is literally stealing the future purchasing power of every American’s savings and investments.

As FreedomWorks Foundation Vice President John Tamny has written, “Shelton supports the gold standard precisely because she doesn’t support the theft of our work effort. She understands that devalued money robs the worker of the fruits of work.”

Tamny writes, further, that “Some will say devaluation during slow economic periods boosts economic growth, which is just a reminder that some haven’t the faintest clue about what powers economic growth. Devaluation certainly doesn’t when it’s remembered that Americans are the U.S. economy, and Americans earn dollars. Alas, investment is what drives economic growth, investors are delaying consumption of dollars now in the hope of attaining more in the future, which means devaluation is a huge tax on the very investment without which there is no growth.”

If her past record is prologue, Shelton would provide a diversity of opinion in an institution that desperately needs it. A stable dollar, the value of which could be relied upon by investors and savers into the future, was once considered common sense. That it is considered radical now is a sad commentary on the state of present-day economic literacy, and proof that Mrs. Shelton’s voice is sorely needed inside the Fed.