Fed News Friday: My Interview with GOP Candidate Gary Johnson on Monetary Policy and the Federal Reserve: “The solution is to stop printing money.”

This week I had the opportunity to participate in a one hour telephone press conference with GOP presidential candidate Gary Johnson, the former two-term governor of New Mexico. As always, this article should not be construed as a political endorsement, but merely reporting and commentary upon the politics of monetary decisions, and an absolutely necessary act of journalism to fill a glaring gap in media coverage for a candidate who by all objective reckoning deserves at least as much coverage as Rick Santorum or Jon Huntsman, but gets far less. This Wednesday, Gary Johnson lead into his press conference with monetary policy and made it the focus of his talk. He had the opportunity to elaborate further on his views toward the Federal Reserve as he answered follow up questions.

Here’s what he said:

On monetary policy:

“I am coming from a balanced budget position from the camp that believes that we are on the verge of a monetary collapse, which is when our dollar won’t be worth anything. And the last major example of a monetary collapse I can think of would be Russia, and its currency became worthless almost overnight. We are not immune to the mathematics of spending money that we don’t have. The solution would be to stop printing money.”

On its relationship to fiscal policy and politics:

“I am promising to submit a balanced budget in the year 2013 and I am promising to veto legislation where expenditures exceed revenue. This budget document I am going to submit will be a publicly scrutinized and hotly contested bill because it will reduce federal spending by 43%.

Will Congress override my vetos and pass its own budget? Probably. But after the president has submitted a balanced budget and vetoed any budget where expenditures exceed revenue, after that process happens, the budget that eventually does pass will likely be in a scenario that produces the most fiscally conservative budget possible.”

On The Federal Reserve, Fed Transparency, and End the Fed:

“I would, of course, abolish the Federal Reserve if given the opportunity, but ending the Federal Reserve is not the cure-all. If we ended it tomorrow, the Treasury could start printing money. I think the issues that surround the Federal Reserve really have to do with transparency, I think there should be 100% transparency. I think they should revert to their original mandate, which is price stability, which means a strong dollar. I think that interest rates are currently zero because if they were any higher than that, we would experience a monetary collapse… and I think the Federal Reserve is the reason behind all of what is happening [to the economy].”

On the importance of political philosophy:

“I would agree with that premise [that the GOP is moving toward libertarianism]. I describe myself as a ‘classical liberal.’ If you Wikipedia that, it’s going to say that a classical liberal is someone who believes in less government, period. The best thing a government can do for you is empower you as an individual. I think most Americans are classical liberals.”

Gary Johnson does make an excellent point regarding the Federal Reserve, even if it were abolished, Congress could authorize the Treasury to print money and it could pursue the agenda of inflationary fiat currency. Even with the end of the central bank, the fight for sound money in America would not be over. That’s something I had not considered before and I was startled by its implications.

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