The ideal ratio Prior to 1913, the gold standard typified exchange rates for monetary transactions and was the basis for enumerating government spending (budgets). ADVERTISING Fiscal budgets, or total government spending, were typically 5 percent of the gross domestic product
The ideal ratio
Prior to 1913, the gold standard typified exchange rates for monetary transactions and was the basis for enumerating government spending (budgets).
Fiscal budgets, or total government spending, were typically 5 percent of the gross domestic product (excepting times of war) from President George Washington up until 1913.
Fiat currency started with Woodrow Wilson instigating the Federal Reserve, and was enhanced by Franklin D. Roosevelt’s taking away the people’s rights to possess gold and his decision to further reduce the amount of gold in paper currency by 75 percent.
The final death of gold standard came by President Nixon’s repudiation of the gold standard in 1971.
Since 1971, we have been in a 100 percent fiat currency period, along with the rest of the world. My hypothesis is that in the long run, a stable capitalist/republican government requires a constant and repetitive objective of targeting spending (proposed budgets) at 5 percent of the total of the previous year’s GDP.
I believe that gold-backed currency, which was used exclusively for 125 years in the U.S. until 1913, resulted in an extended period that had no catastrophic economic collapse; government spending for the entire period approximated 5 percent of the GDP. Thus, I conclude that maximized government efficiency occurs when spending is not more than 5 percent of the GDP.
I then further hypothesize that government spending (budgets) maintained at a maximum of 5 percent of the GDP would constitute a stable capitalist economy in a republican form of government, whether the dollar was backed by gold or a basket of valued products, be it silver, iron, copper, wheat, oil or whatever.
A none-gold currency hypothesis is just that — not proven, but just a maybe. Currently, there are no rules on the amounts of proposed government spending (budgeting) there should be in relation to the previous year’s GDP.
Presently, Congress and the president budgets in a manner based seemingly on raw feelings with few measurable objectives, rules or guidelines.
David Johnson
Hilo
Hope for Ka’u youth
In my mind, proper learning begins in the classroom. I still cherish the times I had in band and shop at Ka’u High School.
I can imagine the proud feelings the Honokaa High School jazz ensemble must be feeling with their travels with the band. It is something nobody can take away from them.
I also cherish the summer classes I took at Kamehameha Schools-Kapalama during summer session when enrollment is opened up to the public. Classes such as speed reading and art prepared me for college.
I strongly feel the Ka’u District has a lot of potential if the proper education is taught at Ka’u High School. Classes such as tourism, Hawaiian studies, solar technology, band and agriculture should prepare Ka’u High School students for the real world.
Dean Nagasako
Pahala
