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After his third-place finish in the Iowa caucuses Jan. 3, 2012, Rep. Ron Paul, R-Texas, told supporters that his campaign has been propelled by the issues he champions, including slashing government spending, abolishing the Federal Reserve System and withdrawing from Afghanistan.
Paul also said that "today there was a national poll that came out and they were talking about how many people supported the gold standard. How long has it been since they've taken a national poll on the gold standard? And guess what? The majority of the American people believe we should have a gold standard and not a paper standard" for U.S. currency.
First, let’s discuss what the gold standard is. Here’s a June 23, 2011, summary from the Congressional Research Service, a nonpartisan office that provides information to Congress:
Today, "the U.S. monetary system is based on paper money backed by the full faith and credit of the federal government. The currency is neither valued in, backed by, nor officially convertible into gold or silver. Through much of its history, however, the United States was on a metallic standard of one sort or another."
The pure gold standard ended in 1933, CRS said, "when the federal government halted convertibility of notes into gold and nationalized the private gold stock." Remnants persisted until the early 1970s, but then disappeared. Advocates have continued to push for reinstatement of the gold standard, in part to constrain inflation and shore up the dollar’s value.
Ralph J. Benko, a senior adviser for economics with the group American Principles in Action, which favors a return to the gold standard, wrote in a blog post earlier this year that "the value of the dollar has eroded by some 95 percent from the day my father was born until today. For the most part it has been a slow process of erosion rather than a dramatic event. That said, history records that the gold dollar held its value – over centuries — and under the gold dollar, history records that … the economy grew, on balance, more steadily and robustly than it has since the last remnants of the gold standard were repudiated."
This view is hardly universal among economists. Critics say that switching back to the gold standard would be impractical and unwise and potentially limit a government's ability to deal with recessions and depressions through monetary policy.
We'll leave the policy debate to others. What we're fact-checking is whether there’s as much public support for the idea as Paul claimed.
When we asked Paul’s campaign to point us to the survey showing national interest in restoring the gold standard, spokesman Jesse Benton pointed us to a column by gold standard supporter Benko and Andresen Blom, executive director of American Principles in Action, that appeared in the Jan. 3, 2012, edition of the Capitol Hill newspaper Roll Call.
The column mentions three surveys conducted on behalf of their organization by the Polling Co. Inc., a Washington, D.C., firm. The polls surveyed likely Republican primary voters and caucus-goers in states whose voters act first in choosing delegates for the presidential race -- Iowa, New Hampshire and South Carolina.
"Fifty percent of New Hampshire voters favor the gold standard, with more than half of those favoring it ‘very strongly,’" Benko and Blom wrote. Similar polls in Iowa and South Carolina found support for the gold standard at 57 and 51 percent.
We asked American Principles in Action for the full data on New Hampshire, which they provided. The poll of 500 likely Republican primary voters had a margin of sampling error of 4.4 percent. It asked, among other questions, "Do you have a favorable or unfavorable opinion of returning the U.S. monetary system to the gold standard?"
The poll found that 29 percent had a "very favorable" opinion and 21 percent had a "somewhat favorable" opinion, for a total of 50 percent. Majorities in the Iowa and South Carolina polls also supported the idea.
So Paul is correct on the number -- but way off on the description. This was not a "national poll" that shows that a "majority of the American people believe we should have a gold standard." Instead, it was three polls in three states, with respondents from only one party -- and even among this narrow sample, it only asked those who are active enough politically to be considered likely to participate in the upcoming primary. The survey was also commissioned by a group that supports the gold standard.
And what about national polls? There was one, but it doesn’t perfectly support Paul’s thesis.
Rasmussen Reports took a national poll of 1,000 likely voters Oct. 18 and 19, 2011, with a margin of sampling error of plus or minus 3 percentage points.
Rasmussen found that 44 percent of likely voters had a favorable impression of returning the U.S. monetary system to the gold standard, or, broken down, 15 percent very favorable and 29 percent somewhat favorable.
That’s closer to the majority mark, but it’s worth noting a few qualifiers. Among pollsters, Rasmussen, which describes itself as nonpartisan, has a reputation of producing polls that skew Republican. In addition, this poll was of likely voters, which uses a smaller pool of respondents than the default method, which is to poll all registered voters.
Most significantly, 44 percent isn’t a majority, though Rasmussen did find that 57 percent of likely voters agreed with the gold standard after they were asked this follow-up question: "Many say that adopting the gold standard would dramatically reduce the power of central bankers and political leaders to steer the economy. If you knew that returning to the gold standard really would reduce the power of central bankers and political leaders to steer the economy, would you favor or oppose returning to the gold standard?" However, framing the question like that is hardly a neutral wording of the question.
Jeff Bell, the policy director of American Principles in Action, told us that the Rasmussen poll does not show there’s a national majority in favor of the gold standard.
Bell told PolitiFact that those in favor amount to "a plurality of the voters as a whole, unless you ask modifying questions, which aren’t completely kosher in national polling."
When we told Benton, Paul’s spokesman, that the polls to which he referred us were of likely Republican primary voters in particular states -- not a national poll -- he said of Paul’s caucus-night comment, "Relax, dude, it was a rally speech to supporters, not a major policy speech or a debate."
Paul says "the majority of the American people believe we should have a gold standard and not a paper standard." But the polls his campaign cited to back up that claim surveyed likely Republican primary voters in three states -- not voters nationwide. The one national poll that addressed this question found 44 percent in favor of a gold standard, and that isn’t a majority. On balance, we rate Paul’s statement False.
Ron Paul, speech at the end of Iowa caucus night, Jan. 3, 2012 (accessed via Lexis-Nexis)
Congressional Research Service, "Brief History of the Gold Standard in the United States," June 23, 2011
Rasmussen Reports, "Public Has Mixed Views of Return to Gold Standard," Oct. 21, 2011
Roll Call, "Blom & Benko: Advocating Gold Standard Could Change Outcome of 2012 Presidential Contest" (op-ed), Jan. 3, 2011
Ralph Benko, "What is a Gold Dollar?" (blog post), Feb. 17, 2011
Ralph Benko, "October Surprise: Can Gold Be The Panama Canal Treaty Of 2012?" (blog post at Forbes.com), Oct. 31, 2011
American Principles in Action, blog post, "Advocating Gold Standard Could Change Outcome of 2012 Presidential Contest,"Jan. 3, 2012
E-mail interview with Lawrence J. White, economics professor at the New York University Stern School of Business, Jan. 4, 2012
E-mail interview with Karlyn Bowman, polling analyst with the American Enterprise Institute, Jan. 4, 2012
Interview, Jeff Bell, policy director with American Principles in Action, Washington, Jan. 4, 2012
E-mail interview with Jesse Benton, spokesman for the Ron Paul presidential campaign, Jan. 4, 2012
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