Predictably, the technocrats who favor an Ivy League uber class directing everyone's lives are opposed to it. Martin Wolf of London’s Financial Times was so angry he could barely spit out the words (I don't link to FT since they require you to subscribe to read anything). CNN blasted Cruz, saying that unemployment was higher when we had the gold standard, implying it would be again (without justification or even a look at if it's reported the same way), and saying that "while the Fed's actions during the current crisis have many critics, almost everyone agrees America would be much worse off if the Fed had not acted at all"; apparently not seeing anything at all illogical in that comparison. Having the Fed acting or not acting is a completely different question than a gold standard; since having a Federal Reserve Bank existing at all isn't guaranteed with a gold standard, and it's entirely possible the conditions that caused the '08 collapse couldn't have existed with a gold standard. CNN then laughingly said "Europe and Japan are actually following America's lead in an effort to revive their economies", getting it exactly backwards because Japan has been doing just what the Fed has been doing since 1990, leading them by 18 years, without reviving their economy. The Washington Post pours on tons of more criticism, but doesn't seem to understand what a gold standard means. For example, they present a plot that claims to show how much prices would go up if we had stayed on a gold standard since the 1930s, but they're using the rise and fall in gold prices to derive that. If gold was the reference, those last 80 years would have been quite different.
Just as predictably, libertarians, gold bugs, and other opponents of Keynesian ideas offered the other side.
Cruz is on strong ground — economically, historically, and politically — in his advocacy of the gold standard. The claim “The worst idea in the presidential debate: a return to the gold standard” is, simply, unsupported by the facts. While the gold standard is not, nor is it claimed to be, perfect — no system is perfect — it has an impressive track record. Readers deserve to have the evidence objectively reviewed rather than the topic ridiculed. [Emphasis added - SiG]In 1971, when Nixon closed the gold exchange window, it was a fundamental transformation of the economy. Instead of being based on a unit of gold that could, at least theoretically, be looked at, touched, and redeemed for, a dollar became an instrument of debt. In fewer words, a dollar went from being an asset to being someone's debt. Before this change, before a dollar could be lent out, it had to be earned by someone by creating something of value, and then saving it. When that dollar was put in the bank, and then lent out, its ownership changed hands, and the same thing happened when it got paid back to the bank. Now, a bank simply creates a dollar to loan out of thin air. It comes into existence when it's loaned out and winks out of existence when it's paid back to the bank.
The gold standard correlates with the American Dream of achieving decent middle class affluence through hard work far better than middle class affluence correlates with the Federal Reserve Note standard. Sen. Cruz’s advocacy of the gold standard is impeccably respectable.The gold standard is the best idea in the 2016 presidential debate.
While it's true that being on a gold standard doesn't require a balanced budget, having a fixed amount of money available to lend (instead of infinitely creating new money) would make lenders more careful with their lending. Perhaps they'd loan money for things that really built material assets and not just flood it into Wall Street to pump up stock prices? In a perfect world, the Federal Reserve would be given termination notices and told to find honest work, or at least go work on Wall Street. With no central bank to set interest rates, and a finite money supply, rates would certainly be different than the current Zero Interest policies and the free market would need to discover what rates need to be. Unfortunately, with no endless free money, the market would certainly reset, and the drop to Dow 6000 I've been seeing for years (example) would probably happen. The dreaded "Creative Destruction" phase of the economic cycles that the Central Bankers have spent trillions of dollars in attempts to hold off, would happen.
The fact that there's uncertainty and possible pain down this path means a return to a gold standard is highly unlikely, no matter who advocates for it. In addition, all of the cronies who are running everything together with their DC peg boys, including the Federal Reserve itself, what many call the "Deep State", would fight it to the death because it would be the end of their power. In particular, they might well fight it to the death of whomever advocates the gold standard. And that might well work. For now. After the collapse when the new rulers are trying to establish a new society, they will probably have a dimmer view of central banks, and be more inclined to consider a gold (or commodity) standard.