The gold standard is also inconvenient for progressive policies: it removes the floating of currency exchange rates, which tends to act as an automatic stabilizer. See the Eurozone to see how this played out over the last few years, since the Euro has the same technical effect on the member countries. If a country like Spain had had its own currency with a floating exchange rate, that currency would have automatically devalued against other European currencies, which would have acted as a big boost to the Spanish economy via increased exports. Instead, Spain got atrociously high unemployment.
The gold standard is just inconvenient, period. It restricts the policy space for governments. This can be a good thing, but in democracies - where the government mostly does act in the interest of the population[0] - I would say that it mostly ends up being a bad thing.
> FDR temporarily unlinked in 1933 and we had the great depression
Yes, both of these things happened. The important thing is the order in which they happened: The great depression happened first. Abandoning the gold standard was a somewhat late and indirect reaction to that. In fact, countries recovered roughly in the order in which they abolished the gold standard (see e.g. [1] for references).
Edit to add: As to the history of coin debasement, I genuinely wonder whether historians have got their causality right. There appears to be a self-reinforcing belief that historically, coin debasement always caused inflation. At a superficial glance, that story seems to fit the data, hence the self-reinforcement. However, there are some episodes in the Roman empire where it seems plausible that causality could have run in the other direction: Inflation came first, and the coins ended up being debased to match the reality of how much (or how little) they were still worth.
I know that gold bugs must deny the mere possibility of such a "reverse causality" on quasi-religious grounds, but a sober look at the data leaves quite a lot of room for this. Some of the inflation values use price data that is almost a century apart, and a 5x increase in price over a century is actually relatively modest inflation on a year-over-year basis, if you take the exponential nature of inflation into account. This level of inflation could easily arise endogenously, say out of modest wage-price pressure effects. Changing the coins to adjust to a new reality after a century is then merely reasonable administration.
This is not to say that the story of "bad emperor flooded the market with coins to fund wars" never happened. It's just to say that perhaps history was sometimes more complicated than what fits into a bug's brain.
[0] Yes, yes, come at me with your cynicism; and indeed modern democracies are imperfect. But compare today to the middle ages without prejudice, and you'll see what I mean.
The gold standard is just inconvenient, period. It restricts the policy space for governments. This can be a good thing, but in democracies - where the government mostly does act in the interest of the population[0] - I would say that it mostly ends up being a bad thing.
> FDR temporarily unlinked in 1933 and we had the great depression
Yes, both of these things happened. The important thing is the order in which they happened: The great depression happened first. Abandoning the gold standard was a somewhat late and indirect reaction to that. In fact, countries recovered roughly in the order in which they abolished the gold standard (see e.g. [1] for references).
Edit to add: As to the history of coin debasement, I genuinely wonder whether historians have got their causality right. There appears to be a self-reinforcing belief that historically, coin debasement always caused inflation. At a superficial glance, that story seems to fit the data, hence the self-reinforcement. However, there are some episodes in the Roman empire where it seems plausible that causality could have run in the other direction: Inflation came first, and the coins ended up being debased to match the reality of how much (or how little) they were still worth.
I know that gold bugs must deny the mere possibility of such a "reverse causality" on quasi-religious grounds, but a sober look at the data leaves quite a lot of room for this. Some of the inflation values use price data that is almost a century apart, and a 5x increase in price over a century is actually relatively modest inflation on a year-over-year basis, if you take the exponential nature of inflation into account. This level of inflation could easily arise endogenously, say out of modest wage-price pressure effects. Changing the coins to adjust to a new reality after a century is then merely reasonable administration.
This is not to say that the story of "bad emperor flooded the market with coins to fund wars" never happened. It's just to say that perhaps history was sometimes more complicated than what fits into a bug's brain.
[0] Yes, yes, come at me with your cynicism; and indeed modern democracies are imperfect. But compare today to the middle ages without prejudice, and you'll see what I mean.
[1] http://www.nber.org/chapters/c11482.pdf