I don't know if it would even be possible to return to a gold standard.. no other country has it, & most of them don't have very solid currency, either. The dollar, with all it's problems, & deficits is still preferred. Are we in the us about to pull the rug out from under the whole world?
What would happen if the dollar bubble burst? If china and rich investors stopped buying tbills, & went to something else.. Interest rates would start to go up, trying to encourage continued investment, but there could also be a panic.. a world wide dumping of tbills. The treasury could print a bunch more money, & let the fed lend it out, keeping interest rates down, but if confidence in the dollar starts to wane, i don't see any govt action helping. They could not stop the housing bubble from bursting, how will they stop the dollar? If they squeezed the money supply & drove interest rates up, that might offset some inflation, but higher rates would kill the typical us household, and another rash of bankruptcies & foreclosures could plunge us deeper into recession.
I don't think we're out of the woods.. & even if the gold standard is not the solution, the massive debt is still a major problem & seems to be pushing us to economic collapse.. or at least currency collapse.
Some people don't seem to think the debt is a problem. We can just print more money & borrow it, & the dollar will remain solid & life will go on. If this is the case, why not give everyone in the us a million dollars, & let them live high on the hog? Let all of us go on the dole, & make it enough to live like kings. The rest of the world won't care, & they will continue to invest their assest in dollars, right? Nations that have lived beyond their means have to pay the piper at some time, just like individuals do. They can use inflation to plunder their citizens, but eventually the world money people won't lend them any more money. Once the international big money investors lose confidence, the dollar will crash. Unless we get some austerity in our budget, it seems to be unavoidable.
The economy depends about as much on economists as the weather does on weather forecasters.
Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.