On CNBC today, Carl Quintanilla asked vice presidential candidate Paul Ryan if he thought today’s disappointing jobs report would inspire a third round of quantitative easing — the monetary stimulus the Federal Reserve has engaged in off and on since the recession. Ryan replied by saying that the costs of quantitative easing “are clearly outweighing the benefits”:

RYAN: I’ve known [Fed Chairman Ben Bernanke] a long time. He and I have disagreements on these issues, but they’re respectful of one another. I think QE3 — I think QE — the costs outweigh the benefits in my personal opinion. But I think this lackluster report probably increases the likelihood… But at the end of the day Carl, all this easing is simply, in my opinion, the Federal Reserve trying to bail out bad fiscal policy. And I think the costs are clearly outweighing the benefits of this.

Watch it:

Ryan’s assessment is simply bizarre. The “costs” Ryan is referring to are presumably higher inflation rates, which he’s repeatedly warned are just around the corner ever since the Fed began using QE. Inflation has stubbornly refused to comply with Ryan’s predictions, however. Ever since the recession, it’s stayed right around the Fed’s preferred target of two percent:

And controlling inflation is only one half of the Fed’s dual mandate. The other half is keeping unemployment low. As the chart above shows, there’s been some progress on this front, but the country remains in an employment crisis.

Federal Reserve Chairman Ben Bernanke recently argued that the first two rounds of QE added as many as two million jobs to the economy. That would certainly count as a sizable benefit. Even if this is an overestimation, there’s simply no evidence of negative costs from QE that would suggest reticence from the Fed is the right course. And there are millions of unemployed Americans that suggest another crack at QE is more than called for.

During a speech Friday in Jackson Hole, Wyoming, Federal Reserve Chairman Ben Bernanke asserted that the extraordinary measures taken by the central bank during and after the Great Recession added millions of jobs to the economy. But he wouldn’t commit to doing anything more to boost the faltering recovery, even after admitting that high levels of unemployment “will wreak structural damage on our economy that could last for many years“:

Model simulations conducted at the Federal Reserve generally find that the securities purchase programs have provided significant help for the economy. For example, a study using the Board’s FRB/US model of the economy found that, as of 2012, the first two rounds of [large scale asset purchases] may have raised the level of output by almost 3 percent and increased private payroll employment by more than 2 million jobs, relative to what otherwise would have occurred. [...]

As we assess the benefits and costs of alternative policy approaches, though, we must not lose sight of the daunting economic challenges that confront our nation. The stagnation of the labor market in particular is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years.

Over the past five years, the Federal Reserve has acted to support economic growth and foster job creation, and it is important to achieve further progress, particularly in the labor market. Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.

This has been a consistent theme for Bernanke, claiming that unemployment will result in long-term damage to the economy, while refusing to take additional steps to do anything about it. As economist Chad Stone shows in U.S. News & World Report this morning, the Fed has utterly failed to meet its obligation to bring down unemployment, even as inflation, the other half of the Fed’s dual mandate, stays low:

Not all members of the Federal Reserve board are content with the central bank sitting on its hands. As Boston Federal Reserve President Eric Rosengren said, “If there’s a slowdown and you have an independent central bank, the appropriate response is to act. I think that’s exactly what we should do.”

Yearning for a return to the gold standard — the monetary system in which paper dollars are backed by, and can be exchanged for, a fixed amount of gold — has been on the rise in the Republican Party. Ron Paul’s long quest for a new gold standard reached new prominence with the latest presidential campaign, and several of his fellow GOP candidates attended events lauding idea. Major GOP politicians have either endorsed a gold standard or stepped up to the edge of doing so, and the idea has popped up in state party platforms. Now The Financial Times reports that the gold standard is on the verge of becoming national Republican policy:

Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar and gold… A commission would have no power except to make recommendations, but Mr Fieler said it would provide a chance to educate politicians and the public about the merits of a return to gold. “We’re not going to go from a standing start to the gold standard,” he said.

In 1981, President Ronald Reagan created a similar commission to look into the gold standard, though it settled on supporting the current monetary system. The Republicans’ 1980 platform blamed inflation on the abandonment of the gold standard, and their 1984 platform said “the gold standard may be a useful mechanism.”

Unfortunately for the GOP, there are huge policy problems with a gold standard. As Fed Chairman Ben Bernanke pointed out, there isn’t enough gold to back the supply of money the economy actually needs. Worse, a gold standard would shackle monetary policy’s ability to respond to economic downturns. Interest rates could not be lowered to combat recessions or high unemployment. Instead, they would be driven by the price fluctuations of the gold supply, regardless of the needs of the broader economy.

The argument for a gold standard doesn’t make sense historically, either. After the Great Depression, there was a very strong correlation between when countries abandoned their gold standards and when their recoveries began. And what followed the complete end of the U.S. gold standard in 1971 was the longest period of low and stable inflation in modern times:

Following the rise of Rep. Paul Ryan (R-WI) to the vice-presidential slot on the Republican ticket, most of the discussion has focused on the content and consequences of the budgets he engineered for the House GOP. But Ryan has also been a vociferous critique of the Federal Reserve and its Chairman Ben Bernanke. Given the Fed’s considerable power to effect the health of the economy and the level of employment — and its ongoing reticence to sufficiently act on that power — it’s worth calling more attention to Ryan’s views on monetary policy, which are every bit as radical as his views on government taxation and spending.

Ryan has repeatedly (and wrongly) predicted inflation. Throughout the recession Ryan reacted to monetary stimulus by repeatedly warning that inflation is just around the corner. That inflation remains at near-historic lows while unemployment has hit near-historic highs has apparently left the vice-presidential nominee undeterred. Ryan even called on the Fed to raise interest rates to combat this predicted inflation, even though increased rates would add one more drag on the already struggling economy.

Ryan wants to end the dual mandate. In 1978, Congress passed the Humphrey-Hawkins Full Employment Act, which directed the Fed to concern itself equally with keeping prices stable and unemployment low. Ryan sponsored a bill to repeal Humphrey-Hawkins and direct the Fed to concern itself solely with inflation. This reinforces the point that Ryan wants to put a thumb on the scales in favor of price stability and ignoring the need to lower unemployment. But Ryan’s argument is also based on bad history: As The Atlantic’s Matthew O’Brien notes, the period since the passage of Humphrey-Hawkins has been one of both unusually low inflation and unusually low fluctuations in the level of inflation.

Ryan is a hard-money crank. In 2009, Ryan called for the U.S. dollar to be benchmarked to a commodity standard. This is essentially a gold standard, except the gold is replaced by an alternative basket of commodities. It would also carry all of the same problems. It would shackle the Fed’s ability to assist the economy in a recession or depression. It would also drive interest rates up or down depending on how prices of those benchmarked commodities behave, regardless of whether such rate changes make sense in the context of the overall economy.

Ryan’s monetary policy hails from Ayn Rand. ThinkProgress has already reported on Ryan’s professed infatuation with the radical right-wing novelist, and how her stances have influenced his budget policy — an infatuation he has since tried to disavow. Yesterday, Slate’s Dave Weigel caught a linkage between Rand’s writings and Ryan’s monetary views as well. In 2005, Ryan told the Atlas Society, “I always go back to, you know, Francisco d’Anconia’s speech, at Bill Taggart’s wedding, on money when I think about monetary policy.” That speech is from Rand’s novel Atlas Shrugged, and features one of her protagonists praising gold as “objective value,” and condemning paper money as the destruction of value and the tool of “looters.”

As economist Mark Thoma wrote, “I don’t understand why someone with such a clownish views is lauded as a policy wonk.” But the Republicans’ presidential candidiate, Mitt Romney, has also shown a good deal of sympathy with Ryan’s views — views which, as O’Brien dryly notes, basically boil down to worrying that “the Federal Reserve will try to bring unemployment down.”

The Federal Open Market Committee — the group that decides monetary policy at the Federal Reserve — will conclude its latest round of meetings today. The Fed is under growing pressure to do something to aid the still struggling economy, perhaps even a third round of quantitative easing. A statement released this afternoon will announce the Fed’s intentions going forward.

If the Fed does decide to act, it’s almost a certainty that Republicans will cry foul. Ever since the recession, Republicans have regularly denounced the Fed for taking steps to help the economy, warning that runaway inflation is just around the corner. But these predictions have been repeatedly discredited by the path inflation has actually taken. ThinkProgress has the video report:

Since the 2008 financial crisis, the rate of conventional inflation only briefly touched 4 percent before falling back below 2 percent earlier this year. Core inflation — which removes energy and food prices in order to smooth at noise in the measurement — finally got just above 2 percent in late 2011 and has plateaued since. Indeed, looking back over the last few decades, the country’s inflation rate since the 2008 recession has been at near-historic lows. Certainly far below the 12 to 15 percent inflation the country experienced in the 1970s and 1980s — presumably the memory that’s driving the GOP’s warnings.

Because inflation is fundamentally the result of a growing economy, most any monetary policy that seeks to boost growth out of a depression will require a tolerance for at least temporarily higher inflation levels in order to be effective. But the Fed’s insistence on treating 2 percent inflation as a ceiling rather than one end of a balance between price stability and job growth has left the country mired in high unemployment.

The GOP’s inflation fear-mongering and outright political pressure on the Fed certainly hasn’t done anything to help with that imbalance. Last year some Republicans went as far as introducing legislation requiring the Fed to ignore employment levels entirely and just focus on price stability when deciding monetary policy.

A favorite line of Republicans in the 2012 GOP presidential primary has been to claim that President Obama is devaluing the American dollar. The surging former Sen. Rick Santorum, for instance, ranted that Obama “has devalued our currency,” while Rep. Michele Bachmann (R-MN) has said that, “in the last two years of the Obama administration, if you pull a dollar out of your pocket, you have lost 14 percent of the value of that dollar…A dollar in 2011 should be the same as a dollar in 1911. A dollar should be worth a dollar.”

Texas Gov. Rick Perry (R-TX) claimed in a debate that “it is a travesty that young people in America are seeing their dollars devalued.” Mitt Romney also chimed in to say that “people will not invest in this country and create jobs in this country for the American people if they don’t have belief in our currency.” But there’s one big problem with this storyline — it isn’t true:

Moves by the Federal Reserve to flood the world with dollars are doing little to dent the currency’s value, bolstering the appeal of U.S. assets at a time when the government needs the support of foreign investors the most.

The U.S. Dollar Index (DXY) has appreciated 13 percent from a record low in March 2008 even as the Fed kept interest rates at about zero and printed cash to buy $2.3 trillion (FARBAST) of Treasury and mortgage-related bonds, and is little changed since 1991. The International Monetary Fund said Dec. 30 that the greenback’s share of global foreign-exchange reserves rose in the third quarter by the most since 2008.

In fact, it was the George W. Bush administration that “was associated with a large and persistent fall in the value of the dollar.” As the Big Picture’s Barry Ritholz put it, “A fall [in the dollar index] from 121.02 in July 2001 to 70.69 in March 2008 — Now THATS a dollar collapse.” Of course, no Republicans were making headlines screaming about devaluing the currency then.

It’s not only those seeking the presidency that are using this line. As Bloomberg News noted, the dollar’s performance “counters officials in China, Germany and Brazil who said that the Fed’s policies were weakening the dollar. House Speaker John Boehner of Ohio and three other Republicans sent Fed Chairman Ben S. Bernanke a letter in 2010 expressing ‘deep concerns’ about the central bank’s plan to print money to buy bonds, saying it risked weakening the dollar.”

Claiming that he devalued the currency is just one more lie in a host of lies the candidates are propagating regarding Obama’s economic record. But it bears so little resemblance to reality that no candidate who uses it should be taken seriously when it comes to economic policy.