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A different sort of argument is made in this paper: http://www.monetary.org/yamaguchipaper.pdf
and on this website: http://www.monetary.org
Now, I'm no more an economist than a physicist or an astrologer, and am by no means clear which of those two comparisons is more apt. But I know that when a small group of private gazillionaires unaccountable to public censure is freed to do what it wants, it usually tries to screw everyone else to its own benefit. And I know that even more than the United States Senate, that description fits the Federal Reserve. So, I don't feel I need a theoretical calculation to prove to me that a better chance at a decent monetary policy would come from bringing monetary decisions under something approaching public control.
It's also clear that deficits could be eliminated, even without progressive taxation, purely by reducing military spending to sane levels, a glaringly obvious point often avoided by both rightwing pseudo-spending hawks and liberal deficit defenders.
The paper linked above argues that the gold standard failed in the 1930s, the gold-dollar standard failed in 1971, and the dollar standard will fail, in all likelihood prior to either John Boehner or Barack Obama favoring a decrease in military spending. Then there's this:
"Even in the scenario of debt crisis due to the runaway accumulation of debt fails to be observed in the near future, still there exist some ethical reasons to stop accumulating debts. First, it continues to create unfair income distribution in favor of creditors, that is, bankers and financial elite, causing inefficient allocation of resources and economic performances, and eventually social turmoil among the poor. Second, obligatory payment of interest forces the indebted producers to continue incessant economic growth to the limit of environmental carrying capacity, which eventually leads to the collapse of environment. In short, a debt money system is unsustainable as a macroeconomic system."
The alternative proposed is a non-debt public money system. If such a system really can maintain checks on limitless money-invention and spending, while avoiding the disasters of plutocracy and environmental collapse, dethroning "growth" and raising up the ideal of sustainable prosperity decoupled from international competition, why would we not consider it? Why, after all, should we get together collectively as a government and invent money, but pay interest on that money to a gang of pirates who send their kids to summer camp on private jets while pursuing a prison and poorhouse economy for the rest of us?
In this vision of a decent society, individuals and businesses could still go into debt. We just wouldn't be obliged to do so in order to eat or visit a hospital. And the terms of loans would not be legislated to suit the wishes of the usurers.
'Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.'