National Review: Not Worth a Dollar
Writing for the National Review, Brian Bolduc explores the feasibility of introducing two new currencies, gold and silver, to compete with the dollar:
Since 1913, the dollar has lost over 95 percent of its purchasing power. Why? Because the Federal Reserve, which Congress established that year, has printed more money than necessary.
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Or so skeptics claim. Many tea partiers agree — so much so that they’re spearheading an effort to introduce two competing currencies into the money supply: gold and silver.
The Constitution forbids states to coin money. In Article I, Section 10, however, it reads, “No state shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts.” Jeff Bell, policy director of American Principles in Action, argues that this passage authorizes states to recognize gold and silver as legal tender.
Colorado was the last state to do so, in 1893. But Utah, taking “a precaution against further deterioration in the dollar,” has revived the endeavor, Bell says.
In March, Gov. Gary Herbert (R.) signed into law the “Utah Sound Money Act.” Drafted by attorney Larry Hilton, the statute declares gold and silver legal tender in the Beehive State, makes trading in these metals strictly voluntary (i.e., the state can’t force anyone to accept payment in them), and eliminates state capital-gains taxes on gold and silver coins used as currency. Now, Iowa and South Carolina are considering similar legislation.
The hard-money movement made its first leap into national politics a few weeks ago, when Sens. Jim DeMint (R., S.C.), Mike Lee (R., Utah), and Rand Paul (R., Ky.) introduced the “Sound Money Promotion Act.” The bill would eradicate federal capital-gains taxes on gold and silver coins declared legal tender by the feds or by state governments.
“We’re losing credibility in our money,” DeMint tells National Review Online. He contends the bill “might create a little accountability” by fostering competition with the dollar.
Hilton fears the dollar’s decline even more. “President Obama’s administration authorized more new money in its first eight months than had been created in the entire history of the United States,” he says. “There’s a hidden, insidious inflation tax that we’ve become so accustomed to. We need a currency that maintains its purchasing power.”