Wednesday, June 29, 2011
The New York Sun endorses a recently-introduced bill that would prevent gold and silver coins that have been declared legal tender from being taxed in the event of an increase in their fiat-money value. This is intriguing, but the bill offers no challenge to the government's ability to forbid the use of gold and silver as money in certain circumstances. (That is what would ultimately be needed to impose fiscal restraint on the state.) I am sure the government could still find a way to tax such coins, but this bill would, as I see it, make it much more difficult to do so, so I offer my very qualified support for it on those grounds.
I find the impetus for this bill much more interesting and encouraging than the bill itself:
... Utah was the first state in our modern time to exercise its constitutional power to make gold and silver coins legal tender. It did so earlier this year, ahead of as many as a dozen states that are at various stages of looking in to the question of how to protect themselves against the collapse of the United States dollars that are being issued by the Federal Reserve. They are all being energized by the fact that the value of the dollar has collapsed to barely a fifth of what it was, if that, at the start of the 21st century. [link added]My misgivings aside, I think the bill would help us move sightly towards using actual money again. More important, I think, the bill and the actions of the various states mentioned above are an encouraging sign that the idea of abandoning fiat money is becoming more widely regarded as worthy of serious consideration. If we are to adopt a gold standard without enduring a very ugly economic collapse along the way, the pendulum of public opinion will need to swing much further before anyone will successfully challenge the idea that the government should be in charge of the currency. This is, perhaps, a sign that that swing has started.