T Nation

South Carolina Separate Currency for State


Interesting for sure. Thoughts?


South Carolina lawmaker wants separate currency for state

[i]A South Carolina state politician wants the state to develop its own gold and silver-based currency in case the Federal Reserve collapses and hyper-inflation ensues.

"If folks lose faith in the dollar, we need to have some kind of backup," State Sen. Lee Bright told the Spartanburg Herald Journal's Stephen Largen. His bill asks a committee to look into the development of a state currency, citing the Constitution and Supreme Court precedents to prove the bill's legality.

Slate's Annie Lowrey tracks down similar bills in Georgia and Virginia, and points out that the legislation reflects a larger trend of state politicians wading into monetary policy. A bill in Georgia would require all debts to the state be paid in pre-1965 gold and silver coins. The Virginia proposal would let the state print its own money. Meanwhile, one politician in Utah wants to cut out the middleman entirely and allow the state's residents to run their very own mints.

Advocates of currency alternatives to the dollar argue that the Federal Reserve's quantitive easing techniques will lead to inflation. Texas GOP Rep. Ron Paul, who won the Conservative Political Action Committee's presidential candidate straw poll last week, has been Congress' most visible anti-Fed leader. Paul argues the Fed devalues the dollar, and proposes that the United States should gradually return to gold-backed currency.

In addition to the nightmarish logistical challenges involved with a state adopting a new currency, Lowrey points out that commodity-backed currencies can also experience volatility. For example, if a state collects income taxes in gold and then a big new gold mine is discovered, the metal's value would decline--together with the state's revenue holdings.

So for now, it's probably bests for individual consumers to refrain from shifting over to sovereign state currencies--especially since none of the recently introduced currency bills stands a strong chance of passing. However, for numistmatists looking to make a political statement, the Ron Paul silver dollar will likely appreciate--especially since federal authorities raided the libertarian minting operation that marketed it back in 2007.



It would be interesting if conservative states had on currency while liberal states had another.


Want me to spoil it for you or would you like to see the outcome for yourself?


I have an idea, but sure lets hear it.


Well, just imagine New Jersey or California with the added ability of issuing their own currency.


While we are somewhat on the subject, maybe someone could backup what Ive been told by some web source(I truly dont remember). From what this source reported, statistics say that even if our income was taxed 100%, we still wouldnt cover the deficit. Basically, the U.S would still have more going out than coming in. Anyone know if thats a true statistic? Cant find the source anymore.


Won't happen, can't happen so not worth discussing.


We do, it is called a California IOU. Want one? Want to know when the state will pay you back?


I think your confusing the terms deficit and total debt.

"Deficit" is yearly (Tax Revenue-Federal Budget), Gross Debt is cumulative(Sum of all yearly deficits).

The GDP-DEBT ratio is fast approaching 100%, meaning that if you taxed 100% of income in a single year, it would pay off the accumulated debt of the US Government.


But what can happen is regional informal barter systems with some system to keep score, i.e. a currency.

Unstoppable, untaxable, there are even small businesses beginning to participate.

I so love the interwebz.


Lowrey doesn't appear to understand that any state coined currency must be backed by gold or silver according to the constitution.

He also doesn't understand that commodities have true value while fiat money combined with irresponsible fiscal policy guarantees shrinking value. Look at the value of the dollar over the last hundred years.

Lowrey is deceptive and dishonest.


The constitutiuon only allows the federal government to coin money. States get to choose between gold/silver or both,