Sound Money From D.C.?

Senator Jim DeMint of South Carolina has an interesting idea: what if silver and gold coins which are declared legal tender by the U.S. government and/or state governments were treated just like other “legal tender” and not taxed? Crazy, I know.

And he’s not alone as Senators Rand Paul of Kentucky and Mike Lee of Utah have co-sponsored S.1287. Mike Lee’s support stands to reason as his state passed similar legislation and had it signed into law on March 25 of this year.

In a statement issued by Senator DeMint’s office, he said

“Thanks to the government’s reckless over-spending, continued bailouts, and the Federal Reserve’s easy money policy, this year the purchasing power of the dollar hit an all-time low in the several decades since we went off the gold standard,” said Senator DeMint. “In order to rebuild strength and confidence in our economy, we need both the fiscal discipline to cut wasteful spending and the monetary discipline to restrain further destructive monetizing of our debt. This legislation would encourage wider adoption of sound money measures, and that’s a step in the right direction.”

The senator’s statement concluded with the following list of negative indicators for the U.S. economy:

The warning signs for our economic problems can no longer be ignored:

  • While the value of a dollar is at historic lows, the value of gold is at historic highs
  • Recently Standard & Poor’s downgraded the U.S. outlook from “stable” to “negative,” meaning there is a 1 in 3 chance of an actual credit downgrade in the next two years
  • The world’s largest bond fund has dumped its U.S. debt-related holdings, over concerns that we will not get our fiscal house in order
  • The Federal Reserve is now buying 70 percent of U.S. Treasuries, set to surpass the holdings of both China and Japan combined
  • Readers are encouraged to contact their senators and encourage their support for this legislation.