Constitutional Tender for Tennessee?

cross-posted from the Tennessee Tenth Amendment Center

Sen. Bill Ketron has introduced a resolution in the Tennessee General Assembly that will create a committee to study creating an alternative currency for Tennessee in the even of a collapse of the Federal Reserve.  SJR0098 is an important step towards bringing constitutional tender to Tennessee.

When our Founders wrote the Constitution, in Article I, Section 10 they wrote “No State shall … make any Thing but gold and silver Coin a Tender in Payment of Debts.”  The reason for this is that historically fiat currencies, that is currrencies not made of or backed by gold and silver, always collapse.  The United States currently uses fiat currency in the form of Federal Reserve Notes that are not backed by gold or silver.

SJR0098 pending before the Tennessee General Assembly recognizes this and seeks to ensure the economic viability of the state in the event of a collapse of the Federal Reserve.  The resolution states:

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The U.S. Budget Situation is Even Worse than You Imagined

Last week, Senator John Kerry (D.-Mass) was unhappy with a Republican plan to cut as much as $61 billion out of the federal budget.  “I think it’s an ideological, extremist, reckless statement,”Kerry said of the plan.

I hadn’t kept up on all the numbers recently, so I took a look at President Obama’s 2011 budget.  My shock at the numbers was matched only by my shock that even Kerry could say something that demented.

The fiscal situation America now faces is unutterably appalling.  I don’t want to bury you in numbers, so I’ll just mention a few, rounding out to the nearest hundred-billion.

First, the deficit is not just a few percentage points in the budget.  Fully a third of all spending is now on borrowed money—that is, $1.3 trillion out of 3.8 trillion.  That would be like spending $100,000 a year on a salary of $67,000.

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The Myth of the Anti-Fed U.S. President

I mentioned the fake quotation phenomenon not long ago, and this is in that tradition. Some opponents of the Fed, usually those whose opposition derives more from political than economic concerns, like to cite twentieth-century U.S. presidents as alleged opponents of the Fed. The main one is Woodrow Wilson himself, who is portrayed as somehow having…

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