Slowly but surely, monetary reform and the need to rein in the Federal Reserve is pushing into the American conscience. Forbes magazine contributor, Ralph Benko published an op-ed piece this week in which he claims that the next big political issue will be, as he puts it, following the “shrinking” money. He writes, “Americans feel their dollars shrinking. We don’t like it. And we are groping for a way to stop it.” Mr. Benko believes that this issue can re-unite the Republican Party by addressing common concerns of the Tea Party and establishment Republicans.
I have a tremendous amount of respect for Mr. Benko. We have talked on several occasions, and he is committed to the restoration of sound money. However, we disagree on where the solution will come from. In order for a viable, sound money initiative to come out of D.C., the following must occur:
- A bi-partisan (not just Republican) consensus must form that this is an issue worth pursuing. Chances – 0%
- Responsibility for monetary policy would have to be taken from the Federal Reserve, and returned to Congress. Chances – 0%
- The people would have to trust Congress (with it’s 5% approval rating) to administer sound monetary policy. Chances – 0%
While a silver bullet from D.C. would be the most expedient path, it simply will not happen. Mr. Benko’s proposition that the Republican establishment wants to have spending checked by honest money is not supported by recent history. While they do make a lot of noise about out of control spending, they have taken no meaningful steps to curtail it. We must deal with reality. Establishment Republicans will never proactively join the Tea Party and libertarians on this issue. Never.
That means the solution must come from the states.
Under Article 1, Section 10 of the Constitution, states have the right, and the duty, to make gold and silver coin a tender in payment of debts. They may do this today by:
- Clarifying state regulatory oversight of privately owned depositories and bullion banks.
- Removing state taxation of gold and silver specie.
- Declaring specific of gold and silver coin legal tender.
In so doing, states will lay the foundation for true monetary reform by clearing the way for free market solutions to this economic problem. With these simple steps taken by a hand full of states, political pressure will grow for those in Washington D.C. to defend the indefensible – the Federal Reserve’s fiat monetary system and all the suffering it has brought to the American people. Simultaneously, free market pressures will grow for the Federal Reserve to reform or go out of business.
It is a tremendous positive that Forbes magazine is leading the way to bring the issue of sound money into the mainstream media. It would be a tremendous service to their readers, and all Americans, if they would give serious consideration to the state led, free market option that truly is the only politically and economically viable solution.