Please, Please, Please, Oh Please Let This Happen

Via TPM we learn that a legislator in the Palmetto State seeks to create a new South Carolina currency, just in case the US dollar blows up.

It seems that, as the proposed legislation puts it, “many widely recognized experts predict the inevitable destruction of the Federal Reserve System’s currency through hyperinflation in the foreseeable future.”

Those would be the experts who read this chart, no doubt.*

Facing this inevitable disaster, isn’t it just simple prudence to plan ahead?  State Senator Lee Bright** (R.-Klanbucks) thinks so.  His bill seeks to set up a joint committee of the state legislature to study the issue and make recommendations by November, 2011.  The bill strongly suggests the kind of monetary system that South Carolina should consider:

Whereas, the Federal Reserve System’s currency not being redeemable in gold or silver coin or the equivalent in bullion is being identified by more and more experts as a major reason for the ever-increasing instability of the Federal Reserve System…

Ahh! A gold bug.

Of course, that worked out so well last time.***

Hell, Benjamin Franklin worked this out in 1729, in his landmark pamphlet calling for the establishment of paper currency in the commonwealth of Pennsylvania, pointing out, accurately, that a metal currency scheme worked to transfer wealth from laboring folk to the rich, whilst constraining trade to the impoverishment of the whole.

Sounds like exactly the prescription for South Carolina, doesn’t it?

Onwards!  There is the inconvenience that maintaining a national currency system is a power reserved to the federal government…but no matter:

Whereas, “the police power” being the primary sovereign governmental function of every state, every state may adopt its own currency, consisting of gold or silver, or both, whenever necessary and proper to facilitate exercises of that power in aid of the general welfare of the state and its citizens; and

Oh. Now I get it. This is Wingnut synchronicity.  With a local mint churning out nicely decorated chunks of gold and silver to act as money instead of the Yankee greenback, it becomes possible both to drive the local economy into lasting depression and nullify the legal authority of the U.S. government over the patriotic and God-fearing slaveholders citizens of South Carolina.

That worked out pretty well last time too, didn’t it?

That’s really what this is about, of course. Secession in salami slices, while retaining just enough connection to the loyal states of the Union to continue receiving their wingnut welfare from the rest of us.  (As of 2005, South Carolina received $1.35 in federal spending for every degenerate Federal Reserve dollar it sends north to the enemy capital.)

And you know what?  I think that this should really happen.  Go for it, Palmetto (gold) Bugs!  Set up a currency — with this proviso.  Greenbacks cease to be legal tender.  You’d be on your own, scrabbling for the shiny bits as best you could.  No federal subsidies for you, neither.

So go ahead, I say.  Try to make a metal monetary system work.  I double dog dare ya.  After all, the states are supposed to be laboratories of democracy…which means it’s useful for the rest of us to observe some catastrophic train wrecks when they occur.

Bring popcorn.

*And yes, I know that this is snark, and that one measure only should not satisfy anyone trying to assess risks to the economy. But still, if you are looking for market wisdom on the future of inflation, the rate history of the long bond is a pretty good place to start.

**No easy jokes on the man’s name, please.  Not that the Balloon Juice crowd would ever stoop to such low humor.

***See, for example, Barry Eichengreen and Peter Temin’s paper “The Gold Standard and the Great Depression” for details. (Abstract only at this link.)  There they write (inter alia) of the domino effect of the return to gold buggery by different states, to the point that Churchill himself began to waver, writing to the Governor of the Bank of England, Montagu Norman, that he feared a return to the gold standard might result in deflation: “a very serious check…to trade industry and employment.”  Oh no, said Norman. “Cheap money,” (i.e. money bearing lower interest rates than a gold-backed currency could) was important merely because people were weak: “more for psychological than fundamental reasons.”  Eichengreen and Temin’s response? “This, of course, is nonsense…” which, of course, it is.  More on this in Temin’s book, Lessons of the Great Depression.

Image: Marinus Claesz. van Reymerswaele, The Tax Collectors, c. 1540.
Explore posts in the same categories: Fiscal policy, Gold Buggery, Republican follies, Stupidity

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One Comment on “Please, Please, Please, Oh Please Let This Happen”


  1. […] This post was mentioned on Twitter by Thomas Levenson, sciseekfeed. sciseekfeed said: https://inversesquare.wordpress.com/2011/02/13/4619/ […]


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