We’re not immune from the consequences of human behavior,” Marshall said. “At some point there is going to be a dollar that breaks the camel’s back.”
Today at the gym I saw a headline on FOX News about Virginia looking to come up with a state currency over fears of the dollar crashing. Naturally this sort of thing piqued my interest and I looked it up as soon as I got home. It looks like Robert Marshall of the Virginia House of Delegates proposed this bill, which is gaining traction. I’m not sure if he’s explicitly calling for a gold standard or if that’s just what’s implied. I know a handful of other states have made similar propositions in the past few years.
The author of the US News opinion piece, Susan Milligan, basically argues that we haven’t seen inflation like some other countries, so a state currency is uncalled for. She also incorrectly states the government’s official position that inflation is only a few percentage points, which doesn’t factor in food or fuel. She admits that there are reasons to be concerned with the strength of the dollar, but states that it’s currently the world’s dominant currency. This is certainly true, but if there are concerns about the dollar’s future, why not have a plan B in place? It’s easier to work something like this out when everything is running smoothly rather than trying to put the pieces together after it’s already needed. Proactive > Reactive, Susan.
She also states that while fiscal responsibility is a worthwhile goal, a new currency is not the answer. I think that a competing currency is as good of an answer as any. They just had a huge debate in Washington over our deficit and the only thing they came up with is that they’re going to make some insignificant cuts to the budget sometime later down the road. They’re still planning on that 16 trillion (and growing!) debt going away through all this economic growth that we’re all waiting for. At this point it seems completely Pollyanna-ish to think that any kind of solution is going to come out of Washington, so why not take every opportunity to diverge ourselves from their shipwreck? If only everyone was represented by politicians who were willing to think a few steps ahead and bring up some uncomfortable topics, we might not be in the kind of mess we’re looking at.
The currency would compete side-by-side with the US dollar in Virginia. Because the dollar is the dominate currency of the world, I’m sure it would be dominate in Virginia as well but it would give Virginians (and anybody else, really) more choices to pick how they want to do commerce or receive compensation. I would also suspect that a local currency would help keep a lot of Virginia’s commerce close to home and help keep money within local communities. If no one is in to it, it will fail. If they are, it will secede, or, uh, succeed. Freudian slip, perhaps?
At any rate, I think the real lunacy is the idea that the dollar is invincible and that there will never come a day when we need something else.
On a side note, I think it’s kind of funny how an alternative currency like Ithaca Hours are viewed as quaint community-builders but as soon as a Republican backs a currency and/or “gold” is mentioned, it’s a wacky idea at best and a treacherous strike right at the heart of America at the worst even though they both basically work on the same idea. Alternative currencies are in the eye of the beholder, I guess.