Georgia state Rep. Bobby Franklin (R) loves to introduce far-right reactionary bills. Among his greatest hits are an assault of Georgia’s authority to vaccinate its citizens, an unconstitutional bill declaring Roe v. Wade a “nullity,” and, of course, a bill eliminating income taxes.
Yet Franklin may have outdone himself with his “Constitutional Tender Act,” which would require all transactions with the state of Georgia — including the payment of taxes — to be paid with U.S. minted gold or silver coins unless the state agrees to grant a special waiver for each transaction:
Pre-1965 silver coins, silver eagles, and gold eagles shall be the exclusive medium which the state shall use to make any payments whatsoever to any person or entity, whether private or governmental. Such coins shall be the exclusive medium which the state shall accept from any person or entity as payment of any obligation to the state including, without limitation, the payment of taxes; provided, however, that such coins and other forms of currency may be used in all other transactions within the state upon mutual consent of the parties of any such transaction.
Were Franklin’s bill ever to become law it would have immediate and catastrophic consequences for Georgia’s economy. Among other things, the U.S. Mint simply does not make very many gold and silver coins — the Mint has even suspended sales of precious medal coins when demand rises above very low levels — so it is unlikely that enough coins even exist to allow Georgia taxpayers to pay more than a fraction of their tax obligations if they are required to do so in U.S. minted gold or silver.
Lawmakers in other states, such as Utah, have proposed slightly modified versions of Franklin’s bill which would allow citizens to mint their own gold and silver coins, and proponents of both the Georgia and the Utah version of the bill tout it as a backdoor way to reimpose the gold and silver standard on America. This result, though unlikely, would also have disastrous consequences.
Gold or silver standards leave a nation completely powerless to control its own monetary policy, often tying inflation rates to completely arbitrary factors such as the rate that gold is mined in South Africa, rather than to the interests of a national economy. Worse, it leaves a nation without one of its most important tools to push back against economic downturns. In the 1930s, the United States was one of the last major nations to abandon the gold standard, and this failure to act was one of the principle causes of the Great Depression.
Sadly, however, the lunatic view that America should reembrace the failed economic policies of the Hoover Administration is not limited to a handful of state lawmakers. When the new Congress convenes next week, Rep. Ron Paul (R-TX) will assume the chair of the House subcommittee that oversees federal monetary policy, and Paul has been pushing for decades to crucify mankind upon a cross of gold.