The dollar has been floating for years with very little public concern. With the continuing economic downturn, it might be time to get concerned.
In his article The Floating Dollar as a Threat to Property Rights, Seth Lipsky discusses the recent concern over the kilogram. It appears that the cylinder of platinum and iridium which defines the weight of a kilogram – and is maintained by the International Bureau of Weights and Measures – has been losing mass. This cylinder’s loss of only a few atoms of mass is creating a “global scramble” to fix the problem. Why isn’t this happening with the dollar?
The dollar has collapsed from 1/35 of an ounce of gold to less than 1/1,300 of an ounce of gold, and at one point in recent months it collapsed to less than 1/1,400 of an ounce of gold. Fed Chairman Ben Bernanke’s response to the devaluation was that he was “puzzled.” He went on to say that there was no “new urgency” to redefine the dollar – let it float.
The founding fathers of our country warned against paper currency, and it wasn’t until Civil War broke out that the President could replace two judges on the Supreme Court in order to pass his laws instituting paper currency as an acceptable form of debt payment. The cases are still known as the Legal Tender Cases. But with the devaluation of our currency, and our economy a shell of its former self, maybe it’s time to revisit the Legal Tender Cases.
States are already starting to reassert their rights. A growing number of states are looking at alternatives to paper money. Virginia has launched the most recent efforts. A bill has been introduced before the General Assembly to set up a joint committee to study the question of returning its currency to gold and silver coins.
Maybe Texas should take a similar look. As George Washington warned, paper money will inevitably “ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.” James Madison goes as far as to call paper money “unconstitutional, for it affects the rights of property as much as taking away equal value in land.”
Even with the warnings and the observable decline of the paper dollar, there is no “global scramble” as there is over the kilogram. We must act on the floating dollar problem, before our property floats away.