Every time I get into a discussion of money, someone brings up the Constitutional limitations on states, including the limitations of what can be accepted as money, which is found in Art I, Sec. 10, Clause 1, it reads:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
They always point to the Federal Reserve and say “see, the FRN isn’t constitutional money!” Which is patently obvious, given the facts.
They never reverse it, which is something I find quite curious; why the several states don’t abide by the constitution themselves? Why don’t they refuse payment in fiat notes (the standard FRN baseless paper bills) and demand payment in gold and silver coin, as is required by law? Why do they continue the self-destructive delusion that there is real value in the US dollar? Value other than “the full faith and credit of”…? Whatever that’s worth.
Can you imagine what the results of that would be?
“No, I’m sorry Mr. President, but I have to abide by the rule of law, and the law states that gold and silver coin is the only thing we can accept as payment for the federal gov’ts debts. If we don’t receive your payment in gold and silver, I’m afraid we will have to put a stop to payments of our citizens tax monies into the federal treasury…”
To be present in the Oval Office to get a picture of that event. Priceless.
Editor’s note, 2017. Coded language. I hate coded language. FRN is Federal Reserve Notes. FRN is newspeak of the sovereign movement and its wrong-headed ideas about currency and value. I really can’t broach my current thoughts on money as a mere addendum to this post. They warrant a much longer piece which I truthfully haven’t started writing yet.
A decade and more of listening to economist podcasts and reading economic books (as well as others) has radically altered my understanding of money in ways that are hard to describe without digging into the meat of philosophy and economics. Suffice it to say that my thoughts on money at this point in 2006 were truly infantile.
Which is sad, because I’ve always thought I had a pretty good idea what money was and what trade for value meant. I’ve been a hard bargainer at the negotiating table and have generally secured better than average compensation for my work, lower than average outlay for the goods I need. I understood it better than most people around me seemed to then, and I understand so much more about it now that it makes reading these old posts quite painful.
Still, I never did get an answer beyond the obvious one as to why the states have not made a fuss about the federal government subverting the Constitution with its current money not based on gold and silver as the document demands. Obviously they want the carnival ride to continue, that is why they haven’t. But the question still needs an answer, and the deviation from code should be corrected by updating the code itself.
Which is why the longer post about the nature of money is something I really should take the time to write.