Today, U.S. Senators Jim DeMint (R-South Carolina), Mike Lee (R-Utah) and Rand Paul (R-Kentucky) introduced the Sound Money Promotion Act, legislation that would remove the tax burden on gold and silver coins that have been declared legal tender by the federal government or state governments. On May 9th, the state of Utah became the first state to recognize such gold and silver coins as legal tender for use within the state, and similar legislation has been introduced in 12 other states, including South Carolina.
"Thanks to the government's reckless over-spending, continued bailouts, and the Federal Reserve's easy money policy, this year the purchasing power of the dollar hit an all-time low in the several decades since we went off the gold standard," said Senator DeMint. "In order to rebuild strength and confidence in our economy, we need both the fiscal discipline to cut wasteful spending and the monetary discipline to restrain further destructive monetizing of our debt. This legislation would encourage wider adoption of sound money measures, and that's a step in the right direction."
"Good monetary policy is an important part of a healthy and prosperous economy," said Senator Lee. "Since the Federal Reserve Act of 1913, the dollar has lost approximately 98 percent of its value. This bill is an important step towards a stable and sound currency whose value is protected from the Fed's printing press."
Senator Paul added, "As the government runs massive deficits, uncontrolled spending, and an increasingly unsustainable debt, governments and the bureaucrats in charge are often forced to take an easier approach: to monetize the debt, inflating the currency. These implications can be devastating, leading to higher interest rates, which lead to higher borrowing costs and slower economic growth, but most importantly, destroying the savings and standard-of-living of all Americans. This bill will hold politicians and the Federal Reserve accountable; acknowledging that states are serious about an alternative to a weakening dollar."
The warning signs for our economic problems can no longer be ignored:
* While the value of a dollar is at historic lows, the value of gold is at historic highs
* Recently Standard & Poor's downgraded the U.S. outlook from "stable" to "negative," meaning there is a 1 in 3 chance of an actual credit downgrade in the next two years
* The world's largest bond fund has dumped its U.S. debt-related holdings, over concerns that we will not get our fiscal house in order
* The Federal Reserve is now buying 70 percent of U.S. Treasuries, set to surpass the holdings of both China and Japan combined