Rekindling the Golden Years: Futility from the Legislature

“There’s gold in them thar hills!” 

That iconic phrase refers not to the battle cry of the California Gold Rush, which sparked a frenzy of expert and amateur miners to hit the road West.  Rather it has been attributed to (and personified by the Mark Twain character Mulberry Stevens) M.F. Stephenson as a plea to prospectors to seek their treasures in the North Georgia mountains. 

Stephenson served as the assayer of the Dahlonega Mint in Dahlonega, Ga., in the 1840s.  When the gold current began to flow from California in 1848, many thought the rush in Georgia was on its last legs.  Indeed, after the great exodus to California, the stock of Georgia gold steadily declined and all but died out by the mid-Twentieth Century.

That’s an interesting history lesson, but what relevance does it have today?  After all, we don’t pay for goods and services in gold bars.  Our financial, commercial, and consumer systems run on cash, credit, and, of course, debt. 

But what if we returned to the gold standard; to the days of yore when you knew your value by the weight of the gold in your pocket? Preposterous, absurd, futile, you might say. 

Unless you ask the Georgia legislature. 

State Rep. Bobby Franklin of Marietta has introduced a bill entitled the Constitutional Tender Act, requiring “the exclusive use of gold and silver coin as tender in payment of debts by or to the state.” 

Can you use your Kennedy half-dollars or your Sacajawea or Susan B. Anthony dollars?   Not a chance.  The law specifies that only “[p]re-1965 silver coins, silver eagles, and gold eagles” may be used to “any payments whatsoever to any person or entity.” 

How about stuffing your return envelope full of coins the next time you pay your Georgia taxes or hauling a sack of silver into the DeKalb County Tax Commissioner’s Office to renew your car tag? 

I’m sure their accounting departments would appreciate having to weigh and measure some gold bars.  By the way, don’t forget to install your smartphone’s conversion app since the law requires that you use “current market value of the silver or gold content of each coin” on that particular “business day” as set by the London Gold and Silver Fixing Prices.

To be fair, the bill provides that “other forms of currency may be used in all other transactions within the state upon mutual consent of the parties of any such transaction.” 

That may be a fair fix for the cash die-hards, but let’s be honest.  This is exactly the kind of government project that the people don’t want and don’t need.  It’s about as valuable as Fool’s Gold.

Georgia isn’t alone.  Other states have toyed with similar ideas including Colorado, Idaho, Indiana, Missouri, Montana, New Hampshire, Utah, and Washington. Recently, the father-son congressional duo of Ron and Rand Paul encouraged a return to the gold standard.

Most of this folly appears to be driven by a fear of the Fed.  Of course, the Federal Reserve is not the poster child of a well-oiled machine.  A flip through the news reveals that interest rates, inflation, and the fluctuating dollar hold the financial industry captive. 

But is returning to a gold standard going to help alleviate the burden and save the economy from impending doom?  No.  First, implementation likely would be cost prohibitive.  Second, gold is a speculative industry – not unlike housing and we all saw how bad that bubble burst.  Third, is it really the will of the voters that our legislators focus on whim instead of real work? 

We have real issues – jobs, education, crumbling infrastructure – that go neglected when public projects lose priority to what is, at best, an entertaining debate of economic theory.  

Simply put, our economy needs to be fixed, what it does not need is another failed experiment.