Dear Monetary Policy Observer,
The following editorial recently published in the New York Sun is an interesting piece in support of the Sound Money Protection Act currently being introduced in the Senate. The article goes over the 'tax' on savings inherent in the current burdens on legal tender, as well as the need (and growing consensus at the state and national level acknowledging this need) for addition efforts to counter the effects of a rapidly devaluing dollar. An excerpt is below or you can read the full article here.
American Principles In Action
A First Step To Sound Money
Editorial of The New York Sun | June 28, 2011
Here’s a hypothetical situation. Suppose you had $1.5 million. At today’s gold price that would buy approximately 1,000 ounces of gold. Suppose now that President Obama, the Congress, and the Federal Reserve began managing the American economy in such a way that by the end of President Obama’s second term, the dollar was back to where it was when President George W. Bush began his first term. Were that to happen, your $1.5 million could purchase 5,660 ounces of gold.
So, do you think you should have to pay taxes on the increase in the value of your money?
If the idea strikes you as crazy, let us refer you to the legislation introduced today at the Senate by James DeMint, Rand Paul, and Michael Lee. It’s called the Sound Money Promotion Act, and The New York Sun is happy to lay claim to being the first newspaper to endorse it. The measure, as it is characterized in a press release posted by Senator DeMint, would remove the tax burden on gold and silver coins that have been declared legal tender by either the federal government or state governments.