Gavin McInnis on Baby Boomers

[Galen]

(05-22-2016, 04:53 AM)Kinser79 Wrote: Actually Article I, Section 10 limits the states to Gold or Silver coin, but Article I, Section 8 grants Congress power to coin money but doesn't further define what money is.  As such the coining of money through means other than gold or silver (IE paper or copper coins or token coinage--like most change in the US currently) is strictly limited to the Federal Government.

I would argue that Art I, Sec 10 limits the States to either using gold and silver in the payment of debts or any other thing that Congress makes legal tender (in the case of the US Federal Reserve Notes and the token fractional coinage).  So long as both sections are in place, or something like them (in say a different constitution) sovereign debt is impossible to the states, but not impossible for the federal government.

Naturally of course if one were to introduce hard money to the US again there would likely need to be federal banking regulations to control the backing in specie of the notes printed privately.  And I'd be perfectly fine with a bimetallic standard provided that gold doesn't overpower silver, in which case it should be only gold.  I believe that exchange ratios between gold and silver have changed a bit from the 16:1 ratio of the late 18th century.

Two things about coining money.  Article I, Section 8 grants Congress the power to coin money which implies a commodity money like gold or silver particularly in light of section 10.  I also tend to interpret the grants of power as narrowly as possible in light of the Tenth Amendment and the Federalist Papers.  One of the problems with most Supreme Court rulings is that they tend to create powers that were never explicitly granted to Congress.

The problem with bimetallism in the nineteenth century were the fixed ratio set by Congress.  Allowing the market to set the ratio would not have this problem because Gresham's Law does not apply in a free market condition.  There is a surprising amount of gold and silver coin already out in the world but people tend to use it as a hedge against inflation since the only thing the Fed knows how to do is print.  It seems likely that those coins would start coming back into circulation rather quickly.

You might want to read Murrray Rothbard's History of Money and Banking.  (Just click on the link) It will give you considerable insight into why the Constitution handles money the way it does.