The New York Sun: America DefaultsSubmitted by legalizeliberty on Mon, 12/31/2012 - 11:12
In respect of the fiscal fight underway this weekend in the Congress, The New York Sun is in favor of recognizing that America has already defaulted on its obligations. The default has become evident in the collapse of the value of the dollar to below, at the moment, a 1,600th of an once of gold. It has plunged to as low as an 1,800th of an ounce of gold during the Obama presidency from the 860th of an ounce of gold at which the dollar was valued at the start of his first term and the 265th of an ounce of gold at which it was valued at the start of President Bush’s first time. This collapse is a default.
This is a context in which lifting the ceiling on the federal government’s debt, one of the measures now before the House, is a kind of fiction. What is the difference between refusing to pay a debt and paying it back with something of less than what was borrowed? What we favor is an advance to the recognition of the monetary role of gold and silver. This is the constitutional legal tender. It is American bedrock. It means that lifting the ceiling on what the federal government is permitted under the law to borrow is a meaningless gesture absent certain reforms.
The most important of these have already been introduced in the Congress. One of them, a bill to audit the Federal Reserve, has passed the House by a wide, bi-partisan majority. That a measure has been championed for years by Congressman Ron Paul. A second reform is another of his bills, the Free Competition in Currency Act — HR 1098 — which would end legal tender paper money and permit the minting and circulation of privately issued coins and notes. A third measure, championed by Senators DeMint, Lee, and Paul, would remove taxes on gold and silver coins that are recognized by either the federal government or any state as legal tender.