Economist’s View: Money Monopoly -Mark Thoma
Legislators from both parties support legislation that would allow the state to accept IOU’s issued by the state because of the ongoing fiscal crisis in California as legal tender for the payment of taxes and state fees. This would effectively establish a new state controlled currency. If it passes, I think it would just a few minutes to get challenged in court.
Mark Thoma remains neutral about it all and doesn’t see this as too much of problem, but I think the courts and the financial institutions that seem to own the Federal Reserve and the Treasury Dept., won’t be quite as sanguine about it all. It does really put a cramp in national fiscal policy. Some would argue that may not be a bad thing, but there’s just no way entrenched interests will let this be.
