Voting for Sound Money: Why State Action Trumps Federal Rhetoric

By Jp Cortez

As the United States braces for the aftermath of a decisive Trump victory for the Presidency, the principles of sound money seem destined to take a backseat to what is politically expedient – at least at the federal level.

This is due to the inherent nature of national political campaigns, which often promise more spending, more intervention, and more of the same monetary policies that erode the purchasing power of the U.S. Federal Reserve Note, commonly known as the U.S. dollar.

This is a consequence of detaching a nation’s money from a stable backing, such as gold.

Since Nixon officially ended U.S. dollar interchangeability with actual gold in 1971, we’ve seen what proponents of sound money feared would come to fruition: Endless wars and huge military expenditures, expansion of the bureaucratic state, wasteful spending, and a steady decline in how much your money can buy — all made possible by Federal Reserve-enabled borrowing.

Not only is war an unproductive endeavor that shifts economic resources away from domestic needs, but it’s also unbelievably costly. An unbacked money that is printed or created at will means government is no longer restrained by a limit on spending.

The promise of more programs, whether entitlement programs, infrastructure, or other social policies, often translates to a larger, more complex bureaucracy. With this expansion of the state comes more funding required from the state.

Sound money forces politicians to allocate scarce resources (tax dollars) responsibly.

The establishment of the Federal Reserve in 1913 was one of the most consequential acts in American history. The Fed masquerades as a private institution while always enabling the current administration’s deficit spending agenda.

There’s a consensus among the establishment candidates on maintaining the status quo with the Federal Reserve. It has historically pursued policies like quantitative easing, low interest rates, and corporate bailouts. While intended to stimulate the economy, Fed interventions lead to malinvestment, impaired economic productivity, and currency devaluation over time.

Sound money keeps technocratic bankers from conducting monetary experiments and inventing other attempts at financial alchemy on a global level.

Despite these federal-level challenges, Congressman Alex Mooney (R-WV) and Congressman Thomas Massie (R-KY) have introduced pro-sound money legislation. They are pushing to end the federal capital gains tax on gold and silver, to audit America’s gold holdings (including a full accounting of any swaps, leases, derivatives, of financial encumbrances that may be placed on the gold), and to audit the Federal Reserve.

While these efforts continue to spotlight the importance of sound money at the federal level, the bills haven’t received a hearing or a vote thus far.

However, while the national stage might seem indifferent or even hostile to sound money values, there’s a silver lining, quite literally, at the state level.

Over the last 10 years, Money Metals Exchange, acting through its Sound Money Defense League project, has made significant strides, demonstrating that grassroots activism and state-level legislation can indeed move the needle towards an economy based in honest, sound money.

In 2024 alone, the league has notched seven victories across various states. These include the elimination of sales taxes on gold and silver in states like New Jersey and Wisconsin, and the abolition of income taxes on any nominal gains from these metals in states like Alabama and Nebraska. Nebraska’s measure also included language to protect the citizens of the Cornhusker State from being forced to use a Central Bank Digital Currency.

These moves not only encourage investment in precious metals but also promote their use as a hedge against inflation.

States like Tennessee and Utah have authorized their treasurers to invest in physical gold, recognizing the crucial role that gold and silver can play in stabilizing a state’s investment portfolio.

This isn’t just symbolic; it’s a practical step towards state-level sound money policies.

The success of these legislative changes is largely due to targeted, state-by-state grassroots efforts led by Money Metals to prompt action on sound money principles by state legislatures.

This bottom-up approach showcases that change can indeed start at home, Freedom-minded activists can influence state policies that might create momentum for national-level reforms.

This election might not offer much for sound money enthusiasts on a federal level. However, the real battleground for economic sanity appears to be at the state level, where the Sound Money Defense League and Money Metals are not just discussing but actively implementing policies that could reshape America’s economic future.

Regardless of who sits in the Oval Office, the groundwork for a return to sound money principles is being laid, brick by legislative brick. This movement reminds us that while national politics might set the tone, it’s often local, on-the-ground action that determines the future.

Source: Money Metals Exchange

Jp Cortez is the Executive Director of the Sound Money Defense League, an organization working to remonetize gold and silver through nationwide legislative efforts. He is a graduate of Auburn University and a resident of Charlotte, North Carolina. Follow him on X (Twitter) @JpCortez27.

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