Ron Paul was demanding legal currency competition back in 2011

Ron Paul, a former US Congressman from Texas and presidential candidate, has long rallied libertarians in the United States behind ideas that, honestly, many in the Bitcoin community would embrace but that fail to resonate at the mainstream level.

Case in point: Paul addressed the US House of Representatives around this same time three full years ago on behalf of the bill HR 1098: the Free Competition in Currency Act.

His plan was three-fold: Eliminate legal tender laws, eliminate laws prohibiting private mints, and eliminate capital gains taxes and sales taxes on gold and silver coins. (Note that Paul was not yet talking about cryptocurrenices in 2011, but the basis for their later popularity can be seen here.)

The bill died in the House, but it’s fascinating to see how far ahead of the curve Paul was/probably still is on currencies.

Below are highlights from his address, titled “Legalize Currency Competition.” Emphasis our own.

“As with most monetary malfeasance throughout history, the United States government’s drive to monopolize the issuance of money came about during a time of war. In order to fund its military operations during the 1860s, the federal government for the first time in its history issued paper currency which was unbacked by any commodity and was to be accepted at face value as a legal tender.”

“For the past 40 years we have lived in a world in which the issuance of money is completely at the discretion of governments and central banks, and we are reaping the consequences. The fiat money standard has led from one financial crisis to another, as each attempt to inflate out of the previous bubble only sows the seeds for the next crash. Real wages remain stagnant or decrease, while price increases resulting from inflation of the money supply force American households to go ever deeper into debt in order to maintain a constant standard of living.”

“The only way to counteract this problem is to break the government monopoly on the issuance of money. The Constitution does not grant the federal government this monopoly, a fact which was not in dispute for nearly a century after this country’s founding. The federal government has become complacent, forgetting the need for sound money, and the only way to break this complacency is to break the monopoly.”

“Historically, legal tender laws have been used by governments to force their citizens to accept debased and devalued currency. Gresham’s Law describes this phenomenon, which can be summed up in one phrase: bad money drives out good money.”

“Just as pernicious are the sales and use taxes which are assessed on gold and silver at the state level in many states. Imagine having to pay sales tax at the bank every time you change a $10 bill for a roll of quarters to do laundry. Inflation is a pernicious tax on the value of money, but even the official numbers, which are massaged downwards, are only on the order of 3-4% per year.”

“HR 1098 is certainly not a panacea, as there remain significant structural problems in our banking and monetary system that still need to be addressed. But allowing for competing currencies will enable Americans to choose a currency that suits their needs, rather than the needs of the government. The prospect of Americans turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral.”