Mike Lee, U.S. Senator from Utah, recently sponsored a bill entitled the “Federal Reserve Modernization Act.” It is the counterpart to Rep. Kevin Brady’s Sound Dollar Act of 2012 (which enjoys 35 House cosponsors and, of equal note, already is drawing liberal fire). The Brady/Lee legislation represents an important first step forward to restoring good money to America: money that can provide a foundation for prosperity with equity, security, and, of at least equal importance, constitutional integrity.
The Sound Dollar Act/Federal Reserve Modernization Act directs America’s central bank to monitor the prices of major asset classes including gold and the value of the dollar relative to gold. Gold is the only asset twice specified. One of its three broad categories is entirely devoted to gold. Gold thereby emerges designated as a more important factor in monetary policy than it has played in two generations.
Mr. Brady and Mr. Lee thereby offer a first step toward Constitutional money, which is a dollar defined as a fixed weight of gold. Constitutional money was the good money, conceived by the Founders and installed by George Washington and his Treasury Secretary Alexander Hamilton, which gave the impetus to America to prosper. Both Lee and Brady demonstrate astute awareness of Constitutional history and performance.