PHOENIX - Arizonans who fear the federal government will make their folding money worthless may soon be able to substitute privately minted gold and silver coins.
The Senate Finance Committee on Wednesday took the first steps to making such coins legal tender in Arizona. SB 1439 would give them the same legal status as the bills and coins authorized by Congress.
Nothing in the proposal by Sen. Chester Crandell, R-Heber, would force anyone to actually accept these coins as payment for any debt. Their use would be voluntary.
But proponents said it's only a matter of time before the country suffers hyperinflation, making the greenback worthless.
"We need to have a lifeboat for Arizona so we can construct Plan B," testified Miles Lester.
The measure is crafted in a way intended to get around a provision of the U.S. Constitution that bars states from minting their own coins. But supporters also note it says states cannot "make anything but gold and silver coin a tender in payment of debts."
That, they contend, permits states to recognize coins minted by others.
Crandell said the ultimate bottom line is a lack of confidence in the dollar - or at least the real value of the dollar, what with the Federal Reserve continuing to print new money.
"I think you can see that all over the country," he said. Countries including China are moving to have their own currencies recognized as an international standard "because the dollar doesn't do what it used to do."
But Sen. Steve Farley, D-Tucson, questioned whether something else was at play. He said a similar Utah law adopted in 2011 was pushed by Old Glory Mint, a company that makes these gold and silver coins.
Beyond that, Farley said while the current financial system has its flaws, the country hasn't had the financial panics that occurred regularly in the 19th century.
"I don't see the need to go back to something that has proven to fail," he said.
But Sen. Bob Worsley, R-Mesa, said there may be reason to worry.
"We've never had this amount of debt as a country," he said. And Worsley said if people want the right to use silver and gold coins as legal tender, "I'm OK with that."
Sen. Michele Reagan, R-Scottsdale, said she wasn't going to speculate on the soundness of the dollar. But she agreed to go along, saying, "I don't see where it could hurt, either."
One thing the legislation would do is say taxes incurred by people using these coins "shall be paid proportionately in the same legal tender." Crandell said that is designed to ensure that people are paying only what they owe, without fear of losing value based on some artificial exchange rate.