A small but growing number of cash-strapped communities are printing their own money.
Borrowing from a Depression-era idea, they are aiming to help consumers make ends meet and support struggling local businesses.
The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount — say, 95 cents for $1 value — and spend the full value at stores that accept the currency.
Workers with dwindling wages are paying for groceries, yoga classes and fuel with Detroit Cheers, Ithaca Hours in New York, Plenty in North Carolina or BerkShares in Massachusetts.
Ed Collom, a University of Southern Maine sociologist who has studied local currencies, says they encourage people to buy locally. Merchants, hurting because customers have cut back on spending, benefit as consumers spend the local cash.
"We wanted to make new options available," says Jackie Smith of South Bend, Ind., who is working to launch a local currency. "It reinforces the message that having more control of the economy in local hands can help you cushion yourself from the blows of the marketplace."
About a dozen communities have local currencies, says Susan Witt, founder of BerkShares in the Berkshires region of western Massachusetts. She expects more to do it.
Under the BerkShares system, a buyer goes to one of 12 banks and pays $95 for $100 worth of BerkShares, which can be spent in 370 local businesses. Since its start in 2006, the system, the largest of its kind in the country, has circulated $2.3 million worth of BerkShares. In Detroit, three business owners are printing $4,500 worth of Detroit Cheers, which they are handing out to customers to spend in one of 12 shops.
During the Depression, local governments, businesses and individuals issued currency, known as scrip, to keep commerce flowing when bank closings led to a cash shortage.
By law, local money may not resemble federal bills or be promoted as legal tender of the United States, says Claudia Dickens of the Bureau of Engraving and Printing.
"We print the real thing," she says.
The IRS gets its share. When someone pays for goods or services with local money, the income to the business is taxable, says Tom Ochsenschlager of the American Institute of Certified Public Accountants. "It's not a way to avoid income taxes, or we'd all be paying in Detroit dollars," he says.
Pittsboro, N.C., is reviving the Plenty, a defunct local currency created in 2002. It is being printed in denominations of $1, $5, $20 and $50. A local bank will exchange $9 for $10 worth of Plenty.
"We're a wiped-out small town in America," says Lyle Estill, president of Piedmont Biofuels, which accepts the Plenty. "This will strengthen the local economy. ... The nice thing about the Plenty is that it can't leave here."
28 comments:
I personally think it's a good thing that some communities are printing their own currency. Aimign to help consumers make ends meet and local supporting local businesses is what we need in a time like this. Ed Collum has a point though as he states that "they encourage people to buy locally; merchants hurting because consumers hace cut back on spending; and benefit as consumers spend the local cash." I don't know this is grown up stuff and I'm not officially grown yet.
wow. I never really thought people, much less the American government, would seriously do that. Until now. I guess it shouldn't suprise me. I haven't really researched or even thought much about the issue of printing money, but it seems to me that this is just one more example of how we have tried to fix one bad decision with another bad decision. And it makes me wonder if we will fail, for the first time in history, to pay back our treasury notes, bills, and bonds. That will be one sad day for America. Who knows? Maybe we would have been better off collecting gold nuggets...
This sounds like a disaster in the making. Yes people will spend more, but I doubt that they will be willing to go back to the old ways when things escalate. Without regulation, those printing the money would print way too much, causing inflation and causing merchants to reject the currency. During the Civil War, most states printed their own currency, this made travel extremely difficult as no one would take their money. It also caused widespread inflation. This printing of money might stimulate the economy for the short term, but unregulated, in the long run, it will cause an enormous mess that will take a lot of time and effort to clean up.
I guess its good that there trying to help the communities.
But i didnt know that communities could print there own money that was weird to me??
That seems very cool. The idea that you can get more currency while you pay less seems favorable. I guess it is sorta balanced. One thing I do fear is that this might be an early stage of inflation for years to come. I don't want everyone to keep a lot of money and be able to buy things they couldn't before because demand would go up and supply would ultimately go down. Hm, I hope this new system of currency does benefit Americans but don't kick us in the butt in the long run.
~Isaac
I think this a good way to encourage poeple to spend. It is good for people to support their community. Whatever people can do to help support each other during this time is goint to be positve.
Wow...there's no way this is real. I can't imagine how printing more cash is going to solve any problem. If there is no actual capital circulating through consumers hands, this is like playing monopoly with blank pieces of paper.
This is a really interesting phenomenon. I had no idea that communities did this. But is it only a temporary measure? And if so, does the public know? They will probably be reluctant to go back to American dollars when they are getting free money right now.
I can see this becoming something that causes tension and confusion in the future, creating travel problems and a drop in national patriotism. Also, considering the government doesn't have any money, giving out nickels for free seems like a bad idea. I guess it is like an itsy-bitsy stimulus package that will help marginally boost local economies for a very short time. Whatever helps us sleep at night...
It's good to see a community trying to do something positive. In a time like this all communities should be printing their own currency.
I can't believe this is legal. How is it that different communities can print their own money used only in that neighborhood. I never thought that the American government would come to this. It might seem to work in the begining, by how could this possibly fix what seems to be a very big problem. I think this will eventually hurt a lot more than it would help.
I think this is a good idea to help people spend their money. It is very cool to see how a community can do something like this.
Hopefully it isn't to soon for the inflation, because people will get used to this fast. Then again this is a good time for communities to be printing their own money.
I think this is an ingenious idea, and a good way to revive the economy. I also think this idea will support the return of the local business, and hopefully help break down some of the habits we have of going to businesses like wal-mart or target for every need. The breakdown of monopolies and big business is a needed step in today's society.
Ihis is kind of a bad idea. It is just fixing a bad problem, with a bad solution. When the economy is once again where it was before the recession, the communities that printed their own money will be left in the dust, making their money almost worthless.
If people can be convinced to spend more with local money, why can't they just spend more with regular U.S. money? Communities printing their own money can only end badly. We've seen this all throughout U.S. history, you have to have one central organization(the gvmt) to print money. With everyone printing money, no one accepts any of it, and everyone prints too much. It's a mess.
I think that it's sort of good that communities are making their own money. It might also be bad because they dont have a limit of what they have to make and they can make to much money.
I don't really know how to feel about this. I know that printing money is a good way to encourage people to buy and give the economy a boost, but I just have a horrible feeling about how it will go in the long run. I believe that eventually this currency will undergo inflation and then the money will be worthless. People who own of this money will then be left with something that is basically not worth anything and will then be wost off than when they started. Hopefully it all turns out all right and this actually does help strengthen the local economy.
This seems like a good thing in theory. But i can definitely see how this could cause some problems in the long run. The US dollar is made in quite a complicated way to avoid counterfeiting and is highly regulated to avoid inflation or other problems. If these local communities are monitoring their money very closely and making it difficult to copy it then I think this concept could be very beneficial.
I like how they are trying to keep their communities in line. I really dont think its a good idea for communities to print their own money because it may be easier to make fake money. They should just keep it the way it is and just help their community another way
I think that this is a very good idea, and from the way it sounds, might really be able to help the economy. Because the cities still accept normal money, it should not hinder any business from visiting customers nor should there be a rocky transition once we're out of this mess. This is a great way to help not only the towns in need in this economy, but also the people who are struggling.
its great that some communities are printing their own money, although i didnt think it was legal, but all in all a great way to help people out
i think this idea will turn out to be one that will have positive outcomes. the large markets now have too much power and the small business owners do not get enough support. this is a way to allow small business owners to finally keep up to the speed of the larger ones.
ummmm i don't hink this is a good idea because we had this issue along time ago and they got all fustrated with the whole thing. So i think that they should start a reward system or something so as not confuse the currency system
I think this will help the local businesses. By helping make ends meet gives people hope that things will get better and with that better attitude things will get better. they have to get better at some point, we just dont know when that point is.
This sounds like a good idea for now. It will obviously help communities economically quickly. Over time people will get use to it, so when and how do you stop. I think if this stays under control and only continues until there is some kind of stability in the economy this could work.
This may e a good short term fix but what happens when even the local moneys value depreciates? yes people buy localy but can the money be turned back into american cash or does the local hardware store have to make their own nails instead of buy from wholesalers?
I think this is really cool how the people are getting all involved to support their community but i dont think they should be printing their own money just doesnt seem right...
It is actually a really comforting measure which is being taken in the creation of this local currency. I'm not extremely clear on how this will work out in the long run but its not bad for right now....???
This is the first time I've ever heard of this, the more I think about it the more it makes total sense. The printing of monies encourages economic growth within the community, thus providing growth and wealth for those involved. I think this is a great idea as long as the intentions are to benefit the community and not a quick opportunity to get wealthy.
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