Launched in January 2009, the Sound Money Project at the Atlas Economic Research Foundation is engaging experts in the task of developing and refining a set of “sound money” principles with relevance to the world’s current challenges. The project also intends to mobilize think tanks and scholars to be more active in promoting public policies that are consistent with these principles.
The cover story of Atlas’s Spring 2009 edition of Highlights (PDF here), entitled “Are We All Inflationists Now?”, provides a description of the project. More recently, Atlas has held small meetings with experts from our network to develop guidelines and sharpen strategies for energizing the debate on Sound Money, including a panel session on the topic at its 2009 Liberty Forum in Los Angeles.
The topic of sound money has enduring relevance for those who cherish a healthy society and free enterprise. But a period of neglect set in during the low-inflation “long boom” of 1983-2000. As much of the think tank community shifted focus from research to advocacy, almost no one sounded the alarms on the scourge of inflation, which has returned with the Federal Reserve’s responses to shocks within the real estate market and financial services industry. The United States’ long-term challenge with unfunded liabilities in the Social Security and Medicare programs will exacerbate the problem.
Against this backdrop, there is little consensus among the community of monetary policy scholars about what is to be done. Has the world changed in fundamental ways to reduce the relevance of previous generations’ contributions on sound money? Or does our period cry out for leadership to endure a period of “tough medicine” to return the U.S. to long-term monetary health?
The first goal of Atlas’s Project on Sound Money is to answer these questions, and to develop a set of prescriptions that can serve as the “North Star” of future educational and advocacy efforts by free-market organizations.
The second goal will be to mobilize such organizations to raise awareness throughout the United States about the problem of inflation, and to raise interest in the set of solutions that come out of the project’s first phase.
While monetary policy is not inherently exciting to ordinary Americans, we believe that there is great potential appeal to energize the general public – especially if the sound money message is articulated with attention to key moral precepts, including: compassion for the poor (society’s disadvantaged communities suffer the most from debasement of the currency) and the ethics of good stewardship (government has a moral obligation to preserve value and be a transparent servant of the public interest).