Abstract
The Covid-19 pandemic, once again laidbare the fiscal vulnerability of U.S. municipalities. Economic crises can becountered by expansionary fiscal policy, but only if the governmental unit hasthe authority to issue legal tender. Whether the challenge is as acute aswide-spread disease or as slow and grinding as failing water infrastructure,without the ability to place itself in a deficit position, the municipality isunable to mitigate falling financial wealth in the private sector.
Despite the potential benefits of localcurrencies to municipal governments, they remain quite uncommon. This raritymay be attributed to the convoluted legal landscape surrounding non-federalcurrencies in the United States, as well as, a general failure to support localmoney through tax policy. The first issue accounts, in some part, for the slowproliferation of municipal currencies; while the second lends insight intotheir generally short life-spans. Through a close reading of the legal historysurrounding non-federal currencies and the application of monetary theorytowards local currency design, this paper aims to counter both of thesetendencies.
Keywords
local currencies, monetary theory, law and political economy, modern monetary theory
How to Cite
Fair, E. M., (2024) “Monetary Issuance and the U.S. Municipal Budget Crisis”, American Review of Political Economy . doi: https://doi.org/10.38024/arpe.385
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