Treasurer Tate Reeves was quoted Wednesday saying “the notion that the federal government is going to spin us out of a recession does not work — not long term.”

How right he is.

Unknown to most people, accounting procedures imposed on Mississippi by the federal government have resulted in the accumulation of about $6 billion in surpluses at Mississippi close of business for 2008. Of this amount, the Mississippi legislature has wisely set aside in an accessible form the $363 million Rainy Day Fund mandated by the Budget Reform Act of 1992.

Currently the surplus is invested primarily outside the state, where it does not benefit the people it belongs to — Mississippi taxpayers. If the surplus were returned to the people, according to accepted economic multiplier effects ,the result would be a $12 billion increase in Mississippi economic output, an increase in state revenue of 480 million, an overall wage increase of $6 billion for Mississippi workers collectively and an end to unemployment in Mississippi.

Rather than just distribute the money to taxpayers, though, there is a better idea. Mississippi could mint up that $6 billion into Mississippi silver dollars of constitutional weight and put them into a vault at the Treasury Department, creating a real treasury. The treasury could then loan out this $6 billion at zero interest under strict, conservative guidelines for land, home and long-term sustainable small business and farm loans.

As the Mississippi dollars spread through the state economy, an alternate inflation — proof Mississippi economy would be created co-existent with the inflation-prone federal economy we have lived under since 1865. This would result in numerous arbitrage opportunities for the state and for the citizens against the federal government, lessening the outflow of Mississippi output to federal coffers as Mississippians bartered among themselves with Mississippi dollars. The state’s share of the sales tax on this $6 billion would come back to the treasury as federal dollars that could be converted to more silver, creating more sound, honest money.

If this plan were to begin today, the Mississippi dollar would be worth 10.71 federal dollars. There is no federal or state law preventing the use of alternate currencies so long as taxes are paid in federal dollars and contracting parties agree to use the alternate currency; both the state and federal governments already maintain arbitrage accounts. This is also the economic arrangement intended by the U.S. Constitution; it was responsible for the greatest period of growth America has experienced and is well suited to an agrarian state like Mississippi.

Considering that $1.18 billion of Mississippi’s surpluses were invested in Fannie Mae and Freddie Mac, this plan is not so radical. Mississippi could end up winning after all, at least until enough troops get back from overseas for the federal government to invade us again.

Marty Ellerbe

Vidalia resident