This recent Chicago Tribune story describes how residents from two Milwaukee neighborhoods are contemplating the issuance of their own private currency for use at local stores and businesses "... thus encouraging local spending. The result, supporters hope, would be a bustling local economy, even as the rest of the nation deals with recession." My sourcing wonk hat makes my head spend at the tactical and administrative challenges involved with such a plan. But we'll leave that to the generosity and advertising budget of some local credit union -- or maybe Wells Fargo would like to step up.
There might be a model here for Detroit. The "big three" could issue currency and sell it to local businesses (including the big box stores) at a discount against the Dollar. The stores would then introduce this "Save the Auto Industry Currency" as change in their stores. Meanwhile, idled UAW members could launch a War Bond style PR campaign to encourage area residents to gather and use this money to insure their continued employment and sustain the local economy.
Chrysler, Ford and GM could agree to redeem the currency at face value, or higher, in payment for a new vehicle following some future specified date. The currency would serve as a sinking fund for personal vehicle replacement and pre-payment to the 'big-three'(two or one) for future production. It could be secured by placing it in the first tier of creditors to be paid through asset liquidation should the companies ultimately fail.
Maybe it takes a village to raise an economy. Or at least creative thinking beyond shoveling $15 billion in band-aid bailout funding to the pigs squealing at the trough.
- Jason Busch