Senators Rand Paul (R-KY), Jim DeMint (R-SC) and Mike Lee (R-UT) introduced legislation this week that would eliminate all taxes on gold and silver coins, elevating them from the status of "collectables" to "legal tender" of the same status as Federal Reserve notes.

Currently, only the state of Utah recognizes gold coins as legal tender, but Republicans in 12 other states are pushing similar measures, in spite of warnings that such laws could serve to undermine the value of the U.S. dollar.

"In order to rebuild strength and confidence in our economy, we need both the fiscal discipline to cut wasteful spending and the monetary discipline to restrain further destructive monetizing of our debt," DeMint said in an advisory. "This legislation would encourage wider adoption of sound money measures, and that’s a step in the right direction."

"As the government runs massive deficits, uncontrolled spending, and an increasingly unsustainable debt, governments and the bureaucrats in charge are often forced to take an easier approach: to monetize the debt, inflating the currency," Paul added. "These implications can be devastating, leading to higher interest rates, which lead to higher borrowing costs and slower economic growth, but most importantly, destroying the savings and standard-of-living of all Americans. This bill will hold politicians and the Federal Reserve accountable; acknowledging that states are serious about an alternative to a weakening dollar."

Paul's father, Congressman Ron Paul (R-TX), has long been an advocate of returning the U.S. currency to a gold standard, essentially pegging the value of dollars to the price of gold on open markets.

The vast majority of economists insist that a return to the gold standard -- which was ended by President Richard Nixon -- would be disastrous for a global economy driven almost exclusively by fiat currencies.

However, a small but growing minority of economists, who want to see the entire fiat paradigm ended, counter than creating money through central banking is what inflates market bubbles and economic uncertainty.

(H/T: The Hill.)