Printing Your Own Local Bucks

This is an innovative way to stir up the local economy:

They may be talking funny money, but it's not funny business.

Residents from the Milwaukee neighborhoods of Riverwest and East Side are scheduled to meet Wednesday to discuss printing their own money. The idea is that the local cash could be used at neighborhood 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 a recession.

"You have all these people who have local currency, and they're going to spend it at local stores," said Sura Faraj, a community organizer who is helping spearhead the plan. "They can't spend it at the Wal-Mart or the Home Depot, but they can spend it at their local hardware store or their local grocery store."

Incentives could be used to entice consumers into using the new money. For example, perhaps they could trade $100 U.S. for $110 local, essentially netting them a 10 percent discount at participating stores.

It's not a new concept—experts estimate there are at least 2,000 local currencies all over the world—but it is a practice that tends to burgeon during economic downturns. During the Great Depression, scores of communities relied on their own currencies.

And it's completely legal.

As long as communities don't create coins, or print bills that resemble federal dollars, organizations are free to produce their own greenbacks—and they'd don't even have to be green.

This approach has been taken by non-profit fundraisers for years in the form of scrip programs. We had one for the marching band in which people could by scrip for different businesses, a portion of which went to the fundraising organization. Printing a more general type of currency has its risks, of course, since it's unlikely that this type of currency will have the security protections that are built into U.S. greenbacks, and that makes counterfeiting easier and more likely.