A group here in Portland has taken the eat local movement one step further and started its own currency. Cascadia Commons has developed Community Way Local Exchange Trading System (LETS), "a non-profit, local community currency that more efficiently provides value to traditional dollars exchanged in a local economy."
Local businesses could, for example, pay their employees in Cascadia Dollars (for some percentage of their salary); dollars could in turn be used at participating businesses, but would be limited from being spent elsewhere due to the borders of the economic region.
While the concept is pretty wonkish, the idea is this: use local money because, after all, we trust each other better than we trust some enormous national bureaucracy.Cascadia Commons is not alone, and the concept has been taken to fruition in several localities around the country. In Massachusetts, it's the Berkshares (cute); in Pittsboro, North Carolina, it's Plenty. Michigan has the Detroit Cheers. Most local currency can only be purchased from local banks (another reason to keep your account there), often available at a discount to the U.S. dollar, but able to be used as a dollar equivalent at businesses. And yes: you still have to pay taxes on income received in local currency, so it can't replaced the almighty American dollar entirely. Though, in theory, a local currency could be used for everything but taxes and trading (think coffee, tea, sugar, and oil), and local banks could trade you USD when you were ready to pay taxes or buy a box of chocolates.
Local currencies are active in a dozen communities in the U.S., with many more in the planning stages. In a climate in which the bigger the business is, the less we trust it, exchanging with people you can see and whose transactions you understand is looking more and more sensible.
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