Now here’s a coincidence to ponder — the same day that the Democrats in the Senate proposed allowing the federal government to borrow another $1.9 trillion, a columnist for the Wall Street Journal called for America to sell its gold.

The scramble to raise the debt ceiling is designed avoid what the Associated Press called “a first-time default on obligations” by the American government. The call for the government to sell its gold hoard was issued by the Wall Street Journal’s liberal op-ed columnist, Thomas Frank, who noted that the price of gold is over $1,100 per ounce, near its all-time high in nominal dollars.

“At that price,” he calculates, “the Treasury’s 261 million of ounces of gold would be worth nearly $300 billion.”

Mr. Frank’s column is a refreshing one from the liberal side of the spectrum, in that it starts with a recognition of the importance of the gold price as a trigger for government action. But I would go Mr. Frank one better. Rather than sell the gold, why not distribute it free-of-charge per capita to all U.S. citizens?

After all, how did Treasury get all that gold to begin with? People had deposited their gold in exchange for gold certificates, which were promissory notes bearing the legend “payable to the bearer on demand.” Then, the United States defaulted on that sovereign promise and kept the gold for its own account.

Mr. Frank reckons that gold’s allure “is especially strong for the disaster cohort—for those who believe that hyperinflation is just around the corner, that default by the U.S. government is a real possibility; and that democracy itself is something of a fraud, a populist Ponzi scheme pulled off by slimy politicians and the central bankers they’ve hired to run the printing press.”

In fact I know of few partisans of constitutional money who oppose democracy. What they oppose is veering from the constitutional concept of money. They oppose it whether it is done by kings or democrats. The record is clear that the American revolutionaries understood that gold and silver was honest money and saw it as a principle of good government.

Yet gold and silver as money have not fared well. Since the Federal Reserve was formed in 1913 to provide for “an elastic currency”— is that like an elastic measuring rod? — the so-called “dollar” has lost more than 95% of its purchasing power. Why does Mr. Frank, or anyone, believe that anything other than gold and silver as money would have been countenanced by the founders — or, for that matter, that the last 5% of the “dollar’s” purchasing power is sacrosanct and won’t melt away, too?

Further, history suggests that the purchasing power of legal tender irredeemable paper-ticket-electronic money — which is what we have now — will depreciate to zero, because there always comes a time when, for whatever reasons are in vogue (bank bailouts, health care, a weak economy), the issuing authorities can’t resist the temptation to over-issue.

Mr. Frank advances the idea that, as he put it, “[o]ne reason gold has been bid to its current stratospheric heights is because more and more investors and fund managers have signed onto this dark belief that America’s judgment day has finally come.”

Gold, however, has appreciated by double digits in all the major currencies. In the case of the dollar, it went up every year since 2001 with average appreciation of 17%. If Wall Street had a mutual fund or some other scheme with no down years and double-digit average appreciation per year over the last nine years, don’t you think you’d be hearing about it with positive commentary from all of the financial press and advertisements from investment firms?

As for the hedge funds that Mr. Frank believes would be in financial distress if the price of gold tanked, it is my belief that they are not leveraged to gold and that there is little possibility that if the price of gold collapsed there would be adverse systemic consequences as a result of their positions, which my reporting suggests amount to less than $20 billion.

What might be a problem, however, if the price of gold continues to increase, is that according to the Office of the Controller of the Currency, American commercial banks have notional contracts for more than $100 billion in the gold market, most likely on the short side. Banks could lose billions. Is this part of banks’ “proprietary trading?” Why should taxpayers subsidize this kind of gambling by commercial banks with the “lender-of-last-resort” bailout facility at the Fed.

But the oddest element about Mr. Frank’s column is that it exhibits a liberal who has failed to grasp that labor has an even greater interest in Constitutional money than capital does. At the end of the day, as has been the case for 5,000 years, as proclaimed by the American Federation of Labor in election of 1896, “Gold is the standard of every great civilization.”

Mr. Parks, executive director the Foundation for the Advancement of Monetary Education and a contributing editor of The New York Sun, can be reached at lparks@fame.org.