It’s no secret that spending is down these days. And while I think it’s about time that American citizens actually start saving money, it undoubtedly hurts businesses when consumer spending tanks.

One of the reasons consumer spending is down, other than an increased propensity to save, is simply that during the mortgage meltdown, massive amounts of money disappeared as housing equity morphed into devalued foreclosure sales. The Federal Reserve and Treasury have responded by pumping an ungodly amount of money back into the economy, which raises serious concerns about future inflation. But for now, much of that money is stuck in the banks and velocity is extremely low. Thus, businesses are still hurting for sales.

So what have some city governments and businesses done to combat this? Well, they’ve decided to print their own money. MSN Money highlights one such example:

“Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy — no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.

“It is, after all, perfectly legal for anyone to issue currency, as long as it doesn’t look too much like a U.S. dollar. Thus was born the Detroit Cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center.”

Indeed, this money appears to act more as a coupon which is accepted by a handful of businesses. However, in some cases these currencies have really taken off, such as “The western Massachusetts berkshare [which] is accepted by an estimated 400 businesses and has circulated to the tune of $2.5 million.”

In the end however, most of these currencies fail. Sociologist Ed Collum’s study of 82 of these currencies showed the survival rate to be only 20%.  It is, however, interesting to see how currencies can formulate from the ground up instead of the top down. It also makes one wonder whether people should be able to use gold or silver or something else like that as a competing currency. That is, after all, what is written in our constitution.