Money is easy to understand. And if we had any money, well, I don’t know what we would do but I know our kind and caring government, staffed by credentialed morons under the watchful gaze of elected sleaze monkeys, would immediately act to snuff that nonsense out.
Money is something of value which is conventionally and conveniently exchanged for other things of value. What we have, instead, is government debt. Every dollar bill you own is evidence that the government owes you . . .a dollar. But be not concerned because the government debts to all those who have dollars, and that means any and all without regard to how those dollars were obtained or who or what obtained them, worldwide, are all secured by the full faith and credit of that self-same kind and caring government.
But it can all work out, provided we transact exchanges between one another based on value, that is, goods or services, and prices can be established and stabilized by large numbers of similar transactions, that is, the market. Government debt is almost like money, in the way it can work out. And if government injects additional debt/dollars into circulation by buying goods and services it needs, it is still mostly okay. Full faith and credit, right? Debt/dollars are still matched up with goods and services of value.
We can complicate things by banking accommodations like accounts and credit cards and charitable moochery, but if it’s all still a matter of dollars traded for goods or services, with glitches smoothed out by market responses.
Well, okay, but what happens if the government starts giving out dollars without getting goods and services in return consistent with market prices? What happens when payments are made where no value is exchanged in return, like for the so called social safety net, or international aid, or crony capitalism, or covid cash?
In that case we have an increase in dollars available for a finite supply of goods and services which has not increased. Law of supply and demand — prices go up on everything you buy and everything it takes to produce what you need to buy together with the costs of getting what you want to buy to you.
And if that is a spot of bother, how about the government’s increasing its debt by borrowing? Hey, just pay it off with more dollars later. Print more dollars; pay the debt with more debt/dollars and kick that can of worms down the road as many times as you must. Damned the mixed metaphor; full speed ahead. It’s all good because full faith and credit, right? We have sputtered along like this for a good long time, at least since we went off the gold standard and probably a long time before that.
And what exactly is full faith and credit? It is short for, “You can trust me, you know I am good for it, right?” So, look around. Is the government trustworthy, and I don’t mean this president or congress or any of the ones before. I mean the government that does money.
We are so screwed.