Thinking about paper currency lately, money backed by nothing so to speak. This is in contrast to money backed by gold. Meaning, first people passed around gold or silver, then they got tired of carrying it so they started passing around paper that could be redeemed for a certain amount of gold or silver.
It hit me today. There really isn’t such a thing as money backed by gold either. Gold only represents something. That something is called work. Gold doesn’t and cannot create prosperity in itself. All it can do is sit somewhere and look shiny. Gold only represents the prosperity achieved by people who do work.
Gold represents work better than paper because no self respecting person will give you his gold without you giving something for it in return that he wants. So when you are paid in money that is backed by gold, that gold is definitely backed by work done by somebody somewhere.
Can paper represent prosperity? Sure it can, in theory. But just like gold, it only represents prosperity that already exists. One dollar not redeemable for gold can theoretically represent the same amount of work that a dollar redeemable for gold can represent. But the problem is, one dollar not redeemable for anything can be printed really really easily. And when someone, say the fed, puts another dollar into circulation, that dollar still represents something.
It represents work that someone else did. There’s no other way to see it. When the Federal Reserve puts money into circulation at the push of a button, and people take that money and use it, that money is work stolen from someone else by the government.
So what is “stimulus”? What is government “spending”? Stimulus is when the government collects all the work done by the population of the United States, steals a part of that work, and uses whatever it stole to give it to a sector they like or deem important.
What is government “spending”? Well, it should be what a population gives to a government by social contract in order to protect the individuals of that population from other individuals who would try to hurt them. This should NOT cost all that much money, and therefore shouldn’t take much of the population’s work. But in the US, government spending is treated as if it creates prosperity instead of represents prosperity that already exists. So governmnet spending under Obama and Keynes is when the government decides it knows exactly where your work should be invested, and does it for you against your will by pushing the print button.
Screw that. This is insane.