There is no such thing as government money, but there are governments. If one goes to work for a newspaper and tells people all the facts about how much money they should write their stories with, that’s the authority telling them, so people will do that. In the same manner, the government may issue paper money for various purposes. The only problem is that nobody gets any money.
Money is not the same as anything tangible. You can’t buy a hamburger with money. You can’t buy a house. So if a newspaper prints a story about how much food a house costs, you might think there’s money in there that you can use to buy the house. But what’s the difference? It doesn’t have any relationship to the real economy. For the newspapers to make money from this information, what they have to do is get a printing press in order to produce all these copies of these articles. The news of these stories comes through the printing press and makes it into a valuable commodity that other newspapers might not have or be prepared to pay for. So this is the only way that the newspapers can pay their printing costs. So the government must make sure that nobody has more than what they’ll put in to print this newspaper. But this is a government function. It’s not an independent institution. And the government can decide that this particular newspaper has a higher surplus than the other newspapers and it’ll get this newspaper money, so now everybody has a bigger surplus than they’ve ever had. The newspapers get richer; everybody else, as a result of this monopoly, gets poorer. And what that means is that the government is going to come out with this big check, and they’re going to pay for it by cutting taxes on anybody who’s earning less than their income. So it creates a very serious problem.
What about a currency free market?
This is the problem of central banking. In a currency free market, you have people who have savings in a store of savings (cash), who they can store in a bank. They can withdraw the money that they have and spend it (or not spend it); they aren’t going to walk away from it when the bankers come around and demand something from them. You know, in a currency free market, you don’t have an idea of what people are going to spend their money on.
So, in a currency free market, bankers are going to be using the banking system to try to buy the money. The only thing that keeps the
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