Q. Should the Constitution limit the amount of money the Congress can coin?
I toyed with this for awhile. Obviously, the more people there are, the more money is needed. Should the money supply be tied to the population count? Or should it be tied to the amount of gold in Fort Knox? Or should it be determined by the amount of land or other physical assets controlled by the United States?
After noodling these questions, I came to the conclusion that the supply of money cannot be limited at all.
Think about it. When one player in Monopoly has all the money, the game is over. If our money supply were a zero sum game, what would happen when Bill Gates has all the money?
If money were a zero sum game, then every dollar that rich people have would be a dollar less for poor people, and vice versa.
Assets can be created. Wealth can be created. We call it prosperity. How would it benefit society to legislate a maximum legal net worth, or a maximum personal income?
The American Dream is just the opposite. We tell our children that they can be whatever they want to be. The possibility, however remote, of becoming a movie star, or an NBA standout, or a corporate mogul motivates every new generation.
It is de rigueur for progressives to bemoan the gap between rich and poor.
I submit that the gap is irrelevant.
If the general public has adequate transportation, what does it matter that Warren Buffet has 20 or 30 automobiles and a private jet?
And if Buffet were to be stripped of all the perks of prosperity, and all the wealth of all the millionaires in America confiscated and distributed to the less fortunate, does anyone doubt that Buffet and Gates, and the educated and industrious middle class would have their money back within ten years?
Capitalism is not a legislated system, it is a natural phenomenon of human conduct.
People just naturally bargain with each other.Where there is no functioning monetary system, the folks will find other media of exchange. Cigarettes in World War II. Whatever works.
Money is the fuel of human activity. A dollar is a unit of people power. You can offer mountains of greenbacks or gold coins to a horse or a cow. They won’t budge. Only human beings are motivated by money.
More and more today, money is neither gold nor silver, neither greenbacks not bank notes.
Twenty-first century money exists mostly in computers and consists of digitized information stored in binary code.
Computers talk to each other and money moves instantaneously.
Our concepts of space, time and amount have exploded; are exploding every day. As bytes became kilobytes and megabytes and gigabytes, our notion of dollars went from millions to billions to trillions.
But have our sophisticated financial machinations really accomplished much?
Politicians and Wall Street minions can argue and posture, the Fed can raise and lower the interest rate, the currency gamblers can trade USD’s for yen or pounds and the Wall Street Journal can pontificate about M1, M2 and M3, but the true value of a dollar is and will always be determined in the underground economy.
What matters in the last analysis is whether the untaxed and unrecorded day’s wages paid in cash to an illegal immigrant will buy him enough to eat, a place to sleep and a modicum of human comfort and convenience, so that he will come back and work again tomorrow.
That is the de facto minimum wage and the de facto value of a dollar.
When will the Washington politicos learn to deal with it?