There is a lot of fear-mongering by politicians and other attention seekers surrounding our economy, debt, and inflation, but most of it is based on incorrect assumptions, or outright lies, about the nature of our currency. The US government is the monopoly issuer of the US dollar, so it can never fail to pay any obligation denominated in dollars. It can also afford anything that is for sale priced in dollars, including the excess labor the private sector rejects.
This gives the government a lot of power over our lives, but in a democratic system, any harm that comes from that is entirely our own fault for not choosing the best and brightest among us to lead. In short, any misery in our economy is strictly a political decision, not economics. To the government, the dollar is nothing more than a tax credit and unit of measure to denominate commerce and contracts in the private sector. It never “needs” its own currency back to enable it to distribute its tax credits as it sees necessary.
The real concern people should have is whether or not we have the resources necessary to sustain our economy and the infrastructure to distribute them, not the number of things we use to measure the value of those resources. A carpenter can run out of boards necessary to build a house, but can never run out of the inches, feet, or yards used to measure those boards.
Similarly, our government can never run out of the unit of measure it can produce at will unless it does something remarkably stupid, such as failing to raise the debt limit or, worse yet, passing a balanced budget amendment. Any delay in raising the ceiling will only be long enough to begin discomforting the wealthy donor class that has none of the misconceptions so rampant in the lower classes. The donor class will never allow a balanced budget amendment to get out of the propaganda stage because they understand that the red ink of the government is the only net source of black ink they have.
We are obsessing over all the wrong priorities when we concern ourselves with shortages of money in a country that can never run out of its own money unless it chooses to because our representatives are econ illiterate or pandering to uninformed constituents, placing their job security above the best interests of those constituents. I like Dr Wolfe, but the one area of difference between us is his field of study, economics. He is coming around, but his thinking is deeply entrenched in his family’s history in pre-WWII Germany, none of which is remotely relative to our economy unless we are someday required by the international community to pay reparations in currencies we cannot create or control.
The safest store of value in the world is still the US banking system that is just an extension of our government by way of a shared balance sheet. Thank your mom for her sacrifice to making your future more secure and give her a big hug, but try to make sure she doesn’t bury too much of her savings. The only advantage a cash hoard offers is the ability to manage a few days of natural disaster with more control over events, so don’t deposit all of it either.
