Money
2 min readJul 15, 2023
What Is Money and Where Does It Come From?
This question was asked in another thread and I responded. I decided to make my response a stand alone story. Here it is.
This essential question has long ago been answered. Money is a store of value and a medium of exchange. Anything that provides those functions is functionally "money."
Money comes/came from the need for something more fluid than barter.
Need created money, money defines itself. Money is that which satisfied the need for a medium of exchange. Barter is weak and awkward; money sped the exchange of goods and services.
Money greased the wheels of commerce. Coins, then paper, then ledgers. Maybe someday, blockchains, really just a different kind of ledger.
Some people are advocating for governments to create money and give it to the poor. That is not an evil agenda, just not all that popular. The FED will never do that, if gives money to banks not directly to people.
Congress does give money to people, has and will. This is called fiscal policy not monetary policy. Congress has put constraints on fiscal policy with a thing called the debt ceiling. Congress has constrained its ability to create money.
The Fed has no such constraint except for the limit of the Executive Branch of government's tolerance for the actions of the board of FED governors. My opinion, the FED is much more effective in executing their mandate than Congress.
The people we elect to Congress are much less capable of doing their job than the people the Executive appoints to run the FED. Congress is dysfunctional because the electorate is dysfunctional. There lies the weakness of democracy.
Be thankful we do not elect the FED governors. While we don't elect the members of the SCOTUS, they were selected in a manner that what highly influenced by electoral politics and that has badly damaged the institution.
TEK