I understand the view that just printing money is theft. But one can equally argue that for a corporation to issue more shares is theft. In both cases, the earlier holder knew that it might happen before it did, so I'm not overly sympathetic.

Besides, the national debt is already well above the point that anyone could honestly expect it will ever be paid back. So additional borrowing now just means more names get added to the end of a long list who may someday get an unexpected windfall, but more likely will be left holding the bag when the ability to borrow more runs out. As it must, because the expansion of the debt (and especially Social Security and Medicare which aren't included in the official debt number) makes it a pyramid scheme.

If we were having this conversation back in the Reagan era, it might still be possible to repay the whole debt through such means as auctioning off all the federal land in the West, which ought to be divested anyway for multiple reasons. But now, I don't believe repayment is possible at all, which leaves the choices of inflate it away, or repudiate it as Cuba did. Of those two, I'd rather inflate. That way the last lenders at least get something. (Besides which, the 14th Amendment, Section 4 appears to forbid repudiating.)

Nope. You cannot contract out of legal tender that is the very definition of legal tender.

"money that is legally valid for the payment of debts and that must be accepted for that purpose when offered" https://www.merriam-webster.com/dicti...

In printing money, the government devalues money in proportion to each person's wealth. In borrowing, the government devalues each person's wealth in proportion to the taxes they pay.

"Legal tender" just means you have to accept it in discharging a debt UNLESS you have contracted otherwise. Objectivists can just contract otherwise.

Yes. Inflation is a tool for devaluing debt and making the taxpayer foot the bill. The problem is that it is a wheel which spins out of control once started. We've had an inflationary policy for decades now (since coming off the gold and silver standards) and all we see is rampant (and ever-increasing) inflation in every market aspect. The prices for goods have to continually go up to justify the annual raises people need to keep up with the rising prices - repeat ad nauseum.

Bingo! +1

In more "objective" terms, creation is better defined as organization - taking what is already present - but in a disorganized state - and giving it order and purpose. It is taking raw materials and producing finished goods: the entire process yielding a more valuable product at the end. +1

I do have to object to the stock market claim, however. Investment actually does have to come from savings and not credit. One can not invest what they do not already have. Much of the 1929 Stock Market fall came because of speculation - and when those speculations failed the creditors were left high and dry and went under. It is also one of the primary dangers of our current banking system for the same reason: that banks are only required to actually keep a small fraction (5-10% I think - please correct me) of their reserves - the rest they can speculate with. That's why bank runs are also so dangerous: because it becomes a first-to-withdraw panic.

I would also point out that eventually credit runs out - even for nation-states. We are the most over-leveraged nation in the world presently between our massive government debt and our out-of-control consumer debt. That is not investment, but slavery. One is selling one's own future when speculating with credit.

Printing money devalues the currency, resulting in inflation, so it really isn't much better than incurring debt.

Either one guarantees an inflationary spiral at some point. At least printing fiat money just causes everything to spiral up with everyone paying. Borrowing by the government enforces the spiral however it has a dampening effect on private sector expansion because now the private sector must compete for whatever capital is available. Government will pay back because of the inflationary tax on the poor unsuspecting, naive taxpayer.

This is the dirty little secret that the Central Banks have and that governments love. Welcome to the wonderful world of Keynesian philosophy......

Here is the exact statute.

"Today the legal tender law in the US is 35 USC § 5103 which states:

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.


Why legal tender laws do not require government monopolies on money absolutely, they are almost always used for that eventually. You just wrong that any Legal Tender law is consistent with Objectivism..

different sides of the same counterfeit coin....

Actually, the two go hand in hand. Printing money reduces the value of the dollar and borrowing at the current dollar value and paying it back with future dollars of lesser worth is effectively an engineered discount. Only the government can get away with this kind of fraud. It's grand larceny pure and simple.

The problem with "money" stems from the Constitution which decreed that GOVERNment was given total control and decreed that any other money was "illegal'.

Nothing new, but that doesn't make it a good idea.

Why does defining "legal tender" become necessary for an Objectivist government to fulfill its primary function of protecting individual rights?

The government “picks winners” every time it buys, sells, borrows or leases anything, monetary or otherwise. The main consideration should be whether the process of doing so is transparent and fair, according to Objectivist standards.

Disney is a private corporation, and “Disney Dollars” are an obligation for Disney to provide goods or services to the bearer. By contrast, “money” issued by a government is an obligation for that government to provide . . . what?

Conclusion with no rational basis.

The choice of which free market currency to use would be a case of the government "picking winners." We might imaging an open bid of some kind, as for buying pencils or aircraft carriers. Here in Texas, the government is mandated to make the "best purchase" as opposed to being forced to accept the lowest bid. But the historical evidence is that when Andrew Jackson "killed the monster bank" he put all that federal money (gold) into "pet banks" whose directors where favorable to the Democrat Party.

The government can certainly issue its own money, just as Disney does.
https://en.wikipedia.org/wiki/Disney_...
Why not?

Dale, please cite a legislative definition of "legal tender." You seem not to know what it means. You seem to think that it is a government monopoly on money. It is not. In point of fact, an "Objectivist" government would, indeed, need to define "legal tender."

You do not know what "legal tender" is.

RELISH

I got into numismatics ("coin collecting") only later in life, about 20 years ago. I knew about hard money and inflation since I was a teenager in YAF in the late 1960s. I read books from FEE just before I was introduced to Ayn Rand. All through the hard-money run up in the 1970s, I bought silver and gold coins, but never cared about "numismatics" per se. Yes, I had different kinds of British Sovereigns, French 20F, Russian 5R, etc., etc., but that was just for the novelty of them all.

A couple of incidents and opportunities turned my head and I joined the ANA and began researching and writing. Selling articles was easy enough. One of them garnered an award nomination from a Smithsonian curator for correcting the Encyclopedia Britannica. But it has been learning experience all the way. My first interests were Mercury Dimes. I spent a lot of time (and money) on ancient Greeks. I just edited a chapter for a book about US Obsolete ("wild cat") paper money.

My point is that I have been learning the facts of economic history from the numismatic evidence.

Allow me to suggest that you accepted the teachings of conservative polemicists about "fiat" and "legal tender" - as did I; as do we all. Once you dive into the history, you find a different story. The truths are the same. Truth is eternal. That's what truth is. But the narratives are arguable.

In Human Action von Mises said that advocates of the free market and advocates of socialism agree on the facts: a certain commodity had a certain price in a place and at a time. What they argue about is what it means.

Let me offer this: Legal tender is not a government monopoly on money. Legal tender is only a government declaration that this gold coin or slip of paper is money, as opposed to being, a medal, commendation, or award, or being a description, contract, or a resolution.

Agreed. ignoring an O government, both borrowing and printing take resource from the private sector, so in that sense they seem similar. However, empirical evidence seems to show borrowing (especially honest borrowing) is less damaging.

True, an Objectivist government could borrow money under extraordinary circumstances, such as defending itself and its citizens against an attack that threatened its (and their) very survival. It could do so by issuing bonds denominated in any free-market currency in use at the time. Such borrowing could occur without having a central bank or legal tender laws in place.

No problem with free market creating a tool to make trade easier. BUT, when government decrees that only the corrupt banksters who are approved can create legal tender it is not a free market as referred to by Harry Browne,

I am not sure that under an Objectivist government it would never borrow money. An O government could not print money, as legal tender laws are not consistent with Objectivism.