Saturday, December 17, 2011

Do we own our own money?

In a recent online debate, I was encountered with an alarming assertion by a liberal opponent. He claimed that the government can tax us as much as it likes, and can spend as much as it likes, because it owns all the money. That's right, ALL the money. We don't own our money, he said, the government does. The government printed it, issued it, backs up its value with the "full faith and credit of the United States" and put it into circulation. It allows us to use it, but it can take it back again whenever it likes.

To most people, this is alarming logic, but it's a tricky assertion to respond to. This was my response:

Presently, I am sitting on MY chair. It is not yours. It is not the government's. Nobody may take it from me unless I permit them to, because it is mine. I own it. Do you reject that notion? Do you reject the notion of ownership, the notion of private, personal, individual property rights? If so, your beliefs are utterly at odds with everything in Western society and everything in our constitution, which explicitly defends my right to property, and there is no point in having this debate with you (although perhaps another, more philosophical debate may be in order). If not, if you accept the right to ownership, your beliefs are inherently contradictory.

Why? Because money is just a unit of value, and just as money has value, other things have value. Everything I own is translatable into money, into the very same dollars you claim the government owns. I can use money to buy other things, and I can sell other things to attain money. These are trades based on my perception of value and another person or group's perception. One person is only giving up something they own (say, a chair) in exchange for RECEIVING something else which they will now own (say, money). If either party didn't own the things they were trading, the deal would be void! 

I did that once, as a joke because it was so silly. I asked my friend for his cookies at lunch, and he said no. So then when I wasn't looking, I tried to take the cookies, but paused, and figured it would be fun to try something else. Instead, I took his juicebox. He didn't notice. Then, two minutes later I said "hey sean, I'll trade you this juicebox for those cookies." He paused for a moment, and then said "okay, sure." It took him about 5 seconds to recognize I'd just traded him back something that was already his, and we laughed about it. Why did we laugh? Because it was absurd that I would be allowed to trade for something from Sean with something I didn't own, to take something he had the rights to in exchange for something I didn't. 

The guy who caught the Barry Bonds record setting baseball did not gain a single, tangible piece of currency when it happened. He acquired nothing which had the government's seal on it, or the Fed's seal or the Treasury Department's seal. Yet he owed the government a great deal more money when he caught it. Why? Because he had gained value. It was income, because he didn't own the baseball before, and now he did. Therefore, it's value was taxable in dollar format under the income tax. He didn't own the ball before, then he caught it, and then he did, so he had to pay income taxes on it. And when you pay income taxes on the income you get from your job, it's the same thing: you didn't own that money before, then you worked for it, and now you do. YOU OWN that money. Income is not just a net gain in pieces of currency with a fancy seal on it, it's a net gain of value; the money itself simply represents that value.

Since the ball was very valuable, that baseball fans income taxes increased so much that he was forced to sell the ball for hundreds of thousands of dollars. And when he did, that money was also taxed, just as the ball would've been, because the transaction of selling the ball did not increase or decrease his income. It was simply trading value for value. The ball and the money were the same, just different ways of representing the same net change in worth.

So if the government can take as much money from me as it likes on the justification that "it's not actually yours, it's ours", why can't it claim ownership of everything else I own? Can the government come and take my home, my car, my clothing, my furniture, my television, my computer, anything it likes? Does it own all that too? For sure, if I don't pay my taxes and I don't have any money left, it can take those things as payment, as a means of TRANSFERRING things I own into things they own. But that's just a payment of debt, not because the government owned them from the start and was permitting me to have them. Similarly, when it is for just constitutional reasons, the government can take my money via taxes. But not because it owned that money from the start. It is my money. And if they're not using it for legitimate constitutional reasons, it should remain my money.


  1. I like how you said your beef on this. Indeed, money - pretty much like religion - will forever be a non-debatable issue. The comparison using the chair is a nice adage, by the way.

  2. You do not own the bills or the computer credits in your bank account. Once you spend it on something, those items are protected by law, but until then you are borrowing the Government's property as an intermediary. You DO NOT own the money you have. However, you DO own Gold as a tangible item. You can also own Bitcoin because you have access to the Private Key and NOONE can take your private key unless you store it poorly or give it away. So you decide to trust, your Govt. or nobody.

  3. Here is a link to a possible definition. It seems there may be a discrepancy between cash and banked credits.