The value of fiat money
No commodity backs it, but paper money still has well-defined value. We should ignore the ramblings of uninformed crypto pumpers.
Gold bugs and crypto bros argue that fiat money—paper money created by the government—has no value. Their logic says the supply can forever increase as nothing backs fiat, rendering it worthless. They're wrong. The currency's value comes from what it takes to get it, and how much you need. Understanding this will improve economic outcomes and help lawmakers set better policy.
First, the tax liability creates demand for the government's money. When the state creates taxes, it forces the people under its authority to make payments in its currency. No one cared about where or how to get the government's currency before the tax. But now they have a currency-denominated bill to settle, they’re forced to go and get it. If they don’t, they get gulaged or imprisoned.
The direct implication of this is that the government creates unemployment when it enforces a tax. Before the tax, no one was looking for paid work in that currency. After the tax, everyone is. It is that …