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Thursday, December 16, 2004

Financial Heroin

I'm a privileged individual. I have two cards in my wallet that I can pull out at various places and people give me stuff. One is a pretty amazing thing called a debit card, which when I present the number on the card combined with the number in my head causes a certain decimal number to be added to the store's account somewhere while subtracting a slightly larger number (I've heard 35 cents) from my account at the credit union. I'm allowed to do this because the University of Michigan once a month performs a similar operation, subtracting a number from their account and adding the same number to my account. They do this because I spend a bunch of hours playing with a bunch of numbers which could mean nothing, but have some meaning if you know the context.

The other card is even more bizarre--the "credit" card. When I use it, the issuing bank moves a number, slightly smaller than the purchase price (although generally more than the 35 cents of the debit card) into the store's account, pulling this number largely out of thin air. In return, they assign a debt to me in the amount of the purchase price, expecting me at some later date to see that some other numbers are directed their way. I usually do this through their web site, having the numbers transferred automatically from my credit union account to the credit card bank.

These phantom electronic transfers seem like so much nothing--except they keep me fed and clothed and housed and amused. They still don't seem real, not as real as a paper check, say, which in turn seems less real than paper money. But even paper money is just so much ephemera.

Alex Wallenwein argues that that's exactly what it is, as are the checks and debit and credit cards and the numbers in the accounts. He says that our money isn't value; instead it's debt:

This currency we call "the dollar" today is nothing but irredeemable debt. It is a sad testimony to how low our republic has sunk to see that it lends its lawmaking power to such an obvious ruse as to call something that is nothing but evidence of a debt itself a "payment" for all debts, public and private!

Americans - like citizens and subjects of any other country in the world - are forced to use this totally denuded currency for utter lack of a viable alternative. They are forced to work for this debt, or acquire it by conducting a business in order to feed themselves and their families. In effect therefore, legal tender laws effectively force you and me to work for nothing - in return for the questionable privilege of being able to "pay" others with the exact same thing!
The rest of the story.