Home
/
RELIGION & LIBERTY ONLINE
/
Samuel Gregg: Fiat Money and Public Debt
Samuel Gregg: Fiat Money and Public Debt
Apr 4, 2025 12:22 PM

On Public Discourse, Acton Research Director Samuel Gregg looks at fiat money and how today it “represents the end of a long process of development whereby governments have used their power of legal tender to use money to pursue various policy goals.”

This brief excursion into economic history hints at some of the deeper economic—not to mention moral—problems associated with fiat money. One is, as noted, the greater ease with which it permits governments to devalue currencies, thereby reducing the wealth of those with assets denominated in that currency. This surely constitutes an injustice to those individuals and businesses that have saved and behaved in a fiscally responsible manner while simultaneously letting the fiscally imprudent off the proverbial hook.

This underscores the second problem associated with fiat money: its facilitation of systemic moral hazard throughout entire economies. Moral hazard describes those situations whereby people are encouraged to take excessive risks because of the implied assurance that someone (usually the state) will bail them out if the enterprise or investment fails. From this standpoint, fiat money’s very existence arguably encourages the development of moral hazard throughout every sector of the economy. The high level of the U.S. federal government’s public deficit, for example, is at least partly premised on the unspoken supposition that the Fed (which is, after all, a government institution that operates within legal parameters set by Congress and whose members are nominated by the President) can simply print more money in paper or electronic form if creditors e worried that the U.S. government’s borrowings cannot be covered by anticipated taxation revenues, foreign borrowings, and its existing resources. This in turn encourages more people and governments to buy U.S. government debt in the form of bonds, which permits more deficit-spending, thereby encouraging a cycle of ever-spiraling public debt.

Read “Fiat Money and Public Debt” on Public Discourse.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Is Neoliberalism Dead?
The Chilean Miracle of the 1990s is usually pointed to as a win for the Chicago School of economics, which advocated laissez faire capitalism, limited regulation, and cuts in government spending. But that was then, and this is the era of Bidenomics and a “post-liberal” New Right. Are free markets as dead as General Pinochet? Read More… Louis Menand wrote a curious article for the New Yorker called “The Rise and Fall of Neoliberalism.” The article is curious on two...
Scorsese’s Moral Vision Shines Through Killers of the Flower Moon
This true story of the systematic murder of Osage Indians for their oil is both foreign and familiar territory for the director of Goodfellas, The Wolf of Wall Street, and Silence. Read More… What do we think about when we think about Martin Scorsese? Many of us think about gangster stories, especially ultra-violent, grisly, and operatic ones. He helped bring the genre into the modern age with his masterpieces Mean Streets, Goodfellas, Casino, and The Departed. Even when he strayed...
How States Strike Back at Federal Religious-Freedom Protections
Some states are working to circumvent recent SCOTUS rulings meant to protect conscience rights. Which states is what’s proving interesting, and disturbing. Read More… In the wake of the Supreme Court’s decision in Obergefell v. Hodges (2015), in which the majority of the court ruled that the Constitution supports a right to marry for same-sex couples, many Americans in the “wedding business” faced a dilemma. Bakers like Jack Phillips and web designers like Lorie Smith found themselves unable to deliver...
Discriminating Harvard
Harvard has a long history of taking race and religion into consideration when admitting students, unfortunately. Read More… The U.S. Supreme Court’s June 2023 ruling in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (SFFA), which invalidated the use of race as a criterion for college admissions, dominated several summer news cycles and prompted no shortage of opinion pieces and responses. Little of mentary focused, however, on the long plicated history that the university at the...
Can We Unlearn Race?
Does true individualism mean post-racialism? Read More… This three-part series on race and the right began with a look at some truly telling statistics about how badly American conservatives are doing at taking on racial issues. Politically, 85% of Republican voters are white—the most racially homogeneous the party’s been since 2016 and the rise of Donald Trump. When race is paired with religion, the numbers still tell an overwhelmingly one-sided story: white Protestants consistently dwarf every other racial and religious...
Halcyon: A Resurrection Without Salvation
The new novel offers an alternative future where the dead are raised and the past is forgotten, leaving us to answer the question, “What does life mean when time is our plaything?” Read More… Set in the opening decade of the current millennium, Elliot Ackerman’s Halcyon is a tale based on many alternative historical events—most notably, that Al Gore won the 2000 election, oversaw the capture of Osama bin Laden shortly after the 9/11 attacks, declined to launch into the...
‘The Soul of Civility’ and Our Only Hope
A new book by Alexandra Hudson offers hope in our contentious times, a better way to confront differences. Now it’s up to us to take the advice seriously. Read More… Our world is suffering a deep unrest. The term “civil war” has been thrown around more than once in reference to the deep divide that seems too broad to risk crossing. And it’s not just the protests that devolve into riots or the January 6storming of the U.S. Capitol—it’s the...
Overlooking Rural America
An attempt to understand “overlooked” Americans reveals more about the observer than the observed. Read More… With magnifying glass in hand, a budding naturalist can learn a great deal about ants scuttling around the driveway. Were the ants to glance upward, however, they might learn even more about the eager eyes—blown up from the ant’s perspective to enormous proportions—looking down at them. In The Overlooked Americans: The Resilience of Our Rural Towns and What It Means for Our Country, social...
Setting the World Ablaze, Thales-Style
Parents are desperate for alternatives to public schools and even conventional college educations. The classical education movement is seeking to meet this need. And Thales Academies are among the best examples of what the movement has to offer. Read More… Business and educational entrepreneur Robert L. Luddy is a conservative Catholic who embraces dynamism and adaptability in bringing visions to life. Thales Academy is one such vision. In his new book, The Thales Way, Luddy provides the blueprint for and...
John Newton: From Slave Trader to Abolitionist Pastor
The story of John Newton’s conversion is legendary. His hymns, like “Amazing Grace,” perennial favorites. His pastor’s heart, exemplary. His fight for an abolition of the slave trade, monumental. But none of this came quickly or easily. Read More… John Newton (1725–1807) is a pivotal figure in the English evangelical revival or awakening. His is an early example of a settled evangelical ministry in the second half of the 18th century, involving pastoral work, hymn-writing, and even mentoring the likes...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved