Modern Monetary Theory (MMT): How Fiat Money Works

[Centinel]

Seems weird to have a theory of money when one doesn't even know what money is.

What are you rambling about? Money is a way governments can obtain resources to do its duty. A tax obligation gives money value.

So in the constitution, dollars aren't money?

You need to tell me what the constitution is referring to, because it seems to be open to interpretation. You're the expert on the old document after all.

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

 

[Dovahkiin]

What are you rambling about? Money is a way governments can obtain resources to do its duty. A tax obligation gives money value.

So in the constitution, dollars aren't money?

You need to tell me what the constitution is referring to, because it seems to be open to interpretation. You're the expert on the old document after all.

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

 

[Centinel]

So in the constitution, dollars aren't money?

You need to tell me what the constitution is referring to, because it seems to be open to interpretation. You're the expert on the old document after all.

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

Yes, but what IS a fiat dollar and how is a fiat dollar different from a real dollar?

 

[bripat9643]

And what is a dollar? When the constitution uses the word dollar, to what thing was it referring?

The currency of the united states. I'm pretty sure the constitution refers to this.

There was no currency of the united states when the delegates of the several states wrote the constitution. In fact, there was no United States. So what did they mean when they used the word "dollar"?

You tell me.

Seems weird to have a theory of money when one doesn't even know what money is.

What are you rambling about? Money is a way governments can obtain resources to do its duty. A tax obligation gives money value.

Wrong and wrong. Money is a means of exchange. It existed before government took it over. A tax obligation has nothing to do with the value of money, other than the fact that governments want to have the power to debase the currency as a means to pay off their ridiculous spending and borrowing.

 

[bripat9643]

So in the constitution, dollars aren't money?

You need to tell me what the constitution is referring to, because it seems to be open to interpretation. You're the expert on the old document after all.

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

What utter horseshit. What you mean is that when government outlaws real money and forces you to use funny money, that creates a demand for funny money.

 

[bripat9643]

There was no currency of the united states when the delegates of the several states wrote the constitution. In fact, there was no United States. So what did they mean when they used the word "dollar"?

You tell me.

Seems weird to have a theory of money when one doesn't even know what money is.

What are you rambling about? Money is a way governments can obtain resources to do its duty. A tax obligation gives money value.

So in the constitution, dollars aren't money?

You need to tell me what the constitution is referring to, because it seems to be open to interpretation. You're the expert on the old document after all.

Article I Section 8

The Congress shall have Power To . . .

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;​

 

[Dovahkiin]

You need to tell me what the constitution is referring to, because it seems to be open to interpretation. You're the expert on the old document after all.

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

Yes, but what IS a fiat dollar and how is a fiat dollar different from a real dollar?

Fiat money has nothing physical to back it up. We're not on the gold standard.

 

[Slade3200]

Interesting read... I am curious though, I hear plenty fear mongering by the conservatives about the debt cliff and other arguments that are so lopsided that it is hard to take seriously. I'd like to hear from somebody from the other side who see's the benefits of economic stimulus and deficit spending... What are the cautions and possible negative effects that can happen from having an extremely large debt? Is there a breaking point and how is it measured? and what is a healthy goal for spending and debt levels to have a sustainable and flourishing economy?

 

[Dovahkiin]

The currency of the united states. I'm pretty sure the constitution refers to this.

There was no currency of the united states when the delegates of the several states wrote the constitution. In fact, there was no United States. So what did they mean when they used the word "dollar"?

You tell me.

Seems weird to have a theory of money when one doesn't even know what money is.

What are you rambling about? Money is a way governments can obtain resources to do its duty. A tax obligation gives money value.

Wrong and wrong. Money is a means of exchange. It existed before government took it over. A tax obligation has nothing to do with the value of money, other than the fact that governments want to have the power to debase the currency as a means to pay off their ridiculous spending and borrowing.

You are indeed correct money is a means of exchange. You are indeed correct that money existed before the government monopolized issuing the currency known as the USD. You know why people want the worthless USD, just like the worthless euro? Taxation. After all, a government has to spend before it can tax its own currency. ...Huh? Ridiculous spending? Elaborate on that.

 

[Dovahkiin]

You need to tell me what the constitution is referring to, because it seems to be open to interpretation. You're the expert on the old document after all.

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

What utter horseshit. What you mean is that when government outlaws real money and forces you to use funny money, that creates a demand for funny money.

Define "real money." So you're agreeing that the government, which enforces a taxation its its own currency, creates a demand for the "funny money?"

 

[Dovahkiin]

Interesting read... I am curious though, I hear plenty fear mongering by the conservatives about the debt cliff and other arguments that are so lopsided that it is hard to take seriously. I'd like to hear from somebody from the other side who see's the benefits of economic stimulus and deficit spending... What are the cautions and possible negative effects that can happen from having an extremely large debt? Is there a breaking point and how is it measured? and what is a healthy goal for spending and debt levels to have a sustainable and flourishing economy?

The debt cliff fear mongering is done by both sides. It's absolute nonsense and a political game. People have claimed that treasury securities are going to collapse the nation for decades and that we'll have to "pay for it" and all of this other nonsense. It's all politics. The "national debt" simply accounts for treasury securities, but in reality, all forms of government issued currency are liabilities of the government, reserves/notes/coins.. Those aren't included in the national debt fear mongering though. Bonds are, quite literally, an interest earning term savings account. Economic stimulus is a wonderful thing, fiscal policy works much better then monetary policy. The new deal, reagan's deficit spending, the recent stimulus.. Deficit spending is a necessity, there's a reason we run a net deficit.
Read this:

Deficits are considered to represent sinful profligate spending at the expense of future generations who will be left with a smaller endowment of invested capital.


This fallacy seems to stem from a false analogy to borrowing by individuals. Current reality is almost the exact opposite. Deficits add to the net disposable income of individuals, to the extent that government disbursements that constitute income to recipients exceed that abstracted from disposable income in taxes, fees, and other charges. This added purchasing power, when spent, provides markets for private production, inducing producers to invest in additional plant capacity, which will form part of the real heritage left to the future. This is in addition to whatever public investment takes place in infrastructure, education, research, and the like. Larger deficits, sufficient to recycle savings out of a growing gross domestic product (GDP) in excess of what can be recycled by profit-seeking private investment, are not an economic sin but an economic necessity. Deficits in excess of a gap growing as a result of the maximum feasible growth in real output might indeed cause problems, but we are nowhere near that level.

Even the analogy itself is faulty. If General Motors, AT&T, and individual households had been required to balance their budgets in the manner being applied to the Federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones, and houses.

I tend to laugh out loud at the ignorant fools who want to balance the budget for eternity. These people are truly idiots.
I also laugh at people who believe countercylical fiscal policy is a failure. You can't ignore hard data. It's common for people to do this though.
Well, now that we've acknowledged the "national debt" simply represents bonds that are used as a place to save government issued dollars, and if you want to get wonky, bonds are also used to help the central bank manage interest rates. Anyways, nothing can stop us from crediting accounts of the entities that hold bonds when the time comes to "pay the interest." The only reason we're in a situation where people believe that taxes are needed to fund anything is ignorance. Greenspan, Bernanke, others know what is really going on. The average american doesn't care, or believes the government is a household, which is absolute nonsense. Now, "debt" is a problem for governments that do one of these things:
1.) Use a foreign currency, without the ability to create it when needed, having to rely on a foreign entity. (Greece)
2.) A country that pegs their currency.
Now, Japan's debt to GDP is simply massive, and are they collapsing? Absolutely not, because they don't fit any of the above conditions. Now, should we let debt to gdp get as high as Japan? That's up to the reader to decide, but right now, debt to GDP is absolutely fine.
A healthy goal for spending is to get to full employment, which I and others define as:
"Less then 2 percent unemployment, close to zero underemployment, and close to zero hidden unemployment."
Now, that seems like a pipedream, but the best way to aim spending towards full employment is to aim towards a pipe dream. Unfortunately, we have people who believe getting UE below 4.5% (Number is around there) will cause crippling inflation. That number used to be higher, until the 90's where they kept lowering it..
I'd like to borrow this quote, and it really demonstrates the importance of the government running a net deficit:

The private sector cannot survive in negative territory. It cannot go on, year after year, spending more than its income. It is not like the US government. It cannot support rising indebtedness in perpetuity. It is not a currency issuer. Eventually, something will give. And when it does, the private sector will retrench, the economy will contract, and the government's budget will move back into deficit."

Unfortunately, no one cares about private sector debt. It's what we need to be worrying about, not the treasury securities of a currency issuer that doesn't peg, have any foreign debt, and doesn't use a foreign currency. The national debt is absolutely necessary, it simply represents money the government has given the domestic private sector/foreign sector. It's earned money saved in the safest vehicle there is, bonds. Nothing to worry about. And I suppose I should ask, are we paying for the world war 2 "debt?" Are we throwing real resources into a time portal? We're idiots! We're worrying about something that benefits the private sector and the world, while we have real issues. Unemployment, education, the military..

 

[bripat9643]

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

What utter horseshit. What you mean is that when government outlaws real money and forces you to use funny money, that creates a demand for funny money.

Define "real money." So you're agreeing that the government, which enforces a taxation its its own currency, creates a demand for the "funny money?"

I'm not sure what that is supposed to mean. If government points a gun at you and tells you to buy insurance, then it creates a demand for insurance. That's how the "demand" for funny money is created. If government didn't point guns at us for not using it, then we wouldn't use it. It's as simple as that.

 

[bripat9643]

Interesting read... I am curious though, I hear plenty fear mongering by the conservatives about the debt cliff and other arguments that are so lopsided that it is hard to take seriously. I'd like to hear from somebody from the other side who see's the benefits of economic stimulus and deficit spending... What are the cautions and possible negative effects that can happen from having an extremely large debt? Is there a breaking point and how is it measured? and what is a healthy goal for spending and debt levels to have a sustainable and flourishing economy?

The debt cliff fear mongering is done by both sides. It's absolute nonsense and a political game. People have claimed that treasury securities are going to collapse the nation for decades and that we'll have to "pay for it" and all of this other nonsense. It's all politics. The "national debt" simply accounts for treasury securities, but in reality, all forms of government issued currency are liabilities of the government, reserves/notes/coins.. Those aren't included in the national debt fear mongering though. Bonds are, quite literally, an interest earning term savings account. Economic stimulus is a wonderful thing, fiscal policy works much better then monetary policy. The new deal, reagan's deficit spending, the recent stimulus.. Deficit spending is a necessity, there's a reason we run a net deficit.
Read this:

Deficits are considered to represent sinful profligate spending at the expense of future generations who will be left with a smaller endowment of invested capital.


This fallacy seems to stem from a false analogy to borrowing by individuals. Current reality is almost the exact opposite. Deficits add to the net disposable income of individuals, to the extent that government disbursements that constitute income to recipients exceed that abstracted from disposable income in taxes, fees, and other charges. This added purchasing power, when spent, provides markets for private production, inducing producers to invest in additional plant capacity, which will form part of the real heritage left to the future. This is in addition to whatever public investment takes place in infrastructure, education, research, and the like. Larger deficits, sufficient to recycle savings out of a growing gross domestic product (GDP) in excess of what can be recycled by profit-seeking private investment, are not an economic sin but an economic necessity. Deficits in excess of a gap growing as a result of the maximum feasible growth in real output might indeed cause problems, but we are nowhere near that level.

Even the analogy itself is faulty. If General Motors, AT&T, and individual households had been required to balance their budgets in the manner being applied to the Federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones, and houses.

I tend to laugh out loud at the ignorant fools who want to balance the budget for eternity. These people are truly idiots.
I also laugh at people who believe countercylical fiscal policy is a failure. You can't ignore hard data. It's common for people to do this though.
Well, now that we've acknowledged the "national debt" simply represents bonds that are used as a place to save government issued dollars, and if you want to get wonky, bonds are also used to help the central bank manage interest rates. Anyways, nothing can stop us from crediting accounts of the entities that hold bonds when the time comes to "pay the interest." The only reason we're in a situation where people believe that taxes are needed to fund anything is ignorance. Greenspan, Bernanke, others know what is really going on. The average american doesn't care, or believes the government is a household, which is absolute nonsense. Now, "debt" is a problem for governments that do one of these things:
1.) Use a foreign currency, without the ability to create it when needed, having to rely on a foreign entity. (Greece)
2.) A country that pegs their currency.
Now, Japan's debt to GDP is simply massive, and are they collapsing? Absolutely not, because they don't fit any of the above conditions. Now, should we let debt to gdp get as high as Japan? That's up to the reader to decide, but right now, debt to GDP is absolutely fine.
A healthy goal for spending is to get to full employment, which I and others define as:
"Less then 2 percent unemployment, close to zero underemployment, and close to zero hidden unemployment."
Now, that seems like a pipedream, but the best way to aim spending towards full employment is to aim towards a pipe dream. Unfortunately, we have people who believe getting UE below 4.5% (Number is around there) will cause crippling inflation. That number used to be higher, until the 90's where they kept lowering it..
I'd like to borrow this quote, and it really demonstrates the importance of the government running a net deficit:

The private sector cannot survive in negative territory. It cannot go on, year after year, spending more than its income. It is not like the US government. It cannot support rising indebtedness in perpetuity. It is not a currency issuer. Eventually, something will give. And when it does, the private sector will retrench, the economy will contract, and the government's budget will move back into deficit."

Unfortunately, no one cares about private sector debt. It's what we need to be worrying about, not the treasury securities of a currency issuer that doesn't peg, have any foreign debt, and doesn't use a foreign currency. The national debt is absolutely necessary, it simply represents money the government has given the domestic private sector/foreign sector. It's earned money saved in the safest vehicle there is, bonds. Nothing to worry about. And I suppose I should ask, are we paying for the world war 2 "debt?" Are we throwing real resources into a time portal? We're idiots! We're worrying about something that benefits the private sector and the world, while we have real issues. Unemployment, education, the military..

So what does the government owe when it issues dollars? If you take a dollar to the Federal Reserve and demand to be paid, they will exchange it for another dollar. Federal Reserve notes are not obligations of any kind. That's the first place you go wrong.

 

[Dovahkiin]

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

What utter horseshit. What you mean is that when government outlaws real money and forces you to use funny money, that creates a demand for funny money.

Define "real money." So you're agreeing that the government, which enforces a taxation its its own currency, creates a demand for the "funny money?"

I'm not sure what that is supposed to mean. If government points a gun at you and tells you to buy insurance, then it creates a demand for insurance. That's how the "demand" for funny money is created. If government didn't point guns at us for not using it, then we wouldn't use it. It's as simple as that.

Then you agree with the OP. Thanks for admitting that! You are indeed correct that the government creates a demand for the currency which is backed by nothing physical by enforcing a tax only payable in that currency. You can disagree with it, but it's how it's worked for countless nations through history.

 

[bripat9643]

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

What utter horseshit. What you mean is that when government outlaws real money and forces you to use funny money, that creates a demand for funny money.

Define "real money." So you're agreeing that the government, which enforces a taxation its its own currency, creates a demand for the "funny money?"

Gold is real money, and notes that can be exchanged for gold are real money. Everything else is worthless trash.

 

[Centinel]

I'm no expert, any more than any of the members of the ratification conventions were experts. I simply have the ability to read.

I am not the one who started a thread about dollars. I would have expected that you knew what you were talking about.

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

Yes, but what IS a fiat dollar and how is a fiat dollar different from a real dollar?

Fiat money has nothing physical to back it up. We're not on the gold standard.

So a fiat dollar isn't a real dollar?

So in the constitution, it says the following:

Amendment 7
In Suits at common law, where the value in controversy shall exceed twenty
dollars, the right of trial by jury shall be preserved, and no fact tried by a
jury, shall be otherwise re-examined in any Court of the United States, than
according to the rules of the common law.

What did they mean when they used the word "dollar"?

 

[Dovahkiin]

Interesting read... I am curious though, I hear plenty fear mongering by the conservatives about the debt cliff and other arguments that are so lopsided that it is hard to take seriously. I'd like to hear from somebody from the other side who see's the benefits of economic stimulus and deficit spending... What are the cautions and possible negative effects that can happen from having an extremely large debt? Is there a breaking point and how is it measured? and what is a healthy goal for spending and debt levels to have a sustainable and flourishing economy?

The debt cliff fear mongering is done by both sides. It's absolute nonsense and a political game. People have claimed that treasury securities are going to collapse the nation for decades and that we'll have to "pay for it" and all of this other nonsense. It's all politics. The "national debt" simply accounts for treasury securities, but in reality, all forms of government issued currency are liabilities of the government, reserves/notes/coins.. Those aren't included in the national debt fear mongering though. Bonds are, quite literally, an interest earning term savings account. Economic stimulus is a wonderful thing, fiscal policy works much better then monetary policy. The new deal, reagan's deficit spending, the recent stimulus.. Deficit spending is a necessity, there's a reason we run a net deficit.
Read this:

Deficits are considered to represent sinful profligate spending at the expense of future generations who will be left with a smaller endowment of invested capital.


This fallacy seems to stem from a false analogy to borrowing by individuals. Current reality is almost the exact opposite. Deficits add to the net disposable income of individuals, to the extent that government disbursements that constitute income to recipients exceed that abstracted from disposable income in taxes, fees, and other charges. This added purchasing power, when spent, provides markets for private production, inducing producers to invest in additional plant capacity, which will form part of the real heritage left to the future. This is in addition to whatever public investment takes place in infrastructure, education, research, and the like. Larger deficits, sufficient to recycle savings out of a growing gross domestic product (GDP) in excess of what can be recycled by profit-seeking private investment, are not an economic sin but an economic necessity. Deficits in excess of a gap growing as a result of the maximum feasible growth in real output might indeed cause problems, but we are nowhere near that level.

Even the analogy itself is faulty. If General Motors, AT&T, and individual households had been required to balance their budgets in the manner being applied to the Federal government, there would be no corporate bonds, no mortgages, no bank loans, and many fewer automobiles, telephones, and houses.

I tend to laugh out loud at the ignorant fools who want to balance the budget for eternity. These people are truly idiots.
I also laugh at people who believe countercylical fiscal policy is a failure. You can't ignore hard data. It's common for people to do this though.
Well, now that we've acknowledged the "national debt" simply represents bonds that are used as a place to save government issued dollars, and if you want to get wonky, bonds are also used to help the central bank manage interest rates. Anyways, nothing can stop us from crediting accounts of the entities that hold bonds when the time comes to "pay the interest." The only reason we're in a situation where people believe that taxes are needed to fund anything is ignorance. Greenspan, Bernanke, others know what is really going on. The average american doesn't care, or believes the government is a household, which is absolute nonsense. Now, "debt" is a problem for governments that do one of these things:
1.) Use a foreign currency, without the ability to create it when needed, having to rely on a foreign entity. (Greece)
2.) A country that pegs their currency.
Now, Japan's debt to GDP is simply massive, and are they collapsing? Absolutely not, because they don't fit any of the above conditions. Now, should we let debt to gdp get as high as Japan? That's up to the reader to decide, but right now, debt to GDP is absolutely fine.
A healthy goal for spending is to get to full employment, which I and others define as:
"Less then 2 percent unemployment, close to zero underemployment, and close to zero hidden unemployment."
Now, that seems like a pipedream, but the best way to aim spending towards full employment is to aim towards a pipe dream. Unfortunately, we have people who believe getting UE below 4.5% (Number is around there) will cause crippling inflation. That number used to be higher, until the 90's where they kept lowering it..
I'd like to borrow this quote, and it really demonstrates the importance of the government running a net deficit:

The private sector cannot survive in negative territory. It cannot go on, year after year, spending more than its income. It is not like the US government. It cannot support rising indebtedness in perpetuity. It is not a currency issuer. Eventually, something will give. And when it does, the private sector will retrench, the economy will contract, and the government's budget will move back into deficit."

Unfortunately, no one cares about private sector debt. It's what we need to be worrying about, not the treasury securities of a currency issuer that doesn't peg, have any foreign debt, and doesn't use a foreign currency. The national debt is absolutely necessary, it simply represents money the government has given the domestic private sector/foreign sector. It's earned money saved in the safest vehicle there is, bonds. Nothing to worry about. And I suppose I should ask, are we paying for the world war 2 "debt?" Are we throwing real resources into a time portal? We're idiots! We're worrying about something that benefits the private sector and the world, while we have real issues. Unemployment, education, the military..

So what does the government owe when it issues dollars? If you take a dollar to the Federal Reserve and demand to be paid, they will exchange it for another dollar. Federal Reserve notes are not obligations of any kind. That's the first place you go wrong.

FRB: Federal Reserve liabilities - Credit and Liquidity Programs and the Balance Sheet
The government will accept it's own currency in relation to taxation.

 

[bripat9643]

There was no currency of the united states when the delegates of the several states wrote the constitution. In fact, there was no United States. So what did they mean when they used the word "dollar"?

You tell me.

Seems weird to have a theory of money when one doesn't even know what money is.

What are you rambling about? Money is a way governments can obtain resources to do its duty. A tax obligation gives money value.

Wrong and wrong. Money is a means of exchange. It existed before government took it over. A tax obligation has nothing to do with the value of money, other than the fact that governments want to have the power to debase the currency as a means to pay off their ridiculous spending and borrowing.

You are indeed correct money is a means of exchange. You are indeed correct that money existed before the government monopolized issuing the currency known as the USD. You know why people want the worthless USD, just like the worthless euro? Taxation. After all, a government has to spend before it can tax its own currency. ...Huh? Ridiculous spending? Elaborate on that.

No, the only reason people want is the fact that they need a medium of exchange and government has outlawed any other mediums of exchange aside from the one it issues. Government has enforced a monopoly on currency so it can loot all of us whenever it wants.

 

[bripat9643]

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

Yes, but what IS a fiat dollar and how is a fiat dollar different from a real dollar?

Fiat money has nothing physical to back it up. We're not on the gold standard.

So a fiat dollar isn't a real dollar.

So in the constitution, it says the following:

Amendment 7
In Suits at common law, where the value in controversy shall exceed twenty
dollars, the right of trial by jury shall be preserved, and no fact tried by a
jury, shall be otherwise re-examined in any Court of the United States, than
according to the rules of the common law.

What did they mean when they used the word "dollar"?

Then it meant 1/28th oz of gold.

 

[Dovahkiin]

I started a thread about fiat money in general.

What is a fiat dollar and how does that differ from an actual dollar?

Fiat money has nothing physical to back it up. Taxation creates a demand for fiat money.

What utter horseshit. What you mean is that when government outlaws real money and forces you to use funny money, that creates a demand for funny money.

Define "real money." So you're agreeing that the government, which enforces a taxation its its own currency, creates a demand for the "funny money?"

Gold is real money, and notes that can be exchanged for gold are real money. Everything else is worthless trash.

Gold is real money? I don't see people using gold to pay their mortgages or buy cars.
You can't exchange dollars for gold, not anymore, and the gold standard was a disaster.