Letter: Public money and social democracy

Many people don’t understand our economic system and the benefits of public money. U.S. money is fiat money; it has value only because federal law requires that it be accepted as payment. Public money is money that is printed by the federal government and spent for public works.

Most Americans rely on public money for all or a part of their subsistence. To demonstrate this, consider an engineer who receives printed money (wages) from the feds by working at Hanford. Where does she spend the money? She spends it at local retail stores (private enterprise), perhaps she buys a Ford (private enterprise), and so on. The money does not disappear. It goes to private enterprise, and part of the salaries of the private enterprise employees is public money, and they in turn spend that public money.

Public money flows into the economy and stimulates commerce. Public money should return to federal coffers through regulation, death and taxes, but much of it doesn’t because of excessive profits and other factors. Public money is a necessary thing, and without it, private enterprise would collapse. Like it or not, this means that we are a social democracy.

This story was originally published October 16, 2016 at 4:26 AM with the headline "Letter: Public money and social democracy."