More on currency, Part I
The economic fact of the matter as I see it is, if nothing is backing the dollar, then that means that everything is backing the dollar.
In other words, all the goods and services that can be bought with dollars are "backing" the dollar. Think about it. When you take a $20 out of the ATM, you do so because you expect that you can buy something with that. And you have a pretty good idea of what that something will cost. That's the only reason why you want that bill.
This adds a little more weight to the metaphor of wage slavery as well. Because our labor is being farmed by the banking system, in an indirect way. We're holding up the dollars that they are printing for themselves with our labor. In a real sense, we're backing up their debt with our labor.
This is why it is important to them to avoid deflation at all costs. The neo-classical economists will often claim that deflation would be a "disaster". Well, it would be a disaster for the ruling class. And in the economists' minds, what's good for GM is good for us, and vice versa. They have compressed that shortcut in their minds such that they don't really question it. Which is why they deserve the ridicule they get from skeptics... this is also why they constantly speak of "growth" without really going any further. Because in their minds, it is obvious that "growth" is a good thing for "the economy" (whatever that is).
But the question of distribution changes things a bit...
Consider this scenario. Imagine if you will (it's not too hard) that 5% of the population owns 90% of the wealth.
Now imagine that there are two policy options.
Option A will increase the amount of wealth by 3% across the board for 10 years.
Option B will decrease the total amount of wealth by 3% for 10 years, but will reduce the share held by the top 5% to 75%.
For 95% of the population, Option B is the better option.
Which option do you think the ruling class prefers? What do you think a mainstream economist would say about Option B? "A disaster!"