@CWOTUS
Re: “That’s an interesting turnaround, @laureth, and I congratulate you for the thought.”
Not too many people congratulate me for thinking. Not sure what to think about that. ;)
Re: ” farmers and other commodity producers have to deal with supply gluts all the time. It’s one reason that grain elevators are found throughout the Midwest, for example, so that not all the grain harvested in the Fall hits the market at the same time, wrecking farmers’ economies.”
That’s one way of manipulating the supply, you realize, even if it’s not the government doing so. Why is it OK for farmers to manipulate the market and not a government? Or, in other words, why do farmers manipulate to even out a market, but a government’s manipulation does nothing but cause volatility (in your opinion, it seems)?
Re: “Dollars, though, only have a value based on their supposed scarcity and tight control.”
I disagree. They are intrinsically worthless (or worth what their paper or pixels are worth), but that is not what matters about a dollar. A dollar is valuable because it is useful, not useful because it is valuable. A dollar is backed not by the paper that comprises it, but by what you believe you can get for it. For example, I have a $10 bill backed by tomorrow’s sushi lunch, in my pocket right now.
Re: “If we start producing dollars as if that manufactures wealth”
We don’t, though. Dollars are not wealth, they are just a symbol that people can trade to obtain wealth in the form that they prefer.
Re: “If “making dollars” could make us rich, then we should make 300 million trillion-dollar coins and give one to every American. Poverty resolved.”
I know you mean to be sarcastic, but that’s not what dollars are about and we both know that. Dollars are merely a mechanism to lubricate trade between people who have something, and people who want something. If your poverty is caused by the cash supply being too small to efficiently trade your labor or apples to people who would be willing to buy what you’ve got, increasing the cash supply can make that transaction possible, reducing poverty. That’s why, as the economy grows, with more people wanting to trade goods and services than they are able to because the money supply is constrained (say, because it’s set at some arbitrary amount of gold that has to increase in velocity to lubricate all those trades, but can’t), we go into a downturn. The size of the economy is restricted by the size of the money supply, assuming you have the resources around (the real wealth), but no way to trade it.