[OPE-L:1995] Re: [MIKE WILLIAMS] electronic money

Allin Cottrell (cottrell@wfu.edu)
Sat, 27 Apr 1996 08:11:19 -0700

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On Fri, 26 Apr 1996, Duncan K Foley wrote:

> > What I mean is that the state has, in the absence of a gold
> > standard, no obligation to redeem its money. In what sense
> > then is the money state debt?
> First of all, in an accounting sense. But the state also has to redeem
> the money when it is offered in payment of someone's tax liability.

Is the second point not also "in an accounting sense"? My tax liability
represents a debt owed to the state; it is extinguished by my handing
over money, i.e. by the cancellation of a debt owed me by the state --
from an accounting point of view. But this doesn't represent a true
constraint on the issue of state money, since if the state issues more
money, and if this ends up reducing the exchange-value of money, my tax
liability is simply adjusted upward accordingly.

Allin Cottrell