Voucher hysteria

Vouch·er — a small printed piece of paper that may be exchanged for goods or services.

Something about the word “voucher” strikes fear into the hearts of people. The threat of converting some government program (education, health care, retirement) to a voucher system means the sky is falling. Let us look more deeply into this psychosis.

First, you use vouchers every day. Look into your wallet. See that small printed piece of paper with the words “Federal Reserve Note” on the top? Compare it to the definition above and explain the difference to me. For extra credit, put “fiat money” in your Internet search field, then do the same with “specie money.”

Second, you encounter people every day who use different kinds of vouchers. There are nearly 50 million people on food stamps, each of whom patronize the same grocery stores you do. They pay with a different form of money — a voucher called a food stamp.

Ernest Hemingway is reputed to have learned from Mary Colum (often mistakenly attributed to F. Scott Fitzgerald) that the difference between rich people and poor people is that rich people have more money. This is a valuable lesson about vouchers. The best way to make poor people more like rich people is to give them money. So why don’t we do that? The reason is simple: control. Various Robin Hood schemes are only partly about money. Mostly they are about changing behavior. Government wishes to limit your choices to what government wants you to do.

Food stamps are vouchers that limit what one can buy to certain food items. They attempt to force people to eat things the government wants them to eat. The negative value of that restriction is revealed in the discount at which food stamps are sold for cash which can then be used to purchase anything. Because “cash” is a Federal Reserve Note, the sale of food stamps is just an exchange of some vouchers for a smaller number of other vouchers. All similar schemes are the same. Housing programs, welfare, medical care or any other commodity that may be acquired with “special money” all have traps woven into them that attempt, and usually fail, to cause the consumer to act in a certain way.

Starting in 1933 under former President Franklin D. Roosevelt and culminating in 1971 under former President Richard Nixon, the government eliminated gold as the basis for the value of money. The results are telling. We now have trillions of printed dollars backed by nothing. These can be continuously, though not endlessly, replicated with more trillions. The value of the dollar is vanishingly small because few can conceive of how many it takes to make a trillion.

For nearly a century, there has been a gold/suit ratio, which holds that an ounce of gold, whatever its nominal value in paper money at any given time, always buys a custom tailored man’s suit. For 25 years there has been a Big Mac index that placed all currencies on common, if not high cholesterol, ground. There are simple truths in these concepts. It is not so much that an ounce of gold is “worth” a tailored suit but that the resources required to cause the Earth to release its grip on an ounce of gold are equal to those required to turn cotton and wool into fitted and wearable fabric. Distinguish these activities from today’s common pastimes of passing silly laws, selling lottery tickets, printing money and running for office. The difference is for that ounce of gold or that fine suit to be in your hand someone had to actually do something.

Society moves from barter to a common medium of money exchange as an economy modernizes. The open question is: How long can society survive once it discovers the multitude of ways its members may be manipulated by money illusion?

We enjoy freedom of religion, allowing us to believe in any higher order we choose (or none at all). But we are denied economic freedom when we are required to conduct business only through the false promise of government vouchers as the media of exchange and store of value. Some of us still want to exchange value for value. We want to be allowed to trade our services freely and openly for the services of others without interference. The relentless and costly effect of government interposing itself between us distorts every aspect of our lives.

So here is my prescription: Get rid of all the vouchers. Pay people only for what they do and only if what they do is sufficiently valued by another that the counterparty will give up some actual work in return for it. If there are delays, brief or otherwise, between the conclusion of the effort by the separate parties, allow them to contract around a freely chosen and proper medium in which to store their wealth until the bargain is complete. In short, leave alone those of us who want to work, and we will do so. Print up acres of phony money, pass incomprehensible and unenforceable laws, tax us heavily and we will quit.

While we are at is, let’s require campaign donations to be made in Krugerrands.

Brown is an investor and freelance writer residing in Alpine.