Daddy, Where Does Money Come From?
Just ask me about babies, kid. That one’s easier.
Twenty-five years ago, I had one of those circular arguments with my father that never quite resolved. The kind where you’re both talking past each other because you’re starting from different premises.
“Where do you think money actually comes from?” I asked him.
He gave me the look. The one that said I was being difficult on purpose.
But I wasn’t. I genuinely wanted to know how he thought it worked. Because it seemed obvious to me, even then, long before I’d ever heard terms like “fiat currency” or “Modern Monetary Theory,” that the government... makes the stuff. Creates it. Types numbers into existence. There’s no vault somewhere with a finite pile that we’re divvying up. There’s no shortage unless someone wants there to be a shortage.
He didn’t buy it. Couldn’t buy it. The idea violated something deep in his understanding of how the world worked. Money was real in a way that meant it had to be scarce. Anything else was fairy tales, or worse, the road to Zimbabwe.
I didn’t have the vocabulary then to explain why he was wrong. I just had the observation.
Here’s what’s funny: if one of my kids had asked me where babies come from, I could have given a clear, accurate, age-appropriate answer. Biology is complicated, but it’s not hidden. We teach it in schools. There are diagrams.
But money? The actual mechanics of where dollars come from?
Try explaining that at a dinner party and watch people’s eyes glaze over, or narrow with suspicion. You might as well be explaining that birds aren’t real. The mystification is so complete that describing how the system actually operates sounds like a conspiracy theory.
The Federal Reserve creates money through keystrokes. The government spends money into existence and taxes some of it back out. This isn’t radical theory—it’s operational description. You can watch it happen. During the pandemic, the government created roughly four trillion dollars in weeks. Did your existing dollars become worthless? Did we descend into hyperinflation?
No. We bought vaccines and kept businesses afloat and sent people checks. And then life went on.
So what was all that “we can’t afford it” talk actually about?
I grew up Mormon. I’m not anymore, but I kept the food storage, because good ideas are good ideas regardless of their source. And one thing the LDS welfare system understood, whatever its other baggage, was this: you don’t just hand people money and walk away. You give them something to do. You let them contribute. Dignity comes from participation, not just consumption.
There’s a reason that framing works across ideological lines. It’s not “paying people to be useless” (the conservative nightmare) and it’s not means-tested humiliation theater (the liberal failure mode). It’s just... a job. Show up, do something useful, get paid.
Austin, Texas ran a program like this. Ten dollars an hour to pick up litter. Simple, right? Almost stupidly simple. But think through the objections:
“It costs money!” — Money the government creates, which flows right back into the economy through spending.
“It’s make-work!” — Have you seen the litter? The work is real.
“Private employers can’t compete!” — Then private employers should probably pay more than ten bucks an hour to pick up trash.
The Job Guarantee, as economists call it, isn’t a radical invention. It’s the obvious thing you’d do if you actually wanted full employment instead of just talking about it. It sets a floor, not a ceiling. Nobody’s prevented from doing better—there’s just an alternative to destitution.
The reason we don’t do the obvious thing is that the obvious thing would shift power.
Right now, the economy runs on what economists politely call an “employment buffer stock.” What that means in English: we keep a pool of unemployed people around to discipline wages. If workers know they can be easily replaced, they accept worse conditions, lower pay, longer hours. They don’t organize. They don’t demand.
This is a policy choice dressed up as natural law.
The people who benefit from that choice have spent decades embedding it in our understanding of how money works. “We can’t afford it” isn’t economics—it’s politics. It’s a story told to keep you from asking obvious questions like “wait, if they can make four trillion dollars during a crisis, why are we arguing about whether we can fund school lunches?”
I’m no economist. I monitor building control systems for a living. But I’ve spent decades watching how things actually work versus how people say they work, and the gap is always interesting.
Chevan Nanayakkara recently published a piece called “Opportunity Economics” that tries to do something valuable: take these observations about how money actually functions and frame them in terms regular people can engage with. Not left versus right. Not academic jargon. Just: here’s how the system works, here’s who it’s working for, here’s what we could do differently.
He’s proposing pilots. Experiments. Try a community development bank and see what happens. Try a Job Guarantee program in one city and measure the results. This is the approach that appeals to me—not because I’m certain it’ll work, but because certainty isn’t the point. You try things. You observe. You adjust.
We don’t need to win a national argument about monetary theory. We need to run some tests and let the data do the persuading. That’s harder to argue with than ideology.
Fifty states. Fifty laboratories. Fifty chances to try something and find out.
My dad and I never did resolve that argument about money. I suspect if he’d seen and understood the pandemic response—trillions conjured out of nothing, the economy shaky but not collapsed, his dollars still buying groceries—he might have looked at it differently.
Or maybe not. These beliefs run deep. They feel like physics when they’re really just policy.
But for anyone else who’s ever looked at the official story and thought “wait, that doesn’t make sense”—trust your instincts. Ask the obvious questions. The answers aren’t hidden, exactly. They’re just not advertised.
Daddy, where does money come from?
The government makes it. It always has. The question is who it’s made for.
The Mongoose watches. The Mongoose waits. The Mongoose asks inconvenient questions at dinner parties.
Give people a job. I like it