unit of exchange. I think you would call it fiat money
Well...its not what it used to be...when the money supply is increased as rapidly as the supply of US dollars is...its causes inflation...which is just another tax...this one on savings...to support out-of-control government spending
That's why the most important argument that the Federalists made in support of the US Constitution (and the argument the Anti-Federalists could not really counter) was that the Constitution would rid the country of the scourge of worthless paper money by giving the feds the power to coin money (precious metal money) and prohibiting the states from "emitting bills of credit" (paper or fiat currency)
Of course...hidden taxes like inflation aren't recognized by most Americans and the Constitution is now ignored as a relic or an inconvenience...even by so-called "conservatives"
I don't think we disagree too much. Inflation is a tax. In fact in a very old post I proposed the abolishment of taxes and suggested that the government be allowed to create money based on GDP growth. It would work if the government was much, much smaller : )
A little inflation is a good thing.