Even governments cannot rely on taxation to fund armies or anything else they do. For centuries, they have relied instead on seizing monopoly control of money and then debasing it. This has the effect of stealing people's savings and the benefits they would otherwise obtain by increased productivity, and it is much harder to detect than blatant taxation.
(By all means read "Creature from Jekyll Island" to learn the details of that deliciously evil story. :)
Yes, that's very true, although I still think that a large part of the reason the USD is still trusted internationally is that a large group of wealthy people (Americans) have to pay their taxes in the USD. Another large part is the US military, of course.
"Although" is not the right word here -- you're supporting my point. :)
The requirement to pay taxes in USD is the primary "inherent value" which makes that particular commodity circulate as money. The "inherent value" is to increase the odds that one may continue living outside of a cage.
When I call that value "inherent", I am obviously speaking very loosely and tongue-in-cheek. Remove the threat of force, and USD paper cash has no significant value -- it's too rough to use as toilet paper and doesn't even burn particularly well in the winter. It is durable enough to function as wallpaper, though with a rather busy and avant garde retro design.
Combine that dynamic with the Mandrake Mechanism described in "Creature", and you have a very powerful monopoly fiat money, consisting of cash and bank "deposits", useful for financing horrors like World War I, the Marxist overthrow of the Kerensky government, endless bailouts of banks and corporations throughout the '70s, '80s, '90s, and '00s, and a litany of other ridiculous, juvenile schemes.
It is the monetary inflation, produced by the central bank buying government debt (i.e. a promise to tax), which gives governments most of their "spending money". Taxation itself merely gives people a reason to accept the USD in the first place, and also serves as the principal means of social engineering.
When you look at it that way, taxation and inflation are seen as two mutually recursive functions, whose fixed point is the gun.
That's a tautology, since a tax is by definition imposed by a government. Bullets bought with private money kill just as well, though, and can and have been used to create new governments.
