Uncle Sam

Who Is Uncle Sam?

"Uncle Sam" is a personified representation of either the United States federal government or the United States of America in general. In finances, Uncle Sam can refer to a specific tax or regulatory authority (e.g., the Internal Revenue Service, or IRS). One might say, for instance: "I have to pay Uncle Sam a portion of my income to pay for roads and hospitals."

Understanding Uncle Sam

A popular etymology first traces the origins of the usage of "Uncle Sam" to early American military history, when it referred to the meat packer Samuel Wilson. Wilson served as an officer during the American Revolutionary War, procuring meat supplies for the Continental Army. After the leaving army, he and his brother went on to establish a meat packing house in Troy, New York, which supplied U.S. troops in New York and New Jersey who were fighting against British invaders during the War of 1812. Barrels of Wilson's meat stamped "U.S." were associated with his nickname, Uncle Sam, which in turn became a personification of the national government, as the initials for the United States are also U.S.

Prior to the 19th century, the U.S. had been personified by the figure "Brother Jonathan," originally a derogatory term for Puritans during the English Civil War. Female representations of the U.S. are also common: Columbia and, since the 20th century, Lady Liberty. 

Uncle Sam is sometimes used in the financial media to refer to the federal government, particularly in the context of income taxes or financial regulation. Some tax-sheltered products, such as municipal bonds or qualified retirement accounts, are sometimes referred to as "off-limits to Uncle Sam," denoting that they are not subject to taxation by the federal government. By regulating various financial activities and transactions, such as the Federal Trade Commission's (FTC) oversight of mergers and acquisitions (M&A), Uncle Sam is said to have "had his say" or "given his stamp of approval."

Source: Wikimedia.

The character of Uncle Sam has been widely used in U.S. government propaganda to encourage support for various policies and military efforts over the years, including the financing of these activities, with varying economic impacts. Uncle Sam was used, for example, to promote the U.S. Treasury's liberty bond program to finance World War I military spending, which one study showed help drive the financialization of the U.S. economy during the early 20th century.

The most popular image of Uncle Sam is based on a World War I military recruiting poster drawn by James Montgomery Flagg, which features a stern Uncle Sam pointing an index finger outward and the words, "I want YOU for U.S. Army." This depiction features an older White man with a white goatee beard wearing an American flag–inspired top hat and red bow tie. His likeness has appeared numerous times since the 1910s.