4 ms·
Taxes do not finance the US government. The US government creates money to finance itself. Taxes destroy money (and create demand for dollars, which is importa
by comice 10y ago
Taxes do not finance the US government. The US government creates money to finance itself.
Taxes destroy money (and create demand for dollars, which is important :)
Hyperinflation doesn't happen when there is too much money, it happens when there isn't enough stuff to buy with it.
Lots of ignorance of monetary theory on HN!
- tyleraldrich 10y ago> Taxes do not finance the US government. The US government creates money to finance itself. Source for this claim? I've never heard this before and it sounds quite absurd.
- comice 10y agoWell in a nutshell, the US government makes the money. It can never run out. So it isn't dependent on tax revenue to spend. So the limitations on spending are elsewhere. This is a good intro: http://elliswinningham.net/index.php/the-basics/us-currency-part-1/ http://elliswinningham.net/index.php/the-basics/us-currency-... http://elliswinningham.net/index.php/the-basics/us-currency-part-2/ http://elliswinningham.net/index.php/the-basics/us-currency-... http://elliswinningham.net/index.php/the-basics/us-currency-part-3/ http://elliswinningham.net/index.php/the-basics/us-currency-... Also maybe: http://bilbo.economicoutlook.net/blog/?p=9281 http://bilbo.economicoutlook.net/blog/?p=9281 A rant on deficits: http://elliswinningham.net/index.php/2017/01/10/deficits-matter-paul-krugman-doesnt/ http://elliswinningham.net/index.php/2017/01/10/deficits-mat... For more, just look up modern monetary theory.