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Paper currency is backed by the presumed continued existence and effective taxing and police power of the issuing state. It might seem theoretical, but if you b
by krrrh 9y ago
Paper currency is backed by the presumed continued existence and effective taxing and police power of the issuing state. It might seem theoretical, but if you benefit from the existence of the state, generate value, and don't pay your share to the state in the currency that they demand it in, then your punishment is anything but.
- icebraining 9y agoRight, but the total USD value is much greater than the tax obligations of its citizens.
- tome 9y agoAre you sure? The quickest sources I could find claim it's the other way by a significant margin. > There was approximately $1.56 trillion in circulation as of July 12, 2017, of which $1.52 trillion was in Federal Reserve notes. https://www.federalreserve.gov/faqs/currency_12773.htm https://www.federalreserve.gov/faqs/currency_12773.htm > In FY 2017, total US government revenue, federal, state, and local, is “guesstimated” to be $6.56 trillion http://www.usgovernmentrevenue.com/total http://www.usgovernmentrevenue.com/total
- icebraining 9y agoThe total USD value is much larger than bank notes. Money in bank accounts and equivalent services is in this context indistinguishable from notes.
- tome 9y agoThe reserve requirements on balances on more than $115.1 million are 10%. That means with $1.56 trillion outstanding you're looking at a ballpark amount outstanding of $15 trillion in bank deposits. That's still not "much greater" than the $6 trillion annual tax revenue. https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm
- deleted 9y ago[deleted]
- icebraining 9y agoFrom your link: "Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks." Current balance of federal bank deposits is ~$2.3T: https://www.federalreserve.gov/releases/h41/current/ https://www.federalreserve.gov/releases/h41/current/
- tome 9y agoInteresting. I'm not sure how to read that balance sheet. For the sake of argument let's say that there's $2.3T is federal bank deposits and $1.5T cash in circulation. If it's all used as reserve balances then that's a total of $38T in bank deposits outstanding. $6T taxing power a year is still not small compared to this!