Sweden is a sovereign nation with its own currency and a free floating exchange rate. Therefore when the Swedish state spends money, people earn more from the

Sweden is a sovereign nation with its own currency and a free floating exchange rate. Therefore when the Swedish state spends money, people earn more from the production that induces. The machines are run for longer and more is made. Taxes then automatically recover that. Extra Spending causes extra taxation. The analogy is straightforward. If you have an advanced electrical economy you have to supply more power into the grid than is consumed to handle the phase shift of advanced inductive power plant. That extra power is then taxed back by the electrical grid 50 times a second. You have to generate that extra power, and have wires big enough to take it, even though it is never actually used. If you don't supply it, then the motors just don't create as much real power. To get the correct amount of real power out of a modern mechanised economy, the currency issuer has to spend more into that economy as reactive power and that then returns to the source as taxes and additional savings in the currency every cycle. Mechanisation reduces the power factor of an advanced economy - requiring more reactive power, government spending, to be supplied to maintain the optimum level of real output.