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> all money it can possibly distribute is taken from taxpayer's pockets. This is the insanely reductive view of government spending that allows the Republican

by ketzo 6y ago

> all money it can possibly distribute is taken from taxpayer's pockets. This is the insanely reductive view of government spending that allows the Republican party to float austerity measures in the worst economic times since the Depression. Taxes are not the only place that government money comes from. How would that even make sense? What do you think the Federal Reserve even does? Why do you think we have a national debt? The government is absolutely able to create money out of essentially thin air when called for -- the question is whether we need to wring our hands about increasing the national debt of the largest economy on earth while people are starving in the streets.

uoaei 6y ago
Taxes are not the place where government money comes from, period. Taxes are charges to pull money out of circulation so inflation doesn't fall into a positive feedback loop. Taxes have nothing to do with the amount of money that the government can spend at one time. The only thing limiting that is the threat of a sharp devaluation of the currency, and even that is not as big an issue as you might think because countries all over the world are still filling their reserves with dollars.
anovikov 6y ago
Well there is a limit on that amount of money. I mean, currently only around 100% of one annual GDP has been printed this way. And this money is still debt - it eats into wealth and incomes of the future retirees i.e. those same people who are now going unemployed - they are borrowing from themselves by getting those benefits - because a larger debt now means higher interest payments later (and these of course go to the rich, included but not limited, rich Chinese, but mainly rich Americans), and limiting what the government can pay to the same people in form of say, social security payments when they get old. This money still doesn't come from nowhere. Or, it increases risk of default when everyone's savings will be wiped out - except most of the money the rich have are again, in stocks so these won't be impacted nearly as much... Whatever way it goes, these are not free money. Call me a conservative but stuff just doesn't come for free. I wonder why is this difficult to grasp - i mean OK, the virtual capital (e.g. startup valuations, or even stock market values) MAY come from nowhere, because they can just equally return to nowhere - these can be pumped to infinity. But we are speaking of consumption money for people living hand to mouth - whatever dollar is given to them, goes to very material consumption. Where this extra stuff will come from, if people don't work more for them to be created? It just doesn't appear out of nowhere if Fed prints some bucks.

by ketzo 6y ago

uoaei 6y ago

Taxes are not the place where government money comes from, period. Taxes are charges to pull money out of circulation so inflation doesn't fall into a positive feedback loop. Taxes have nothing to do with the amount of money that the government can spend at one time. The only thing limiting that is the threat of a sharp devaluation of the currency, and even that is not as big an issue as you might think because countries all over the world are still filling their reserves with dollars.

anovikov 6y ago

Well there is a limit on that amount of money. I mean, currently only around 100% of one annual GDP has been printed this way. And this money is still debt - it eats into wealth and incomes of the future retirees i.e. those same people who are now going unemployed - they are borrowing from themselves by getting those benefits - because a larger debt now means higher interest payments later (and these of course go to the rich, included but not limited, rich Chinese, but mainly rich Americans), and limiting what the government can pay to the same people in form of say, social security payments when they get old. This money still doesn't come from nowhere. Or, it increases risk of default when everyone's savings will be wiped out - except most of the money the rich have are again, in stocks so these won't be impacted nearly as much... Whatever way it goes, these are not free money. Call me a conservative but stuff just doesn't come for free. I wonder why is this difficult to grasp - i mean OK, the virtual capital (e.g. startup valuations, or even stock market values) MAY come from nowhere, because they can just equally return to nowhere - these can be pumped to infinity. But we are speaking of consumption money for people living hand to mouth - whatever dollar is given to them, goes to very material consumption. Where this extra stuff will come from, if people don't work more for them to be created? It just doesn't appear out of nowhere if Fed prints some bucks.