4 ms·

> So every year, when you wire your tax money to the government, bits of data are simply written to a database, indicating money removed from your account. Ther

> So every year, when you wire your tax money to the government, bits of data are simply written to a database, indicating money removed from your account. There is no physical transfer of assets to the government But there is.The government uses the tax money (plus extra money that they create out of nothing) to buy goods and services. Lots of them. Physical assets such as roads. F-35 fighters. Aircraft carriers. Schools. Services such as file clerks. Accountants. Public health doctors. All of those things represent increased demand, which in turn result in net price increases (i.e., inflation). The money goes right back into circulation, rather than being removed from it, as you claim.

coralreef 5y ago
Yes, the value replacement is there. And yes, tax dollars help "pay" for services. What I mean by "physical transfer" is literally that if you mailed a brick of cash to the federal government, they would just burn it. Taxation = money out of the system Money printing/spending = money into the system The difference causes inflation or deflation.
- Turing_Machine 5y ago
  When, in recent memory, has the amount taken out in taxes exceeded the amount spent? Ever? You are arguing a hypothetical case where the government takes in more in taxes than it spends, thus creating a trend toward deflation. But that never happens. Like, ever.
  - coralreef 5y ago
    The government could spend less and tax more, but this is politically and socially unpopular, so unlikely to happen. But its not like its not possible. Some countries have fiscal surpluses. Canada had a surplus in 2018 [1]. I don't see what I'm arguing, and none of it is hypothetical, this is just basic economic theory. It is possible for government spending to be financed by borrowing rather than money creation, resulting in no change in the monetary base. Those mechanics I'm less educated about. [1] https://www150.statcan.gc.ca/n1/daily-quotidien/201118/dq201118b-eng.htm https://www150.statcan.gc.ca/n1/daily-quotidien/201118/dq201...

coralreef 5y ago

Yes, the value replacement is there. And yes, tax dollars help "pay" for services. What I mean by "physical transfer" is literally that if you mailed a brick of cash to the federal government, they would just burn it. Taxation = money out of the system Money printing/spending = money into the system The difference causes inflation or deflation.

Turing_Machine 5y ago
When, in recent memory, has the amount taken out in taxes exceeded the amount spent? Ever? You are arguing a hypothetical case where the government takes in more in taxes than it spends, thus creating a trend toward deflation. But that never happens. Like, ever.
- coralreef 5y ago
  The government could spend less and tax more, but this is politically and socially unpopular, so unlikely to happen. But its not like its not possible. Some countries have fiscal surpluses. Canada had a surplus in 2018 [1]. I don't see what I'm arguing, and none of it is hypothetical, this is just basic economic theory. It is possible for government spending to be financed by borrowing rather than money creation, resulting in no change in the monetary base. Those mechanics I'm less educated about. [1] https://www150.statcan.gc.ca/n1/daily-quotidien/201118/dq201118b-eng.htm https://www150.statcan.gc.ca/n1/daily-quotidien/201118/dq201...