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Ever dollar in existence represents future tax revenue. It quite literally wouldn't be there otherwise. And spending that dollar causes the tax revenue to aris

Ever dollar in existence represents future tax revenue. It quite literally wouldn't be there otherwise. And spending that dollar causes the tax revenue to arise, which means all dollars and all bonds are the source of their own funding. It's basic monetary maths. https://new-wayland.com/blog/why-tax-matches-spending/ https://new-wayland.com/blog/why-tax-matches-spending/

nly 5y ago
This math just showing that total State/Government nominal spend must equal the total take through taxation, which is obviously correct and fine. However, currency is a medium of exchange that facilitates trade in place of barter. It's the oil in the engine, not the fuel. It's important to remember that transactions aren't just abstract financial events, they involve the exchange of time (labour) for some good or service. If you assume that all transactions in the economy ultimately deliver some fractional quantity of 'real wealth' (production of new goods and services, entertainment, knowledge, infrastructure etc), at some rate, then a similar geometric progression can be calculated for that. The thing is that a lot of that wealth creation depends on things that don't scale with the money supply. Simply put, no matter how many trillions of $'s you create there's only one Apple to buy with them. Tax on the other hand scales perfectly since it's just another economic lever. Low rates/yields are still a wealth inequality problem because bank deposits and, to a lesser extent, public equities are ways average people have been able to reallocate some of their idle funds to capture some of that value. Right now it seems an excessive amount of money is flowing to the few with the big ideas, good or bad, in desperation to spur further growth and there's lots of discussion about the 'everything bubble' because most assets are inflated.
- neilwilson 5y ago
  Trade has never had anything to do with barter. It’s always promises “Here’s a chicken, owe me one” Until you get that clear, you’ll not realise that the monetary circuit and the real circuit are only inductively connected. Money is the charger. Production is the toothbrush

nly 5y ago

This math just showing that total State/Government nominal spend must equal the total take through taxation, which is obviously correct and fine. However, currency is a medium of exchange that facilitates trade in place of barter. It's the oil in the engine, not the fuel. It's important to remember that transactions aren't just abstract financial events, they involve the exchange of time (labour) for some good or service. If you assume that all transactions in the economy ultimately deliver some fractional quantity of 'real wealth' (production of new goods and services, entertainment, knowledge, infrastructure etc), at some rate, then a similar geometric progression can be calculated for that. The thing is that a lot of that wealth creation depends on things that don't scale with the money supply. Simply put, no matter how many trillions of $'s you create there's only one Apple to buy with them. Tax on the other hand scales perfectly since it's just another economic lever. Low rates/yields are still a wealth inequality problem because bank deposits and, to a lesser extent, public equities are ways average people have been able to reallocate some of their idle funds to capture some of that value. Right now it seems an excessive amount of money is flowing to the few with the big ideas, good or bad, in desperation to spur further growth and there's lots of discussion about the 'everything bubble' because most assets are inflated.

neilwilson 5y ago
Trade has never had anything to do with barter. It’s always promises “Here’s a chicken, owe me one” Until you get that clear, you’ll not realise that the monetary circuit and the real circuit are only inductively connected. Money is the charger. Production is the toothbrush