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> For example you can have as much debt as you like but because of inflation those debts will always be repayable If this is true, then why is the government c

by rank0 5y ago

> For example you can have as much debt as you like but because of inflation those debts will always be repayable If this is true, then why is the government collecting any taxes at all? If any amount of debt is sustainable, I am livid that I have to work for the government 4 months/year. Also, inflation is a terrible thing. It deeply widens the gap between the rich and the poor. Poor people don't have any assets. Their purchasing power evaporates while those with houses and equities greatly expand their net worth.

andy_ppp 5y ago
Taxes reduce inflation… this is MMT not me saying this stuff. Believe it or not as I understand it spending happens before taxes are collected by the government magically creating the money from thin air.
jlokier 5y ago
> If this is true, then why is the government collecting any taxes at all? If any amount of debt is sustainable, I am livid that I have to work for the government 4 months/year. If government services were paid for only by government borrowing instead of taxation, you'd still be "working for the government" for some share of your efforts. It would show up as increased inflation instead. (I think this "invisible taxation" would feel like a psychologically better deal to some people, even if everyone was worse off.) It wouldn't be progressive as in "progressive taxation" any more. Removing progressive taxation has many effects, generally harming the poor more than than the rich and widening the gap between rich and poor, and as you note, general inflation has this effect as well. So perhaps it's better for the government to collect taxes after all.
- rank0 5y ago
  Of course the government needs to collect taxes. My comment was a rhetorical one to illustrate the silliness of the idea “any amount of debt is fine” If that were REALLY true, it shouldn’t matter if the government does or does not collect taxes. Not sure I’m explaining my self well… so to reiterate: If any arbitrarily large deficit is acceptable, what would happen if tax revenue fell 90 percent? No sane person supports eliminating taxes…but lots of people believe the national debt can be infinite.

by rank0 5y ago

andy_ppp 5y ago

Taxes reduce inflation… this is MMT not me saying this stuff. Believe it or not as I understand it spending happens before taxes are collected by the government magically creating the money from thin air.

jlokier 5y ago

> If this is true, then why is the government collecting any taxes at all? If any amount of debt is sustainable, I am livid that I have to work for the government 4 months/year. If government services were paid for only by government borrowing instead of taxation, you'd still be "working for the government" for some share of your efforts. It would show up as increased inflation instead. (I think this "invisible taxation" would feel like a psychologically better deal to some people, even if everyone was worse off.) It wouldn't be progressive as in "progressive taxation" any more. Removing progressive taxation has many effects, generally harming the poor more than than the rich and widening the gap between rich and poor, and as you note, general inflation has this effect as well. So perhaps it's better for the government to collect taxes after all.

rank0 5y ago
Of course the government needs to collect taxes. My comment was a rhetorical one to illustrate the silliness of the idea “any amount of debt is fine” If that were REALLY true, it shouldn’t matter if the government does or does not collect taxes. Not sure I’m explaining my self well… so to reiterate: If any arbitrarily large deficit is acceptable, what would happen if tax revenue fell 90 percent? No sane person supports eliminating taxes…but lots of people believe the national debt can be infinite.