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All of your post assumes that when government creates money, it causes inflation, and when private banks create money, it causes no inflation. No such distincti
by ClumsyPilot 4y ago
All of your post assumes that when government creates money, it causes inflation, and when private banks create money, it causes no inflation. No such distinction exists. Most money is created by private banks.
- ErikVandeWater 4y agoI know most money is created by private banks. But that is stable (it is assumed by ceteris paribus). If a government decided to stop taxing then that would be something new.
- ClumsyPilot 4y agoIs a good assumption that money created by private banks more stable than government created money? what economic mechanism provides such guarantee and what is the evidence? Private banks used to be able to print their own currency completely: in one country each bank would have different money that coupd be redeemed for gold, and wasn't backed by the government. That was very unstable. We basically stopped taxing multinationals after the end of cold war, we do have something new.