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My landlord is dramatically different to a government quite obviously. Surely if a government takes money in tax, that money is no longer in the economy. Isnt

by comice 4y ago

My landlord is dramatically different to a government quite obviously. Surely if a government takes money in tax, that money is no longer in the economy. Isnt it in the one place we can say that the private sector cannot access? Is the US federal government required to immediately respend all tax takings? The article already establishes that the maximum money the federal government can spend is not limited by tax takings. Is the minimum money it can spend somehow limited by tax takings?

fallingfrog 4y ago
The government is not separate from the economy. It is part of the economy. I'll give you an example: the city where I live supplies clean water to the citizens. For this service they charge a fee to everyone who is hooked up to the city water supply. If that was a private company providing the same service, would it suddenly count as part of the economy where before it didn't? The same people would be providing the same service for the same fee. It doesn't make any sense to say that the service the city provides is not part of the economy. The same goes for every service the government provides. It employs people, takes in money, and spends money. It's part of the economy. No different from any corporation except that it has the right to do certain things that private corporations can't, and also it's run democratically whereas private corporations are not. And yes, they spend every penny they take in, because it makes no sense for them to do otherwise unless they are trying to intentionally reduce the amount of money circulating for some reason. Private corporations could do that too, if they wanted, they just don't.
- comice 4y ago
  > It doesn't make any sense to say that the service the city provides is not part of the economy. Your city doesn't issue currency though, so it's still different. Neither do corporations. > they spend every penny they take in, because it makes no sense for them to do otherwise unless they are trying to intentionally reduce the amount of money circulating for some reason I am specifically talking about doing that. The article claimed that the stimulus money would never come out of the economy. I suggested it can. I think we're in agreement. Perhaps we're just disagreeing on a finer detail: you say taxing alone does not remove money from the economy - the government needs to then not spend it again. Which I think is a fair way of looking at it but implies some things I'm not sure are definitely right. It's not like there is a vault with gold in it.

by comice 4y ago

fallingfrog 4y ago

The government is not separate from the economy. It is part of the economy. I'll give you an example: the city where I live supplies clean water to the citizens. For this service they charge a fee to everyone who is hooked up to the city water supply. If that was a private company providing the same service, would it suddenly count as part of the economy where before it didn't? The same people would be providing the same service for the same fee. It doesn't make any sense to say that the service the city provides is not part of the economy. The same goes for every service the government provides. It employs people, takes in money, and spends money. It's part of the economy. No different from any corporation except that it has the right to do certain things that private corporations can't, and also it's run democratically whereas private corporations are not. And yes, they spend every penny they take in, because it makes no sense for them to do otherwise unless they are trying to intentionally reduce the amount of money circulating for some reason. Private corporations could do that too, if they wanted, they just don't.

comice 4y ago
> It doesn't make any sense to say that the service the city provides is not part of the economy. Your city doesn't issue currency though, so it's still different. Neither do corporations. > they spend every penny they take in, because it makes no sense for them to do otherwise unless they are trying to intentionally reduce the amount of money circulating for some reason I am specifically talking about doing that. The article claimed that the stimulus money would never come out of the economy. I suggested it can. I think we're in agreement. Perhaps we're just disagreeing on a finer detail: you say taxing alone does not remove money from the economy - the government needs to then not spend it again. Which I think is a fair way of looking at it but implies some things I'm not sure are definitely right. It's not like there is a vault with gold in it.