5 ms·

No you're not. They're employed by the state which is managed by the politicians you elect. I presume you mean to imply that civil servants are paid by your ta

No you're not. They're employed by the state which is managed by the politicians you elect. I presume you mean to imply that civil servants are paid by your taxes, but that's not true either if we're talking about a sovereign state - a moments consideration would show that spending must preceed taxation, which is true as a matter of accounting. Really you'd do better to note that state employees allow you to get money enabling you to pay your taxes (but that's also not a very helpful way to look at it).

bombcar 3y ago
If you're trying to apply modern money theory, it only works at the federal level (in the USA), state and local governments are directly affected by taxation which must precede spending (or they have to issue warrants or bonds). This comes back to bite California every time there is a major tax revenue crunch for whatever reason.
- candiddevmike 3y ago
  How does that work with states like IL being massively in debt due to overspending and pensions?
  - bombcar 3y ago
    If "in debt" means "they can keep issuing bonds and people are buying them" then they're fine. If it means "they cannot make payments on bonds and cannot issue new ones because nobody wants them" then the Feds will have to step in, or they'll have to liquidate state assets (including privatizing various governmental functions, selling land and leasing it back, etc), or raise taxes to balance the budget. They literally cannot print money. This cycle has already destroyed a few cities (usually the city gets swallowed by the county). There's a step where they issue "warrants" like CA did a few times: https://taxfoundation.org/blog/california-issuing-state-warrants-pay-bills/ https://taxfoundation.org/blog/california-issuing-state-warr...
  - lotsofpulp 3y ago
    It means people pay sky high tax rates, and deal with lower quality government services, and the government sells of infrastructure like their parking meters. Also, land does not appreciate and the state is handicapped in attracting new highly profitable businesses. https://reason.com/2019/03/01/companies-should-avoid-states-with-huge/ https://reason.com/2019/03/01/companies-should-avoid-states-...
- hgomersall 3y ago
  As I said, a sovereign state. (Though I did edit that clarification so you might have missed it).
otterley 3y ago
As taxpayers, we most certainly do collectively pay for government services.
- hgomersall 3y ago
  Pray show me the accounting for how that works... Edit: here's my offer for the UK case: https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis https://www.ucl.ac.uk/bartlett/public-purpose/publications/2... If you want to argue something that directly contradicts that analysis, I await with anticipation.
  - apetresc 3y ago
    I'm not sure I understand your objection. Why are we taxed at all, if not to pay for government expenditures?
    - marcus0x62 3y ago
      Because something something MMT something something.
      - eropple 3y ago
        I know you're goofing on it, and tbh I give more credence to MMT than most folks do, but most folks I know who think about MMT still acknowledge that if people believe they're being taxed to pay for things, they still kinda are. MMT is a guiding principle for policy, not something to tell individuals how their relationship with the state actually works (because most folks don't care).
        hgomersall 3y ago
        You make a good point, which is that even through an MMT lens, tax and spend should be the norm, since the resource provisioning and supply should balance to avoid inflationary pressure. However, I suggest they probably should care given how much policy is guided by an incorrect understanding of the monetary system. The whole concern about deficits and sovereign "debt" is the obvious one. In addition, a good understanding of why taxation is necessary helps to understand which taxes might be useful and which are not. Finally (for now!), policy options open up when you understand this stuff properly that make no sense at all through the state-as-a-household view. Politicians need to be held to account and an ignorant population is not able to do that.
s1artibartfast 3y ago
> a moments consideration would show that spending must preceed taxation, which is true as a matter of accounting. Can you elaborate on that? I can think of numerous examples from history for how governments bootstrap themselves. If your point is as simple as who pays the tax collector, the tax collector can be paid on commission, debt, or with plunder.
- hgomersall 3y ago
  This is a comprehensive analysis: https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis https://www.ucl.ac.uk/bartlett/public-purpose/publications/2... The general case is more or less the same as the UK with only the details varying. As noted elsewhere, this doesn't apply to non sovereign states.

bombcar 3y ago

If you're trying to apply modern money theory, it only works at the federal level (in the USA), state and local governments are directly affected by taxation which must precede spending (or they have to issue warrants or bonds). This comes back to bite California every time there is a major tax revenue crunch for whatever reason.

candiddevmike 3y ago
How does that work with states like IL being massively in debt due to overspending and pensions?
- bombcar 3y ago
  If "in debt" means "they can keep issuing bonds and people are buying them" then they're fine. If it means "they cannot make payments on bonds and cannot issue new ones because nobody wants them" then the Feds will have to step in, or they'll have to liquidate state assets (including privatizing various governmental functions, selling land and leasing it back, etc), or raise taxes to balance the budget. They literally cannot print money. This cycle has already destroyed a few cities (usually the city gets swallowed by the county). There's a step where they issue "warrants" like CA did a few times: https://taxfoundation.org/blog/california-issuing-state-warrants-pay-bills/ https://taxfoundation.org/blog/california-issuing-state-warr...
- lotsofpulp 3y ago
  It means people pay sky high tax rates, and deal with lower quality government services, and the government sells of infrastructure like their parking meters. Also, land does not appreciate and the state is handicapped in attracting new highly profitable businesses. https://reason.com/2019/03/01/companies-should-avoid-states-with-huge/ https://reason.com/2019/03/01/companies-should-avoid-states-...
hgomersall 3y ago
As I said, a sovereign state. (Though I did edit that clarification so you might have missed it).

otterley 3y ago

As taxpayers, we most certainly do collectively pay for government services.

hgomersall 3y ago
Pray show me the accounting for how that works... Edit: here's my offer for the UK case: https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis https://www.ucl.ac.uk/bartlett/public-purpose/publications/2... If you want to argue something that directly contradicts that analysis, I await with anticipation.
- apetresc 3y ago
  I'm not sure I understand your objection. Why are we taxed at all, if not to pay for government expenditures?
  - marcus0x62 3y ago
    Because something something MMT something something.
    - eropple 3y ago
      I know you're goofing on it, and tbh I give more credence to MMT than most folks do, but most folks I know who think about MMT still acknowledge that if people believe they're being taxed to pay for things, they still kinda are. MMT is a guiding principle for policy, not something to tell individuals how their relationship with the state actually works (because most folks don't care).
      - hgomersall 3y ago
        You make a good point, which is that even through an MMT lens, tax and spend should be the norm, since the resource provisioning and supply should balance to avoid inflationary pressure. However, I suggest they probably should care given how much policy is guided by an incorrect understanding of the monetary system. The whole concern about deficits and sovereign "debt" is the obvious one. In addition, a good understanding of why taxation is necessary helps to understand which taxes might be useful and which are not. Finally (for now!), policy options open up when you understand this stuff properly that make no sense at all through the state-as-a-household view. Politicians need to be held to account and an ignorant population is not able to do that.

s1artibartfast 3y ago

> a moments consideration would show that spending must preceed taxation, which is true as a matter of accounting. Can you elaborate on that? I can think of numerous examples from history for how governments bootstrap themselves. If your point is as simple as who pays the tax collector, the tax collector can be paid on commission, debt, or with plunder.

hgomersall 3y ago
This is a comprehensive analysis: https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis https://www.ucl.ac.uk/bartlett/public-purpose/publications/2... The general case is more or less the same as the UK with only the details varying. As noted elsewhere, this doesn't apply to non sovereign states.