3 ms·

> every government choice is a tax I realize you have interpreted my comment as suggesting this, but that really wasn't my intent. It was really just about tax

• JumpCrisscross 2y ago
  > It was really just about tax vs spend, and if they differ Consider a kingdom on the gold standard that borrows the gold it spends. Their actions do not change the monetary base. They do increase the velocity of money, but by no more than had they taxed it (minus wealth effects).
  • dekken_ 2y ago
    > that borrows the gold it spends. I must be retarded because I don't see how this makes a difference. Even if you're getting 0% interest loan (unlikely) you still have to pay it back, which will eat into future taxation? And if you don't pay it back they would be justified adding duties to all exports, recouping that way, by inflated prices... > Their actions do not change the monetary base. Assuming they don't find more gold...
    • JumpCrisscross 2y ago
      > which will eat into future taxation? Yes. But the amount of gold in the system is always conserved. Monetarily, the fact that it's borrowed is irrelevant. Also, if the borrowing is used to increase economic activity, it need not eat into future taxes for anyone. The classic example is borrowing to buy upgraded farm equipment, or to irrigate previously-fallow land. > Assuming they don't find more gold Orthogonal and thus irrelevant to the question of whether borrowing fundamentally causes inflation.