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by that logic tax should be zero?
by exe34 2y ago
by that logic tax should be zero?
- dools 2y agoNot really, if there was no tax there would be no money. The most succinct way that I have found to express the relationship between taxation and spending is that spending at the federal level is constrained by aggregate spending this year, not tax receipts last year.
- exe34 2y agospending is constrained by whatever Congress says it is. the difference is borrowed.
- dools 2y agoIt's logically impossible for a government to borrow the currency it issues. What we refer to as borrowing is just swapping one government liability (reserve balances) for another (treasury bonds).
- exe34 2y agoyou don't borrow from the present, you borrow from the future and hope to pay it back with growth
- baq 2y agotaxes are how you don't have inflation. the government can also destroy money about as easily as it creates it, too. it isn't a politically (and usually economically) desirable thing to do. when it's done, it's usually via replacing the whole currency wholesale (e.g. brazilian real).
- exe34 2y ago> taxes are how you don't have inflation. or you know, don't print trillions to bail out failed banks.