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I think the argument is that governments don't fund public goods through taxes but through issuing currency, while taxes guarantee a demand for currency and pre
by eucyclos 8mo ago
I think the argument is that governments don't fund public goods through taxes but through issuing currency, while taxes guarantee a demand for currency and prevent its devaluation. Hence the 'function' of taxes really is to 'destroy' money to prevent oversupply.
Not sure I disagree, though of course that's not how the system works formally.
- titanomachy 8mo agoI don’t completely follow the logic yet. If the government stopped collecting taxes, they could only fund services by taking on ever-increasing debt, right? It’s not like money created by central banks just goes straight into the government’s income.
- eucyclos 8mo agoOfficially no, though bond purchases are the most common thing central banks do with cash. Unofficially though, new currency is mostly worth anything at all because it's backed by the 'full faith and credit ' of the hosting country. Faith and credit to accept it as payment for future debts to the country, ie taxes.