Simple question to ask yourself. If the government can simply create money, which they can. Why would they need to fundraise through taxes. When they can simply print the money. Answer, they don’t. They can simply print it. The issue is that if you create too much you devalue it. Then you need to destroy some to bring it’s value back up.
This is why despite constant cries from the fascists bemoaning deficit spending. Claiming government should be run like a business. It’s all bullshit. When a government can print money and receive a 2x or better return on investment. Which they often do. Deficit spending effectively pays for itself.
I’m glad there are other people out here trying to explain how money actually works. I gave up a while ago cuz I got sick of being treated like a crazy person.
I think that, partially, people don’t like being told their folk wisdom is wrong… but more importantly, they don’t wanna believe that the people in power are either just as misinformed or deliberately lying.
The government cannot “simply print money”. In order to add new currency, the government sells bonds to the reserve banks. Future debt is exchanged for money to spend now. If the banks do not loan money to the government by buying the bonds, new money cannot be printed.
The accumulated bond debt is the national debt.
Tax income is used to make payments on the national debt (to pay off bonds which have reached their maturity period). You can also participate in this system by purchasing government bonds, it is not exclusive to banks.
If the government fails to make payment on the bond debt, then the government’s credibility drops and banks may choose not to buy new bonds, which immediately devalues the currency.
Functionally, the value of currency is based on faith that the government issuing the currency is solvent and will be able to make payments on its bonds in the future. Tax income is necessary to ensure that the government is solvent.
None of that has anything to do with Trump’s asinine tariffs, of course.
I’m pretty confident that selling bonds is not the only mechanism by which the government has access to money. Selling bonds is a common way for cities and states to raise funds, but I’m pretty sure the federal government can just … fund stuff.
Bonds are the mechanism by which the government issues new money. They cannot “print money” without selling the equivalent value in bonds.
I knew that’s what you meant but I don’t think that’s true. They choose not to because there’s concerns about inflation and devaluing the dollar, but there’s no constitutional restriction on that. The necessary and proper clause is pretty broad, as is Article I, Section 8, Clause 1.
down voted because I’m trying to understand but your punctuation makes it really difficult.
I will never understand why someone takes the time and effort to write a paragraph and then not bother to make sure that it’s actually comprehensible. why bother?
Monetary policy is a complicated subject, but stating that taxes, in this case tariffs, disappear money from the economy is at best misleading if not outright false. They are part of a cycle. Money is printed. Money is destroyed. If money wasn’t being laundered through the government then they wouldn’t just print money. They’d have no money to invest in printing.
If you are suggesting that taxes are disappeared from the economy then how would you explain government services. The government spent over 6 trillion dollars last year. They spent more than they made including taxes, hence a deficit, so not sure what you’re suggesting at this point.
Yes it’s true. Taxes don’t work that way either.
Simple question to ask yourself. If the government can simply create money, which they can. Why would they need to fundraise through taxes. When they can simply print the money. Answer, they don’t. They can simply print it. The issue is that if you create too much you devalue it. Then you need to destroy some to bring it’s value back up.
This is why despite constant cries from the fascists bemoaning deficit spending. Claiming government should be run like a business. It’s all bullshit. When a government can print money and receive a 2x or better return on investment. Which they often do. Deficit spending effectively pays for itself.
I’m glad there are other people out here trying to explain how money actually works. I gave up a while ago cuz I got sick of being treated like a crazy person.
I think that, partially, people don’t like being told their folk wisdom is wrong… but more importantly, they don’t wanna believe that the people in power are either just as misinformed or deliberately lying.
The government cannot “simply print money”. In order to add new currency, the government sells bonds to the reserve banks. Future debt is exchanged for money to spend now. If the banks do not loan money to the government by buying the bonds, new money cannot be printed.
The accumulated bond debt is the national debt.
Tax income is used to make payments on the national debt (to pay off bonds which have reached their maturity period). You can also participate in this system by purchasing government bonds, it is not exclusive to banks.
If the government fails to make payment on the bond debt, then the government’s credibility drops and banks may choose not to buy new bonds, which immediately devalues the currency.
Functionally, the value of currency is based on faith that the government issuing the currency is solvent and will be able to make payments on its bonds in the future. Tax income is necessary to ensure that the government is solvent.
None of that has anything to do with Trump’s asinine tariffs, of course.
I’m pretty confident that selling bonds is not the only mechanism by which the government has access to money. Selling bonds is a common way for cities and states to raise funds, but I’m pretty sure the federal government can just … fund stuff.
No, of course the government has other sources of revenue. That’s not what I said.
Bonds are the mechanism by which the government issues new money. They cannot “print money” without selling the equivalent value in bonds.
I knew that’s what you meant but I don’t think that’s true. They choose not to because there’s concerns about inflation and devaluing the dollar, but there’s no constitutional restriction on that. The necessary and proper clause is pretty broad, as is Article I, Section 8, Clause 1.
I’m not a lawyer though
down voted because I’m trying to understand but your punctuation makes it really difficult.
I will never understand why someone takes the time and effort to write a paragraph and then not bother to make sure that it’s actually comprehensible. why bother?
Monetary policy is a complicated subject, but stating that taxes, in this case tariffs, disappear money from the economy is at best misleading if not outright false. They are part of a cycle. Money is printed. Money is destroyed. If money wasn’t being laundered through the government then they wouldn’t just print money. They’d have no money to invest in printing.
If you are suggesting that taxes are disappeared from the economy then how would you explain government services. The government spent over 6 trillion dollars last year. They spent more than they made including taxes, hence a deficit, so not sure what you’re suggesting at this point.