tax doesn’t destroy money… tax money gets recirculated… tax money is part of the economy… it literally buys goods and services
where do you think it goes?!??? do you think governments just set fire to piles of cash?
yes printing cash is a thing that governments rarely do - mostly to replace physical cash that does get destroyed, but it’s generally a very bad economic policy for governments to print cash… it devalues their currency and has a lot of truly awful flow-on effects (like loss of confident in the currency as a whole) that are far worse than the effect of having the extra cash
… and also printing cash is the opposite of what we’re talking about
Tax absolutely does destroy money. You think the government has a bank account they collect tax dollars into? Taxation is one if the ways that the government removes money from the economy, and hence controls the amount of money in the economy.
Do you think there is a fundamental difference between you spending $20 at the grocery store vs the government spending $20 (through EBT/SNAP/WIC benefits) at the same store?
The only difference is how the money gets accounted for, it’s still circulating through people’s hands. It doesn’t just magically cease existing because it was collected via taxes.
There is a fundamental difference. If I want to buy $20 worth of stuff from the store, I need to have $20. The government just spends it, creates the money out of thin air. And it does, litteraly go back to thin air when the government takes it back. The is fundamental to the way the economy actually works - if the government had to actually physically have the money in an account in order to spend it, spending would become massively problematic and unweildly.
I don’t think you understand “the way the economy actually works” if that’s your take on how our money works and how govt spending works.
Also, if we’re talking about the USA, every state has some legal provisions regarding a balanced budget (except maybe VT?). So the state governments do account for having the budget balanced>
You’re right we run deficits in our budget but that doesn’t mean there isn’t debt being accounted for. You’re basically saying that our money magically ceases to exist when it’s collected as tax and that’s just wrong full send.
Right, and deficit spending proves my point. The government spends money that doesn’t exist. They don’t collect taxes in April, count it all up, see how much they’ve got, then work out the deficit, then create that much extra money. They spend what they want/need to spend, then remove excess from the economy with taxes.
The money supply guess up and down, it’s ultimately a number that is open for manipulation to some extent.
This isn’t necessarily undesirable, when the number can’t be controlled at all bad things happen as the mass psychology of economic participants do things to the market that can’t easily be countered.
Would you prefer “puts into circulation” and “removes from circulation” as terms? That works as well. Governments (that control their own currency, so not EU member states for example) don’t need to run a balanced budget, as long as you don’t mind inflation of deflation. The idea that governments need to operate like a company is a profoundly misguided, neoliberal one.
Coincidentally, I am a libertarian, just not the kind Americans tend to think of.
Not at all, that’s what neoliberalism wants you to believe. The government creates (by printing) and destroys (by taxing) money as wants
tax doesn’t destroy money… tax money gets recirculated… tax money is part of the economy… it literally buys goods and services
where do you think it goes?!??? do you think governments just set fire to piles of cash?
yes printing cash is a thing that governments rarely do - mostly to replace physical cash that does get destroyed, but it’s generally a very bad economic policy for governments to print cash… it devalues their currency and has a lot of truly awful flow-on effects (like loss of confident in the currency as a whole) that are far worse than the effect of having the extra cash
… and also printing cash is the opposite of what we’re talking about
Tax absolutely does destroy money. You think the government has a bank account they collect tax dollars into? Taxation is one if the ways that the government removes money from the economy, and hence controls the amount of money in the economy.
Do you think there is a fundamental difference between you spending $20 at the grocery store vs the government spending $20 (through EBT/SNAP/WIC benefits) at the same store?
The only difference is how the money gets accounted for, it’s still circulating through people’s hands. It doesn’t just magically cease existing because it was collected via taxes.
There is a fundamental difference. If I want to buy $20 worth of stuff from the store, I need to have $20. The government just spends it, creates the money out of thin air. And it does, litteraly go back to thin air when the government takes it back. The is fundamental to the way the economy actually works - if the government had to actually physically have the money in an account in order to spend it, spending would become massively problematic and unweildly.
I don’t think you understand “the way the economy actually works” if that’s your take on how our money works and how govt spending works.
Also, if we’re talking about the USA, every state has some legal provisions regarding a balanced budget (except maybe VT?). So the state governments do account for having the budget balanced>
You’re right we run deficits in our budget but that doesn’t mean there isn’t debt being accounted for. You’re basically saying that our money magically ceases to exist when it’s collected as tax and that’s just wrong full send.
Ok, I will admit that I am not an economist…
We’ve been deficit spending most of my life. That money, and then some, is going back into the economy.
What it does is make the middle class poorer and whoever the government gives it to richer.
Right, and deficit spending proves my point. The government spends money that doesn’t exist. They don’t collect taxes in April, count it all up, see how much they’ve got, then work out the deficit, then create that much extra money. They spend what they want/need to spend, then remove excess from the economy with taxes.
The money supply guess up and down, it’s ultimately a number that is open for manipulation to some extent.
This isn’t necessarily undesirable, when the number can’t be controlled at all bad things happen as the mass psychology of economic participants do things to the market that can’t easily be countered.
This is a great response to the prompt, “Tell us you’re a libertarian who doesn’t know anything about economics in fewer words.”
Would you prefer “puts into circulation” and “removes from circulation” as terms? That works as well. Governments (that control their own currency, so not EU member states for example) don’t need to run a balanced budget, as long as you don’t mind inflation of deflation. The idea that governments need to operate like a company is a profoundly misguided, neoliberal one.
Coincidentally, I am a libertarian, just not the kind Americans tend to think of.