Not at all. Look up MMT. Modern monetary theory and economics are well beyond “spend taxes to fund programs”. Governments that issue debts in their own made up currency don’t need to “spend” money, they just give money to the programs they support.
Yes, they both create and delete money. That doesn’t mean that the two processes need to be equal or balanced.
Your purchases do, or someone is owed their portion of the transaction. That’s not the case when the government is writing bonds or appropriating funding to programs. They can create money freely, regardless of the tax they collect. Taxes serve a different purpose.
That would increase inflation drastically, which is something governments absolutely don’t want.
They want inflation to be around 1-2%. Less is no good, because rich idiots would just hoard money instead of investing it. More is also no good because saved money would just disappear quickly.
You are aware of the fact that central banks are usually independant institutions and whenever the government meddles with them, that countries currency gets fucked by the market?
Also in todays interconnected financial and real economy there is only so much control any government canexert iver its currency, because the currencies values is significantly determined by the exchange from imported and exported goods.
While both points are true, that still doesn’t change whether taxes fund these programs.
Sure there are other complexities like “how much is too much? Can we just keep doing it forever?” but those questions have more to do with the labor force of said country and their exports, and almost nothing to do with their tax rates.
The central banks control the amount of money based on the tasks they were given for their operation. That does not relate directly to the way the government is spending or taking money.
It is simply not the governments taxes and spending that is making or deleting money. It is the system of how the private banks can borrow or deposit money at the central bank with a certain interest rate,that is making or deleting money.
And youll have noticed that it is not the central bank granting loans to the government but bonds being sold on the market for the government to take debt.
MMT is techbros just trying to say, “don’t look behind the microvaluation curtain, it doesn’t matter.” But in the amounts that they’re trading on, it absolutely does matter.
Not at all. Look up MMT. Modern monetary theory and economics are well beyond “spend taxes to fund programs”. Governments that issue debts in their own made up currency don’t need to “spend” money, they just give money to the programs they support.
So money goes in and gets deleted, and then they create money and they give it away?
When I think of it, I do the same thing every time I buy something.
The money in my bank account doesn’t get transferred, the bank just deletes it on their servers and then they create money and give it to the store.
Yes, they both create and delete money. That doesn’t mean that the two processes need to be equal or balanced.
Your purchases do, or someone is owed their portion of the transaction. That’s not the case when the government is writing bonds or appropriating funding to programs. They can create money freely, regardless of the tax they collect. Taxes serve a different purpose.
That would increase inflation drastically, which is something governments absolutely don’t want.
They want inflation to be around 1-2%. Less is no good, because rich idiots would just hoard money instead of investing it. More is also no good because saved money would just disappear quickly.
Tell that to Japan. One of the highest spenders. Still stuck in perpetual de flation for over 20 years at this point.
It’s not that simple.
You are aware of the fact that central banks are usually independant institutions and whenever the government meddles with them, that countries currency gets fucked by the market?
Also in todays interconnected financial and real economy there is only so much control any government canexert iver its currency, because the currencies values is significantly determined by the exchange from imported and exported goods.
While both points are true, that still doesn’t change whether taxes fund these programs.
Sure there are other complexities like “how much is too much? Can we just keep doing it forever?” but those questions have more to do with the labor force of said country and their exports, and almost nothing to do with their tax rates.
The central banks control the amount of money based on the tasks they were given for their operation. That does not relate directly to the way the government is spending or taking money.
It is simply not the governments taxes and spending that is making or deleting money. It is the system of how the private banks can borrow or deposit money at the central bank with a certain interest rate,that is making or deleting money.
And youll have noticed that it is not the central bank granting loans to the government but bonds being sold on the market for the government to take debt.
MMT is techbros just trying to say, “don’t look behind the microvaluation curtain, it doesn’t matter.” But in the amounts that they’re trading on, it absolutely does matter.