If your country is a financial sovereign -ie has a monopoly over its currency - then taxation’s only role is to create demand for that currency. If you don’t pay taxes in the currency of your sovereign, it will throw you in jail. The concept of ‘my tax dollar pays for your salary, Officer’ is nonsense on a Federal level. The government democratically decides what projects it will finance, and the central bank pays the invoices thereof, with money it creates from thin air. People/companies accept the governments money for their service because they are assured the govenment will accept their taxpayments in the same currency… That is how money enters the system, the sovereign creates it.
But on a State level though ‘my tax dollar’ is very real, coz the State is not a financial sovereign! While a State can go broke a finan sovereign can never accrue real debt in its own coin unless it chooses so. To pay interest to the financial sector, or pay into pension funds. A budget deficit is actually wealth that a sovereign injects into its society not sth that needs paying back.
It’s called MMT and you should study it.
NeoClassics say : the world has infinte resources, but… there’s not enough money. We have to get the money FIRST!!!
MMT says the inverse: money is created on 12 magic computers as Elon learned, thats easy. The hard part is finding the real resources. If they’re scarce, what are our priorities as a demicracy ? That’s the better question!
If your country is a financial sovereign -ie has a monopoly over its currency - then taxation’s only role is to create demand for that currency. If you don’t pay taxes in the currency of your sovereign, it will throw you in jail. The concept of ‘my tax dollar pays for your salary, Officer’ is nonsense on a Federal level. The government democratically decides what projects it will finance, and the central bank pays the invoices thereof, with money it creates from thin air. People/companies accept the governments money for their service because they are assured the govenment will accept their taxpayments in the same currency… That is how money enters the system, the sovereign creates it. But on a State level though ‘my tax dollar’ is very real, coz the State is not a financial sovereign! While a State can go broke a finan sovereign can never accrue real debt in its own coin unless it chooses so. To pay interest to the financial sector, or pay into pension funds. A budget deficit is actually wealth that a sovereign injects into its society not sth that needs paying back.
It’s called MMT and you should study it.
NeoClassics say : the world has infinte resources, but… there’s not enough money. We have to get the money FIRST!!!
MMT says the inverse: money is created on 12 magic computers as Elon learned, thats easy. The hard part is finding the real resources. If they’re scarce, what are our priorities as a demicracy ? That’s the better question!