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This sign says it all. (lemmy.world)
submitted 2 years ago by to c/aboringdystopia@lemmy.world
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[–] 6 points 2 years ago (10 children)

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.

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  • [+] 11 points 2 years ago* (last edited 1 year ago) (5 children)
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  • [–] 2 points 2 years ago (1 child)

    As far as I understand that's the definition of fungibility, right? Every dollar is interchangeable and identical?

    So there's no functional difference between deleting $1 and creating $1 except semantics, compared to moving $1, as long as the total value doesn't change.

    The government just deleting money and printing money to pay for whatever it wants suggests that those things aren't equal, which would be the problem if it were true.

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  • [–] 1 point 2 years ago (2 children)

    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.

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  • [–] 3 points 2 years ago (2 children)

    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.

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  • [–] 3 points 2 years ago (1 child)

    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.

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  • [–] 1 point 2 years ago

    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.

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