Comment on Taxes are cool

• TrojanRoomCoffeePot@lemmy.world ⁨2⁩ ⁨months⁩ ago

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• Steve@communick.news ⁨2⁩ ⁨months⁩ ago

  It really is how this works.
  It’s just that nobody realised until the last couple decades. And now we have a century of inertia behind economic theories that says otherwise. A century of economic theory that’s been horrible at predicting the real economy.

  But it’s not difficult to understand.
  If a government can make money out of nothing to pay for anything it needs to (the definition of fiat currency), then it doesn’t need to collect taxes to pay for things. If it doesn’t need to taxes to pay for things, then what do taxes do? Taxes remove money from the economy, offsetting the money added by government spending from nothing. This is direct inflation control.

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  • CapuccinoCoretto@lemmy.world ⁨2⁩ ⁨months⁩ ago

    You’re onto a piece of something, but it’s a partial truth that you’ve perhaps over generalized.

    To your point, America is exporting it’s inflation globally so it can buy things with money it doesn’t have. I also agree to your point that neoliberal economics, especially how it is discussed in public through western (American) & bilkionaire owned media and government is a sham. This is some of the kernel of truth you speak of.

    You overstate your case when you talk about taxation and economics as a whole. Don’t throw the baby out with the bathwater.

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    • Steve@communick.news ⁨2⁩ ⁨months⁩ ago

      I don’t understand.

      exporting it’s inflation globally

      Do you mean inflation as increasing prices?
      Or increasing money supply?

      Neither matters realy as the USD is the global currency. Foreign and domestic together, are a single economy from point of view of the USD.

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      • CapuccinoCoretto@lemmy.world ⁨2⁩ ⁨months⁩ ago

        That’s it! You answered your own question. Because it’s the global reserve currency, it can inflate its money supply and gain the domestic benefits of money for nothing, but the negative impacts of “relatively more dollars chasing relatively fewer goods” are diluted among all global economies using the USD.

        It’s a limited and temporary advantage. As the world is finding out the hard way, any dealing with US assets now poses incalculable geopolitical risks. Not just from losing the defacto reserve status, but both from abandoning the rule of law for autocracy as well as from disruptive warmongering, tarrifs, broken deals, loss of trust and the inability to bargain in good faith.

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