Not to fund itself, but to manage demand for the sovereign money it creates.
Taxes create and sustain demand through threat of punishment via the state’s monopoly on the use of force. They also manage inflation by withdrawing money from circulation.
I know you’re asking rhetorically to needle the good old boys at Boyd; just thought I’d make it clear to others how conspicuous their silence is here!
The welfare state is on the whole a productive investment. Providing educational opportunities are sound investments. Reducing infant mortality is a sound investment. Preventing families from breaking up ( a consequence of hunger and homelessness) is a sound investment. Preventing environmental disasters are often sound investments.
To stop funding unnecessary and corrupt wars is probably the easiest saving the US could make currently.
> The problem, however, is that much of today’s borrowing is not going to growth-inducing public capital, but to financing the welfare state and current consumption, which leaves future taxpayers with the bill yet no corresponding productive return.
Bit misleading to discuss public debt without discussing private credit tho right? Aren’t they two sides of the same ledger? And surely that growth in private credit could be giving future taxpayers their “corresponding productive return” in the form of economic growth?
Why does the government need the money that it has already spent or lent, via banks, to be returned, to fund itself?
Not to fund itself, but to manage demand for the sovereign money it creates.
Taxes create and sustain demand through threat of punishment via the state’s monopoly on the use of force. They also manage inflation by withdrawing money from circulation.
I know you’re asking rhetorically to needle the good old boys at Boyd; just thought I’d make it clear to others how conspicuous their silence is here!
The spending, taxing, bond buying sequence is indisputable. No one has a dollar to spend unless the government first issues it.
Why does the government need the money that it has already spent or lent, via banks, to be returned, to fund itself?
Issuing US Treasuries is a relic of privilege and a fine example of THE welfare state.
The welfare state is on the whole a productive investment. Providing educational opportunities are sound investments. Reducing infant mortality is a sound investment. Preventing families from breaking up ( a consequence of hunger and homelessness) is a sound investment. Preventing environmental disasters are often sound investments.
To stop funding unnecessary and corrupt wars is probably the easiest saving the US could make currently.
> The problem, however, is that much of today’s borrowing is not going to growth-inducing public capital, but to financing the welfare state and current consumption, which leaves future taxpayers with the bill yet no corresponding productive return.
Bit misleading to discuss public debt without discussing private credit tho right? Aren’t they two sides of the same ledger? And surely that growth in private credit could be giving future taxpayers their “corresponding productive return” in the form of economic growth?