Fozz,

If that were the case, then why would a government bother taxing its' people? Do they just do it for fun? According to you they would just print more money. Hilarious!
Assuming this were true, it would then also be reasonable to assume that our currency would be about as valuable as Zimbabwe's, but it isn't.

I've read quite a few of your posts now, and not one of them has any basis in reality, logic, or true economics.

Utter BS mate, which leads me to believe you had a Keynesian lecturer at Uni, (if you went at all) and you actually swallowed it.

The aspects of economics that Keynes got right were not new, and the rest he got completely wrong. Keynes was an upper class toff, who was narrow minded, hated the proletariat, was unaware of how humans interact or think as individuals, and was not omniscient as you seem to believe.

I just don't understand how so many professional economists, and you right.
Your logic would most likely be questioned by a small child.

Governments DON’T create wealth. They steal from one section of society via coercion, to give to another section which they personally prefer, or hope will deliver votes down the road.

Even the Chinese have figured this out, and have therefore opened their economy to free trade. They realised they were going nowhere with government as the sole economic power. Hey presto, the standard of living rose, and wealth was created. NOT by the government, but by private citizens.

How on earth one can believe that government knows best how to create wealth, let alone manage an economy defies logic, especially these days when barely any of them, (particularly on the left) have ever held a real job, or run a real business.

Don’t bother with a retort, as I know it will be rubbish before you even start typing, since you live in a fantasy world, and I’m not going to read it anyway. Besides it would only make all who read it dumber for having done so

Rechts,

it is clear that you do not understand the basic functioning of our modern monetary economy. It does not function according to "left wing" or "right wing" prinicples, our individual political outlook has no effect on this.

Think hard about where money comes from. Then clearly explain, step by step how private citizens somehow create wealth in the absence of the currency monopolist (federal government in this country). How does economic growth of itself magically create the medium of exchange necessary to finance itself? How does the market of itself expand the money supply?

Word limits do not permit detailed explanations here but basically: we run a fiat money system. The federal government does not get this money from anywhere. It simply spends it into existence by crediting bank accounts in the commercial banking system. When it taxes, the money does not go to a government bank account. The government simply debits bank accounts and the money goes....to oblivion. It is extinguished.

The (federal) government's spending is not revenue constrained. It simply creates what it desires to spend. Because it does not make sense to save what one can simply create, federal budget surpluses are not national savings. They are simply an accounting statement indicating that the government has removed more money from the economy in tax than it has added by spending.

If it did not require everyone who works or does business to pay some of this currency that it has simply created from thin air back to it in tax, the currency would be more or less worthless. This is why they tax.

I no doubt approach the word limit but you must try to appreciate that a federal budget is not REMOTELY the same thing as a household budget. Public and private sectors are two sides of the same coin and federal government is a CRUCIAL part of wealth creation. But refer back to my second paragraph - clearly explain this magical, self-financing economic expansion that does not need the issuer of currency.

Fozz

“…clearly explain … how private citizens somehow create wealth in the absence of the currency monopolist (federal government in this country).”

You mean, how would private citizens create wealth in the absence of the currency monopolist, yes?

In the absence of fiat money, citizens would use money supplied by the market - as they did before government became a currency monopolist.

“How does the market of itself expand the money supply? How does economic growth of itself magically create the medium of exchange necessary to finance itself?”

There is no magic in it. It is simply the economics of productive activity using a medium of exchange.

The market doesn’t need to expand the money supply to finance economic growth. (To answer your question, it expands the money supply by increasing the supply of whatever is being used on the market as money: gold, silver, cigarettes, shells.) But the reason it doesn’t need to expand it in order to finance economic growth is because prices are exchange *ratios*. What matters is the *relative*, not the absolute amount of money.

To finance economic growth, say a particular project, *expansion* of the money supply is not necessary, any more of fiat money than of shells or cigarettes. The same total quantity of money stuff will suffice, even if the total economy increases in size. All it means is that the price of money, the value of the money unit, will go up in terms of goods.

“The (federal) government's spending is not revenue constrained. It simply creates what it desires to spend.”

But according to you, the federal government's spending is revenue constrained, because the creation of new notes causes the value of the existing notes to decline in value, which is why, according to you, they need to reduce the amount of notes in circulation by taxation.

Therefore by your own admission, the government is not creating real wealth by printing paper. It is diluting the value of the money stock, and it can only do that by transferring real actual wealth from all the other holders of banknotes.

Fozz
It is you who have completely failed to understand the modern monetary system.

As proof, governments have taxed for millennia. Tax is - (or according to you, was) - a forced taking of other people’s wealth, whether in cash or in kind.

So according to your theory, the nature of
1. taxation
2. of money as a medium of exchange, and
3. of productive activity itself

must have *fundamentally changed* in history some time after fiat money was brought in, so as to change the function of
1. taxation from revenue raising to currency deflation,
2. the function of money from medium of exchange to magic pudding, and
3. productive activity from based on work and savings, to based on bureaucratic decision.

This disproves your theory, otherwise clearly explain what, how and when each of those changes was.

It is hard to comprehend the confusion of ideas that must have given rise to your theory that real actual wealth is created by stamping paper, and the laughable belief that government is the source of all wealth.

According to your theory, why not just abolish private property and human freedom altogether? Totalitarian government would be more productive! Laughable.

So let me ask you this. Why government? Why not the local soccer club? What was it about government as an organization that made it the fountain of all productive activity?

“government is a CRUCIAL part of wealth creation”
But according to you, only in its capacity as a monopoly currency supplier, yes? But that is not an argument that government is a crucial part of wealth creation, since if they stopped imprisoning the competition, the competition would provide the same service. (They would actually provide the same or better service cheaper – that’s why governments imprison them!)

I have clearly explained what you asked; let me know if not.

Now you need to clearly explain the answers to all the questions asked.

Your theory is mere confused a-historical, anti-economic voodoo and you are being publicly thrashed and humiliated, only your shameless ignorance doesn't understand so.

[i have avoided comment..because so many missconceptions have occured on this..[and..a simular thread..but..will attempt to put my opinion on the matter]

first..govts dont issue fiat money..[the fed does]..the worlds/feds were taken from govt..by debt from war..[money was lent by govts and presure was put to sign over the worlds/fed's..to the money changers..[read..'creatures from jeckle-island'..]..the us fed for egsample was sold for 44.4 billion

how govt gets money is/by issue of a bond..the fed converts to fiat credit..[all income-tax goes straight to the fed,..to repay govt-debt..[at intrest]..tax..on income arose after privatisation of the fed reserves..[the hansard/debates at the time mention;..debate was to be minimised because of the urgency of the matter..[income-tax was held to be unconstitutional..[then as now]

anyhow..money was a..'promise to pay'..[in weight of silver]..thus we had pound notes,..on them was written..''promise to pay bearor one pound silver''..[sterling silver..[thus was the/pound-note called pound sterling,..according to the grade of silver..redeemable for the note

[at decimilisation..'silver'..became nickle..[the only..'true-silver'..coin[to survive decimalisation]..was the round 50 cent piece..[today containing arround 8 dollars of silver..[while due to inflation the 50 cent/nickle-coin..is now near 50 cents worth of..nickle

this in no way excuses the theft..of our silver..[coin is the only constitutionaly legal tender]..[our one/two cent pieces contained 5/10 cents..[of coppper]..before they too were stolen by the fed...

the fed lends fiat paper..[and virtual-credit to the bankers..[to get into the banking/scam..you need to put up a set/payment..to get a multiple of that..in fed paper/credit to lend at intrest..[that created money..has nothing to do with govt]

the fed..to print money..pays the mint 7 cents..[a note]..to print the notes..[govt can no longer order the printing of any money,..any payments made to govt..go to the fed..[via the treasury]...before the fed stole our silver..it..stole our gold

[once upon a time a pound/was a pound of gold]..then it became a/pound of silver..ie..[pound/sterling]..now its two bucks..[or a few hundred grams of nickle]..not silver/not gold/not govt,..just a nice banking-cartel...lurk..charging govt..intrest..to lend our..'own'..money..[sorry legal-tender]...lol

How about you educated economists answer a back to basics question or two. We hear so much money has been lost worldwide, so where is that money now? Who has it or where is it? Who has increased their wealth from all the money that has been 'lost' in this present world economic crisis?

We know steel mills engage in meldowns. Where is the lost money?