Tuesday, September 17, 2019

Taxes and MMT

So, I've decided to update my Blog once again.  Sorry for the lack of updates, I'm distracted due to ADD, and my Mother died recently, so... Life sucks and we move on.  All righty then, moving on, the topic I've chosen for this post is Taxes and the Modern Monetary Theory. 

I love the idea of #FairTax totally eliminating and replacing the income tax system, which is far too complex and convoluted and enables the rich and big corporations to get so many exemptions, use so many loopholes, that not only do they pay NOTHING in taxes, they actually Receive tax credits. Fair Tax Fixes That. It ensures that the poor are unburdened from taxation while making sure that Everyone pays their fair share of taxes, whether they are criminals or law abiding, rich or middle class, big or small businesses.
And the second thing I feel I MUST get through to you all is that the Federal Government doesn't need taxes to pay for things. It never did. It is the Source of our currency. It literally prints money out of nothing, spends it into the economy, then uses taxes, and various fees, to pull it back out of the economy in order to control inflation, and ensure demand for the currency. Too much inflation would be bad. And if no one Had to use USD as the Only Legal Tender it is much more likely to be abandoned as worthless.
Both sides use tactics around taxes to get what they want. The Right uses Fear of taxation, the taking away of your hard earned money, to convince people to not support programs that help people. The Left uses Hate of the Rich, making taxes into a Cudgel to punish the Rich and Force the Rich to do what they want. Both Sides Are Wrong to do this!
Instead of using taxes to punish and control people, or using taxes to manipulate people into not supporting programs that actually Help people, we should educate people on the Positive Purposes of taxation.
1) To ensure demand for our Currency, without which the currency will be vulnerable to being abandoned
2) To provide a return path for the money that is spent into the economy, thus completing the circuit, thus making it A Currency, which helps control inflation and keep it from running out of control.
I repeat, the Federal government doesn't have to wait until it has received tax dollars from You and Me before it can spend a single cent on anything. Congress is ultimately in control of our entire money supply. Congress Decrees that money be created by the Federal Reserve, they create it out of Nothing, which is mostly in Digital form rather than physical, and transfers these newly "minted" funds into Federal control by purchasing Federal Bonds.
This purchasing of Federal Bonds is technically considered Debt, but the Federal Government has no obligation to repay a cent of it to the Federal Reserve, and therefore it is nothing more than an accounting process. A way to move new money from one part of the Government to the other.
So when people talk about the National Debt, they are not talking about how much money we owe each other, or banks, or other countries. They are talking about how much money has been printed into existence and spent into the economy, and has not yet been returned via taxes and destroyed on paper. It's just a scare tactic. The Federal Debt is a good thing for our economy, without it we wouldn't have a monetary system at all.
This is what I've learned after I heard about #MMT, Modern Monetary Theory. Now, State and City taxes are very different beasts. Since no State or City can print as much money as they want they have to raise funds to be able to spend anything, and if they can't do it through taxes they'll have to Borrow money, or somehow get Federal Funding for things.
State and City taxes should not be harmful to the majority of people living in each State or City. Right? Therefore if a City or State can't get funding for something via taxes, they need to get creative, or abandon whatever it was they were trying to pay for.
Should each City or State bear the majority of the burden for caring for people like me who need money, shelter, and health care? I think not. I think the Federal Government should bear the greater, if not the Entire, burden.