pull down to refresh
22 sats \ 2 replies \ @Undisciplined 23h \ parent \ on: Which is Worse: Taxes or Fiat Money? econ
With hard money, they have to loot the public to make loan payments, but that's not related to the value of the payment.
With fiat, they either loot the public to make the payment or pay with new money. Paying with new money causes devaluation, though.
You're right that taxation is part of both, but the alternative is different under fiat vs hard money. Under hard money, there's no repayment without taxation but under fiat there is still repayment via debasement. So, fiat needs taxation to avoid debasement, which I think was my original point.
so the first premise is just off: under fiat (i.e. USA today) isn't paying with new money.
- M2 is flat
- Fed balance sheet is shrinking
- and Fed seigniorage revenue to Treasury was always minor (and in the last 3 years has been negative).
There IS NO MONEY PRINTING FOR BONDS
So, fiat needs taxation to avoid debasement, which I think was my original point.
Even so, that doesn't work/answer OP's question...
reply
You could only say the first premise is off if there were also no tax revenue paying back the loans. To be fair, I left out the possibility of paying with newly borrowed money, which also applies to both cases and defers the ultimate question of where payment is going to come from.
reply