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The government has a money source and a money sink, and the idea that input and output must balance is an anachronism dating to days of physical currency. Under MMT, the government spends the amount it needs to spend to fulfill its obligations, and taxes the amount it needs to tax to prevent inflation. Under this model the purpose of taxation is not to collect money so that it can be spent (since government spending comes from the money source), but rather to collect money so that it can be destroyed by feeding it into the government's money sink. In a growing economy with a growing population it's implausible that balancing inflow and outflow would be ideal, since over long time scales that would result in the number of dollars per person and per unit of economic activity to decrease, leading to deflation.


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