Government Can Print Money: Why Pay Taxes?
Fef
2012/05/25 18:26:05
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I don't know too many people Right or Left of center that oppose taxes completely. We disagree on the details: who should pay how much; how the government levies taxes; how it collects taxes; national vs state vs county vs city taxes; sin taxes; property taxes; progressive vs regressive vs flat vs consumption taxes; and taxes in its many incarnations.
Paying the "right amount" of taxes funds the government to do its necessary business, which includes at least the national defense, elections and the judicial system. Some can argue for property taxes to pay for local schools, others will argue that we need cigarette taxes to pay for government sponsored cancer research.
Printing more money, however, almost always hurts the economy by causing inflation and distrust in the future stability of the currency. We need to understand two financial terms inflation and monetary inflation:
Inflation has negative effects on savings and hurts the poor first.
The sign (below) held by Tea Party protesters at an anti-Obama protest mocks the monetary inflation policy America that occurred during Obama's presidency. It also indirectly refers to the fact that nearly half of Americans don't pay federal income taxes (second chart below). The top 1% of income earners pay nearly 37% of all federal income taxes. Don't buy the class warfare argument of the Democrats that the rich don't pay their fair share -- more Americans should pay something.
Paying the "right amount" of taxes funds the government to do its necessary business, which includes at least the national defense, elections and the judicial system. Some can argue for property taxes to pay for local schools, others will argue that we need cigarette taxes to pay for government sponsored cancer research.
Printing more money, however, almost always hurts the economy by causing inflation and distrust in the future stability of the currency. We need to understand two financial terms inflation and monetary inflation:
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
Monetary inflation is a sustained increase in the money supply of a country. It usually results in price inflation, which is a rise in the general level of prices of goods and services .
Inflation has negative effects on savings and hurts the poor first.
The sign (below) held by Tea Party protesters at an anti-Obama protest mocks the monetary inflation policy America that occurred during Obama's presidency. It also indirectly refers to the fact that nearly half of Americans don't pay federal income taxes (second chart below). The top 1% of income earners pay nearly 37% of all federal income taxes. Don't buy the class warfare argument of the Democrats that the rich don't pay their fair share -- more Americans should pay something.
Top Opinion
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antlergirl21 2012/05/25 18:31:43
“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." -- Napoleon Bonaparte, 1815
"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people. " - Thomas Edison, The New York Times
“The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's ...
“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." -- Napoleon Bonaparte, 1815
"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way. It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people. " - Thomas Edison, The New York Times
“The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power." Abraham Lincoln Senate document 23, Page 91. 1865
The Europeans recognized the danger to their financial cartels when the London times published in 1865 this piece regarding our government printing its own currency as Lincoln wished to do:
"If this mischievous financial policy, which has its origin in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe." - Hazard Circular - London Times 1865.
Whenever you hear that someone doesn't pay "federal income tax", that doesn't mean that they pay nothing at all.... It just means that they don't have an additional tax bill when they file. But they DO pay payroll taxes. Even if they get a refund.
If someone has $5000 (for example) in Federal withholdings for the year, and manage to get a $2500 refund... They still payed $2500. But, these stats are never counted by conservatives because, they're technically not classified as "income taxes".
Of course money printed with nothing backing it (fiat money) hurts the economy and increases infation.
And of course more people should pay into the system. If even 1 person must pay income tax then all people should have to pay it... we are an equal opertunity nation.
BUT the answer to the problems in the country can not be found in either choice provided becasue teh answer is to stop government from doing ALL that its does.
Limiting government and its duties to those outlined in the Constitution.
The federal government is not supposed to be spending money on schools that is for local governments and is best served this way becasue then schools stay in local control and spending is dictated by the local needs. College wouldn't cost so much if government didn't fund it and more people could go and tax payers would haev more money to send students to college
Cancer research should be funded by the science and pharmicuidical companies who will eventually profit from finding...
Art should be funded by the patrians of art not by the government.
If the federal government only funded infrastructer and defense we would not be where we are now and we would be a far happier nation...
As well if our dollar was backed by something such as gold (currently now on the oil standard) each 1 dollar would have more buying power
not trying to argue economics that is based on legalism principles rather than logical principles confuses me, I see things better as up down right or left. no if and when this happens then this might occure or is possible because we say so.
rose
why not have two currencies, a state one you only use within your state and the federal one that will also be accepted anywhere you go outside your state?
rose
The laws of supply and demand are set so when there is money chacing fewer goods the good cost more at least as much as the market bares, BUT the goods being chased MUST merrit the cost. You do not buy a bike and a car at the same price even if there are limited numbers of both and unlimited funds. Nor do you buy a BMW and a VW Bug at the same price.
When there are unlimited goods and unlimited funds then the markets sitch to pure competion, products becoem better and supplies shift up and down as better products are limited and worse products stockpile thus allowing those who could not buy the "inferior" product before to buy it now.
When though there are more goods than money prices drop to encourage buying until supplies disapate. You see this with the technology industry every day. Once cell phones were extremely rare and very expensive because the technology was new and inaccessable but today you can get a FREE phone with teh purch of a service contract because cell phones are very plentiful they do not have a real value anymore what has value is teh service plan.
Now INFLATION happens when there is enough product and enough money but the money has no real value (fait money). Thus it...
The laws of supply and demand are set so when there is money chacing fewer goods the good cost more at least as much as the market bares, BUT the goods being chased MUST merrit the cost. You do not buy a bike and a car at the same price even if there are limited numbers of both and unlimited funds. Nor do you buy a BMW and a VW Bug at the same price.
When there are unlimited goods and unlimited funds then the markets sitch to pure competion, products becoem better and supplies shift up and down as better products are limited and worse products stockpile thus allowing those who could not buy the "inferior" product before to buy it now.
When though there are more goods than money prices drop to encourage buying until supplies disapate. You see this with the technology industry every day. Once cell phones were extremely rare and very expensive because the technology was new and inaccessable but today you can get a FREE phone with teh purch of a service contract because cell phones are very plentiful they do not have a real value anymore what has value is teh service plan.
Now INFLATION happens when there is enough product and enough money but the money has no real value (fait money). Thus it takes more money to buy the same (not improved) product as before because teh confidence in the money is lacking. If you have ever heard of the weimar republic... well that is a prime example of inflation at its worse. The goverment printed money but ONLY that nation could use that money which made it worthless for trade and forgein negoiations so merchants wouldn't accept it even in the nation itself unless they were give great amounts it litterary took a wheel barrel full to buy bread.
To avoid inflation there must be confidence that the money being tendered is baked by a real assest. In 1936 a dime bought a loaf of bread in teh US, why because that dime had real silver in it and teh value was such you could buy bread. Today a loaf of bread can cost 10 times as much why because the money being tended is not backed by an assest which the nation controls. However if youhappen to find a dime in your hand minted in or before 1936 you can still use it to buy a loaf of bread but first you must sell the dime or rather the siliver in the dime and collect the unbacked money being used as tender today.
http://www.google.com/url?sa=...
rose
The Kaiser paid for WW1 through loans and all that money had to be paid back eventually. In addition the portion of the Treaty of Versailles called the London Ultimatum in 1921 demanded Germany pay reparation funds for the damage and injuries caused during WW1. It was part of the surrender. However the London Ultimatum called for more money than was in the German financial establishment.
Yes that caused a depression. It's speculated by some historians that the hyper inflation was one of the contributing causes allowing Hitler to take over in the first place. That and quite a few other variables.
It's a very interesting topic.
I don't think we should have money at all. Everything should be free and shared equally. No one should have more than anyone else. So you see I am a true Communist even though I am not apposed to Stalinist Socialism if that can't work.
Before you ask. No you will not be obligated to work more than the required 40 hours. Once you get those 40 hours in you are free to do whatever the hell you want during the rest of the week. Working more than 40 hours will not reward you with any special treatment or extra supplies.
Your ideas are flawed. I personnally want to be treated by a doctor who is going to walk in and say well today I have earned my share so even though you have a broken leg I am going home for teh night...
take a few simple products bread, cheese, milk (vodka and tabaco was also handed out) now in the system YOU like and adminer everyone would get the same (and this is how it actually worked in the USSR). Every FAMILY recieved 7 loaves of bread 3lbs of cheese and 10 lt of milk. that should work right? But it didn't and here is why.
1 family had only 2 people so so much bread and milk would go to waste but family 2 had 4 generations all living in one home as a "family" and had 16 people there wasn't enough for everyone. SO what happened... well family 1 would see that family 2 also got taboco yet didn't use it so they would black market trade their bread and their milk for the tabaco and then when family one added a child they would trade another family their governemnt issued items for baby shoes until (and again this is what actually happened) the blackmarket became the STRONGER economy and of course this meant those people who were really good and making trades and finding products began to get rich above everyone else and then they used the wealth to corrupt the system in their favor still ...
take a few simple products bread, cheese, milk (vodka and tabaco was also handed out) now in the system YOU like and adminer everyone would get the same (and this is how it actually worked in the USSR). Every FAMILY recieved 7 loaves of bread 3lbs of cheese and 10 lt of milk. that should work right? But it didn't and here is why.
1 family had only 2 people so so much bread and milk would go to waste but family 2 had 4 generations all living in one home as a "family" and had 16 people there wasn't enough for everyone. SO what happened... well family 1 would see that family 2 also got taboco yet didn't use it so they would black market trade their bread and their milk for the tabaco and then when family one added a child they would trade another family their governemnt issued items for baby shoes until (and again this is what actually happened) the blackmarket became the STRONGER economy and of course this meant those people who were really good and making trades and finding products began to get rich above everyone else and then they used the wealth to corrupt the system in their favor still using the system to hold everyone else down.
As well when the people began to see that some had more (specifically those in "power") they began to have less incentive to work for the little bit they did get, they even bagan to destroy the means of production so that there was less for the rich to buy and the black maret to trade but also less for the government to issue "equally".
Communism will NEVER work in a large scale heck look in an individual home with a few kids and see it doesn't even work there. It can't it is flawed to favor only those in power and in control of teh distrubution and eventually people find ways around the sources of power and distrubution to make up their own working economy.
The USSR didn't fail because of the military might of teh US it failed because of teh economic weakness of its own nation.
A central government doesn't have teh flexibility to continually monitor all the ins and outs of a citizens doings. How could tehy know if a citizen is born or dead fast enough to regulate supplies and then what if what they are suppling can not meet the needs of the individual?
what is teh solution for someone born witha milk or wheat alergy? in the system you describe its death because to give that individual something DIFFERENT goes outside the premise of the system.
You really ned to do some research before you start promoting something you clearly do not understand. You seem to think that "fair" and "equal" mean the same thing but they do not. They do not at all and when you are dealing with people, dealing with INDIVIDUALS, you can not say that what works for you works for me. Because it doesn't. You also can not say that your talents and skills are equal to my talents and skills and thus are worth equal compensation, becasue they are not.
In teh system you think so perfect if you studies ...
A central government doesn't have teh flexibility to continually monitor all the ins and outs of a citizens doings. How could tehy know if a citizen is born or dead fast enough to regulate supplies and then what if what they are suppling can not meet the needs of the individual?
what is teh solution for someone born witha milk or wheat alergy? in the system you describe its death because to give that individual something DIFFERENT goes outside the premise of the system.
You really ned to do some research before you start promoting something you clearly do not understand. You seem to think that "fair" and "equal" mean the same thing but they do not. They do not at all and when you are dealing with people, dealing with INDIVIDUALS, you can not say that what works for you works for me. Because it doesn't. You also can not say that your talents and skills are equal to my talents and skills and thus are worth equal compensation, becasue they are not.
In teh system you think so perfect if you studies hard and got a degree in something relevant like enginering and went to work in a factory building and maintaining the equipment spending hours and hours fine tuning your talent and ability you would still recieve nothing more than the kid who only picks up trash and sweeps teh floor of that factory... and I will call you a lier if you say that would be just fine with you because you know you would expect to recieve MORE than someone who does less
Every Birth Certificate is bonded, hypothecated, monetized and ledgered. Every FRN, or credit therein, is based on Bonds, be they BC's or other varieties. "Governments" cannot just "print" "money". It must be carefully accounted and ledgered.
Money that comes from producing goods and providing services is far better than money that someone prints to pay their bills.
This happened in Europe after WW1, and is happening again in the Euro Zone now, the only difference was the current being over printed wasn't a global reserve currency.
Printing money devalues the currency. Has the same effect as raising prices.
I like your chart showing how much is actually paid by each income group. The one thing it doesn't show is how many get a larger tax return than they paid into the system.
Personally I think we should have a flat tax rate, no loopholes, and no credits.
http://www.nytimes.com/2007/0...
2. That top 1 percent of earners may pay 37 percent of all income taxes, but they earn 24 percent of all national income. Considering that they're not paying a significant amount of medicare or social security taxes, that is NOT an excessive burden on those who can afford to pay more.
Wages are taxed at a far higher rate than investment returns. That's not fair. We're supposed to be encouraging hard work, not taxing it to death.
Your #1 - everyone pays sales tax, SS, Medicare and unemployment -- not everyone pays federal income tax - which you choose to ignore and some how equate with income taxes
Your #2 - Why should anyone pay more in taxes? 2.9 trillion per year - seems to me that is one hell ova pile of money to run the government - maybe we need to make government smaller and spend less - live within our means? Now there is an idea.
I'm not ignoring income taxes, I was pointing out that Fef was ignoring the other major taxes that people pay. They must all be considered when assessing who is shouldering how much burden.
We certainly could spend far less and thus tax less. Problem is, there's no agreement on what should be cut.