Re: Balanced Budget and Depression

[mosler@xxxxxxxx]

Tax payments sent from the
commercial banking system to the Federal
Reserve are a net outflow (reserve drain).
This must be offset by a "reserve add" from the
Fed, from either its own account or from the Treasury's account.


On Thu, 01 Feb 96, "Alan G. Isaac" <AISAAC@xxxxxxxxxxxx> wrote:
>The money supply is a stock. Tax payments are a flow.
>The stock of money need not increase to maintain a flow
>of tax payments.
>--Alan G. Isaac
>
>On Thu, 1 Feb 1996 08:18:37 -0500 <mosler@xxxxxxxx> said:
>>I have contended that it is even simpler.  The fact is, with a fiat
>>currency like the dollar, the driving force is that we all need the
>>government's money to be able to pay Federal taxes.  The only source of
>>dollars to pay taxes is the government.  So a balanced budget is actually
>>the theoretical minimum the government can spend.
>
>
>
Warren B. Mosler
Director of Economic Analysis
III Finance

See "Soft Currency Economics:"

http://inca.gate.net/~mosler/softecon.html