Re: Balanced Budget and Depression

["Alan G. Isaac" <AISAAC@xxxxxxxxxxxx>]

If I have understood this claim, it too is incorrect.
Tax payments are not made to the Federal Reserve, they
are made to the Treasury. It is true that the Treasury
can affect reserves by shifting its deposits between
the Fed and commercial banks, but it generally acts to
avoid these impacts. In any case, that's a separate issue,
and my comment stands.

--Alan G. Isaac

On Thu, 1 Feb 1996 10:52:44 -0500 <mosler@xxxxxxxx> said:
>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.