Re: Money, Taxes, and Government Debt

["Jack O'Donnell" <jackodonnell@xxxxxxxx>]

"William F. Hummel" wrote:

<<SNIP>>

> All of this goes to explain why I do not accept the Mosler/Wray
> thesis that the government must spend before it taxes, from which
> they build a structure based on the (true though academic)
> principle that taxes cannot *finance* government spending.

That's an explanation of the chosen mechanics of money management but it
is not a necessary condition to allow taxation without first spending a
fiat currency. That condition is met by the fact that there has been,
and most likely always will be, a preexisting currency at the founding
of any fiat currency.

The preexisting currency only needs to be occasionally replenished by
government spending of the fiat to provide for tax payments. About the
only circumstance that requires spending before collection is privately
issued credit and startups of local currencies like the "LETS" program
or "Ithaca [sp?] dollars" which are just another form of privately
issued credit.

--
			-- jbod

		Tax Privilege, Not People
___________________________________________________
Come visit and see a new economic perspective --
       http://www.geocities.com/CapitolHill/1067
           Comments/arguments welcome.
..