Re: Money, Taxes, and Government Debt

["Harry Veeder" <veed0001@xxxxxxxxxxxxxxxx>]

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>From: "Jack O'Donnell" <jackodonnell@xxxxxxxx>
>To: POST-KEYNESIAN THOUGHT <pkt@xxxxxxxxxxxxxxxx>
>Subject: Re: Money, Taxes, and Government Debt
>Date: Thu, Jun 3, 1999, 8:44 pm
>

>"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.
>

All this depends on the interests of the ruling authority and what it deems
to be an acceptable "tribute" (or means of paying taxes). If the only
tribute acceptable is currency that has been approved or "stamped" by the
ruling authority then it must be "stamped" by the authority before it can be
collected.


Harry Veeder