Some MMT basics 🧵

The Australian Dollar $A is a tax credit.
It is a unit of measure.
You can't run out of metres.
You can't run out of numbers
The government can't run out of dollars...
unless it purposely, politically chooses.

Since the $A is a mere tax credit and a unit of measure, it is neither precious nor permanent.

A dollar is an IOU.
When it is spent into existence a debt is born.
When it is taxed out of existence a debt is washed away.

You do something for me – a debt. This is in effect spending, creating an IOU that I hold, just like a dollar.
I do something for you – a credit. This is in effect taxing, me repaying the IOU that I held back to you.
Thus, a dollar also forms a community credit/debit system.

All money is debt. So, reducing the national debt means reducing the national money supply.

Dollars are not reused A dollar is spent once into existence. It circulates within the economy Is destroyed once it is returned as a tax. More precisely, it drains reserves at the RBA and are destroyed. There is *NO* PRINTING MONEY!!!!

Government spending is simply marking up accounts and taxation is marking them down. Dollars are constantly created and constantly destroyed daily. DAILY!!!! There is no such thing as paying for programs. The government neither has nor doesn't have dollars

Dollars are created every time the government seeks to provision itself and deposits are made into their account for spending... via keystrokes on a keyboard.

Dollars are deleted, destroyed, shredded when received as tax. Get it? So why are we always talking about the government going broke?
It cannot go broke.

Why are we always talking about reducing the deficit or lowering the debt? The National Debt is merely… wait for it... The sum total, to the dollar of every untaxed dollar in existence since the start of the national currency.

To pay off the debt is to DELETE, Destroy EVERY dollar in the economy.

That is to take every dollar out of any rainy-day fund you have whether it is under your mattress, in an envelope or in a bank account. Is that what you really want?

What needs & necessary services are we missing out on because people do not know this?

Taxes are perceived to fund spending as they create ‘spending room’ but they do not fund nor finance. It is not about the dollar but the real resources, land, labour, equipment, services, etc.

A long time ago we knew spending funds taxes, that the national debt is our collective assets and the things we own but these tales got turned on their head.

“If state spending is printing money, then federal taxation is unprinting money"

Thanks
@wbmosler@twitter.com