by Summary:
Uncovering the Truth About Foreign Debt
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Steve Keen considers the following as important:
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Uncovering the Truth About Foreign Debt
Topics:
Steve Keen considers the following as important:
This could be interesting, too:
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| Uncovering the Truth About Foreign Debt |
But this is how public finance works:
1. the state indebts the population by demanding a tax from it
2. the state borrows the money from its own bank, which means, the state practically is the bank and lends the money to the citizens
3. it puts the money on its own bank account
The citizens now do owe the money to the state in its role as a bank.
And the citizens owe to the state to accept the money and sell something for it. Here the role of the state is the creditor.
4. the citizens work for the state directly or indirectly to earn the money.
5. they bring the money to the tax office.
It is the same as with private debt, with the single difference, that the citizens do not decide to go into debt but are indebted.
So public debt just means, that the government takes less money from its citizens than a bank ever would do regarding its debtors.
Public debt is the money, the citizens got from the state and which they owe to the state and the state is just a more generous and patient creditor. This is what he is practically complaining about.
No. How can the population pay taxes until it first has money to pay?
@@simonrobbins815 simple: they work for the state, who pays some of the population for what they do. This is where the money for taxes origin from.
Here a simple example:
Imagine a country, which does not use money at all and with a population of 1000 people, each a farmer living from their farming.
The king wants to build a road. He now tells all of his citizens that each of them owes 1000 coins to him and that he will put those, who don't want to pay the tax, into jail. Now his citizens do need 1000 coins to prevent being put into jail.
Now the king can spend 1000×1000=1 million coins. So he mints a million coins. Then he finds 100 of his citizens who can build the road. He pays each of them 10'000 coins. Those 100 people use the money to pay their tax, which leaves them with 9'000 coins.
Now we have 900 people left with no money and 100 with the 900'000 coins, which the 900 do desperately need. The problem of the 100 is, that they cannot work on their farms since they are occupied with building the road.
So the 900 produce more food and they sell it to the 100. Now everybody has got the 1000 coins to pay the taxes.
At the end of the year, the road is done and all the money has returned to the king.
This is how public spending is financed until today:
1. the government demands taxes
2. the government creates the money by borrowing from its own bank: the central bank
3. the government spends and the population earns the money by working for it
4. the population gives the money to the tax office
5. the government returns the money to the central bank, where it is destroyed.
OK, this is only the simplified version. Much of this is more indirect and taxation is also more complicated. But taxes are paid from the money the government did spend before.
In Michael Hudson's analysis of how civilised social organizations operate there's several examples of how the equivalent of this current military industrial complex dominates human life in tribal heirachical structures of mafia-like exchange of "favours".
The dominant purpose of a religious order was to dress up the perceptions of necessary action defending provisions for health and welfare by demanding that individuals commit to an oath defending their obligations to the common good, "Slave to God" through the offices of the Priest King, so when the office holder was terminated, so were the obligations of the population to pay debts to the system that celebrated a Jubilee and reset the credit exchanges for another round of the seasonal Calendar.
(Stripped of the bs political-cultural opinions, you did what had to be done)
This is what I've understood from hearing Michael and comparing it with what I've read.